A home is for sale in the Staten Island borough of New York on Aug. 9. The slowdown in the housing market is spreading, with 28 states and the District of Columbia reporting spring sales declines, the National Association of Realtors said Tuesday. Photo by The Associated Press
Nevada is among the states showing the biggest declines in existing home sales, even though new-home sales are up for the first six months of the year, new numbers show.
Nationally, sales were down 7 percent in the April-June quarter this year compared with the same period in 2005, the National Association of Realtors said Tuesday in its latest state-by-state look at housing conditions.
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The survey showed that the biggest declines occurred in states that had been enjoying red-hot sales during the five-year housing boom.
The five biggest declines this spring compared to the April-June period of 2005 were Arizona, down 26.9 percent; Florida, down 26.7 percent; California, down 25.3 percent; Virginia, down 23.9 percent, and Nevada, down 23.5 percent.
In Las Vegas, new home sales are up 8.7 percent to 18,676 through the first six months of the year, while resales dropped 20 percent to 23,305, Home Builders Research reported.
The first half of 2006 has produced some unwanted, but not unexpected, results in the Las Vegas housing market, Home Builders Research President Dennis Smith said.
"We thought there would be a softening of consumer demand due to rising mortgage rates, increased prices and changes in the California economy," he said.
Some of the local housing barometers appear better than others, Smith said, but require careful examination because certain statistics can be misleading.
New home prices have increased, but net sales per subdivision have steadily declined since 2002, he said.
"In our opinion, there is no reason to expect a sudden and dramatic reversal of the current level of demand," Smith said. "Although the longterm health of the Las Vegas housing market looks very good, we believe the next 12 to 18 months could be much of the same."
The report depicted a tale of two housing markets, with former boom areas experiencing declines and other areas of moderate sales gains during the boom years experiencing strong growth.
In all, 20 states had sales gains in the spring, led by Alaska, which enjoyed a 48.6 percent jump in sales; followed by Arkansas, up 17.9 percent; Texas, up 11.3 percent; North Carolina, up 11 percent, and Vermont, up 9.1 percent.
Debi Averett of Phoenix-based Housingdoom.com said it's housing inventory that will define the bursting of the housing bubble. She sees a lot of similarities between Las Vegas and Phoenix, including record inventory.
"Realtors here say sales are strong, which is absolutely true, but Phoenix has doubled its inventory since 2002," she said. "We're above 53,000 here. When the inventory increases along with the prices, the law of supply and demand starts to kick in. The excess inventory starts to exert downward pressure on prices."
Averett cites numbers from Bubbletracking Blogspot that show 23,155 listings in Las Vegas in July, a record number for the area. The previous record was 20,217 in 1995.
That could lead to the dead neighborhoods she calls "Vacantville" in Phoenix.
"They look like ghost towns, brand new developments with nobody in it," Averett said. "The price on a new model has dropped 30 percent since September. They just can't give these things away."
In a separate survey of price changes in 151 metropolitan areas, the Realtors reported that 26 metro areas experienced price declines while 37 areas were still enjoying double-digit price increases.
The biggest price drops by percentage were in Danville, Ill., where home prices fell by 11.2 percent, and the Detroit area, where home prices were down 8 percent.
At the other end of the scale, prices rose the most in Baton Rouge, La., reflecting a 27.3 percent increase, followed by Ocala, Fla., where prices rose by 25.3 percent, and the Virginia Beach, Va., area, where prices were up 23.6 percent compared with the spring of 2005.
Even though there will be some tough times in the new home and resale industry in Las Vegas during the upcoming months, Las Vegas is still in better shape than many towns and cities, Smith of Home Builders Research said.
"Don't forget, just a couple of years ago homeowners saw housing prices increase by at least 30 to 40 percent. That translates to a lot of equity for many," he said.
