Housing numbers continue free fall

Sales of both new and existing homes dropped drastically in October and median prices continue to slide from last year's peak, a local housing analyst reported Wednesday.

Larry Murphy, president of Las Vegas-based SalesTraq, said he talked to a mortgage lender who's processing six or seven loans in one subdivision of the Anthem community in which new home prices were slashed $250,000, or about 30 percent.

"I don't know if it's true or if it's just a rumor, but he said half of them are Realtors and they plan on walking away from their current home, the same home they bought from the same builder last year," Murphy said.

Median new home prices fell 9.2 percent in October to $299,575 while sales plummeted 49 percent to 1,302, compared with the same month a year ago, according to SalesTraq. Nearly all home builders in Las Vegas have reduced prices in new subdivisions around the valley, Murphy noted.

Last weekend, Kimball Hill Homes marked down prices by $50,000 to $120,000 on select homes in its Mountain's Edge, Providence, Taormina and Avellino communities.

Existing home prices dropped 11.4 percent in October to $257,000 and sales were down 44.3 percent to 1,549.

The number that looks suspicious in SalesTraq's monthly report is the 2,046 permits issued in October, up 142 percent from a year ago. The reason for the jump has to do with building code changes that became effective Oct. 31, Murphy said.

Pinnacle Homes founder Frank Wyatt said he was surprised the permit surge wasn't bigger.

"We, like many builders, pulled a number of permits on our old plans that we have no intention of acting on immediately," he said. "It allows us to close out projects or have permits in hand in case our plan update process was still not completed."

One bright spot in the bleak October picture was resale inventory. For the first time since June 2006, available listings declined, by about 350 homes to 27,049. Most experts agree that an inventory reduction combined with price stability marks the bottom of a negative cycle.

"Inventory is telling us we may be on the bottom, but it will be two or three months before sales and pricing reveal the whole story," Steve Bottfeld of Marketing Solutions said.

North Las Vegas homeowner Steve Rohl sold his home at auction in October after watching it linger on the market as home prices dropped.

"Putting your home on the MLS and expecting a sale is like watching dinosaurs dodge asteroids," Rohl said. "It's an exercise in futility. Have you tried to do an open house lately? There are six open houses within a block of me. You're lucky to get one person."

Aaron Auxier of Luxury Realty Group said Las Vegas has two separate markets -- the single-family home market driven by California buyers and the Strip condo market driven by international wealth.

While the single-family home market is loaded with inventory, the luxury condo market in the core Strip area is extremely limited due to land constraints and high construction costs, he said.

"The one huge fact that's not showing up in sales is new luxury condo sales," Auxier said. "These numbers do not get reported and that is a problem."

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