Housing heads to new lows

The Las Vegas housing market is flying close to the bottom but giving mixed signals as to where the actual ground may be, housing analyst Larry Murphy said Thursday.

Inventory of available homes for sale has declined and existing-home sales climbed above 6,000 for the second quarter, two good signs for finding the bottom, Murphy said at his quarterly Crystal Ball presentation.

However, median prices continue to fall for both new and existing homes and new-home sales have been under 1,000 for three straight months and five of the past six months.

"The bad news is housing prices are down and the double-whammy is oil prices are up," Murphy told about 325 real estate professionals at Texas Station. "The good news is beer is cheaper than gas. So drink, don't drive."

Murphy shows a $215,000 median price for existing homes, the same as it was four years ago -- and falling. If prices had gone up just 5 percent a year over the past five years, Las Vegas would have been on schedule for a median of $217,000 this year.

"The scary thing right now is the foreclosure iceberg," he said.

Preforeclosure filings nationwide already have surpassed a million in the first half of the year, nearly double the number from a year ago, Sacramento, Calif.-based Foreclosures.com reported. Nevada had 20.3 filings per 1,000 households, a 167 perecent increase from a year ago.

"The good news is we're starting to absorb that foreclosure inventory," Murphy said.

About half the homes sold in June were foreclosures, and their median price was $113 a square foot, he said. Lenders are slashing prices on foreclosed homes as the numbers surge.

Bank acquisitions in Las Vegas far outpaced bank dispositions until June, when both numbers started to converge on 2,000, according to SalesTraq.

Realtors have complained about the lengthy process of closing escrow on foreclosures. Murphy said it depends on the bank. Some are quicker than others to dispose of properties.

Murphy reported an 18 percent drop in detached new-home prices from a year ago and 23 percent decline in existing-home prices. Prices are also falling for attached homes.

Single-family detached homes accounted for 68 percent of new-home closings in the first half of the year, followed by high-rises (15 percent), attached condos and townhomes (10 percent) and apartment conversions (5 percent).

Consultant Steve Bottfeld of Marketing Solutions said Las Vegas is going through a rolling "Goldilocks" recovery.

"It's not too hot. It's not too cold. Unfortunately, it's not just right for everybody," he said.

The housing rescue bill passed by the House of Representatives is going to help neighborhoods devastated by foreclosures, such as ZIP code 89031 in North Las Vegas, Bottfeld said. That area leads the valley with 615 foreclosures this year.

Murphy said we'll know the bottom is here when inventory stops increasing, when sales stop increasing and when prices stop falling.

"So have we hit the bottom yet? I would say no. The bottom is still in front of us," Murphy said. "When all three of these conditions are met, we can look each other straight in the eye and say the bottom has been reached."

Contact reporter Hubble Smith at hsmith@ reviewjournal.com or 702-383-0491.