Analyst: Home prices slip slightly in ’10

Las Vegas home prices are probably going to finish the year down from 2009, but not by the double-digit percentage declines witnessed in the past few years, housing analyst Larry Murphy said Thursday.

He sees a decrease of 3 percent to 5 percent in median home prices, nowhere near the 20 percent and 30 percent “double dip” some experts had predicted for the year.

“In the first quarter, I would not have disagreed with people who said it would go down another 20 to 30 percent,” Murphy said at his quarterly Crystal Ball housing seminar. “Now it’s the third quarter and I can tell you pretty clearly, I think it’ll be under 5 percent.”

Prices skyrocketed in 2004 with 40 percent appreciation over a six-month period and have fallen by more than 60 percent from their peak in 2006.

The median existing-home price through the first nine months of this year is $120,650, compared with last year’s median of $125,976, the president of Las Vegas-based SalesTraq research firm reported. New-home median prices fell to $204,320 from $212,816 in 2009.

“While it’s still deteriorating, it’s deteriorating slowly. Things are not getting worse at a furious pace. Now they’re getting worse at a slower pace. That’s the best I can say about it,” Murphy said.

The inventory of real estate-owned, or bank-owned, homes on the Multiple Listing Service dipped to about 1,400 in April, but has climbed back to 3,250, according to SalesTraq. Short-sale listings, or those for sale at less than the mortgage balance, went from 4,000 to 7,200 since April.

Short sales were bringing in a higher price per square foot than foreclosures a few months ago, but that doesn’t hold true today, Murphy said.

“All of the prices are being compressed. Everybody’s property value is being impacted by what’s going on in their neighborhoods — short sales and foreclosures. Either way, the bank is going to take a haircut,” the research analyst said.

Murphy counted 3,654 new-home building permits through September, not much in a city with a population of 2 million.

Homebuilders are “proceeding very cautiously and not extending themselves,” he said.

It’s a “horse race” between KB Home and D.R. Horton for the most new-home sales heading into the homestretch, though they may be hearing “footsteps” from Richmond American, which has taken the lead in permit counts, he added.

Sales and marketing consultant Bob Mirman of San Clemente, Calif.-based Eliant said all the forecasting numbers mean nothing when it comes to selling new homes.

Homebuilders have to go beyond satisfaction and beyond promises to “delighting” their buyers, who’ll then bring in business through referrals, he said. Eliant’s homebuilder clients made nearly 22 percent of their sales over the last three years through referrals, he found.

“It’s not just about the home you deliver. It’s about the experience you deliver,” Mirman told the crowd of about 100 real estate professionals at the seminar on Russell Road.

Prospective homebuyers will look at location, floor plan, lot size and value when they go to purchase a home, but they don’t refer business to friends because of those, he said. Referrals come from an incredible experience, proactive communication, building trust and delivering something along the way that surpassed the buyer’s expectations, Mirman said.

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

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