Housing market not showing signs of improving

Home sales and median prices showed no signs of improvement in August, Las Vegas-based Home Builders Research reported Monday.

There were 401 new-home sales during the month, compared with 426 in the same month a year ago. Resale transactions fell to 3,313 from 3,833 a year ago.

For the year, new-home sales have increased 18.6 percent to 3,806 and existing-home sales are up about 1 percent at 28,678, the local research firm reported.

The median price of a new home rose for the third consecutive month to $220,000, an increase of $10,000, or 4.8 percent, from a year ago. The existing-home median price was unchanged from a year ago at $122,000.

The resale price has fluctuated between $122,000 and $128,000 for the past 15 months, a trend that indicates stabilization in prices, Home Builders President Dennis Smith said.

Sales have not declined as much as experts had predicted after the homebuyer tax credit expired and have been a pleasant surprise, he said.

"Given the large amount of statistics reported with the majority of them in the negative area, we're still selling some houses," he said. "It could be worse. It's true the market's bad, but not everybody's dead. Would we like to see better numbers? Absolutely."

Home-building permit activity needs to improve, the research analyst said. He counted 338 new-home permits pulled in August, bringing the year-to-date sum to 3,671, up 45.3 percent from last year.

The second half of the year will most likely produce soft monthly permit counts, Smith said. No more "crutches" are expected from the government to spur production going into the spring, he said.

Despite national reports of economic recovery and the end of the recession, home builders' confidence dropped in August, an index from the National Association of Home Builders and Wells Fargo Bank showed.

"Some people say we shouldn't build any more homes, but there's always some people who prefer new over resale because of the warranty, new neighborhood, the quality of construction," Smith said.

Realtor Lois Greer of Century 21 MoneyWorld said Las Vegas is attracting strong interest from second-home buyers and international buyers. She recently sold a home in North Las Vegas to a Canadian who also owned a home in Florida.

"You'd be surprised how many people are buying from out of the country," Greer said. "Canadians, Chinese, Asians, even Australians. Our world is getting smaller, as you know. People can get here on the drop of a hat."

Baby boomers are looking to buy second homes in Las Vegas at least as nice as the home they own right now, she said.

Greer said she got a call from a man who thought he could buy a $50,000 home in Las Vegas "at the snap of his finger," but found that he was competing against cash buyers and out-of-state investors. He ended up bidding $7,000 over list price to get a house for $138,000, she said.

"People think, 'Oh, it's bad, people aren't buying houses here,' but they are," the Realtor said. "Our market has slowed down, but we're still rising a little bit."

Housing analyst Smith said the fourth quarter is shaping up to be the most difficult period of the housing recession. Average weekly net sales per new-home subdivision in Las Vegas dropped to 0.2 in the most recent week ending Sept. 12, compared with 0.3 to 0.5 in the previous nine weeks and 1.1 at the peak of the tax credit period.

The flat trend in housing prices could be considered a good thing, Smith said.

"Don't be surprised if we see the new-home median price bounce downward a little for the next few months as move-up buyers continue to wait out the storm," he said. "The higher taxes for the wealthy rhetoric echoing from the White House has many potential move-up home buyers playing the waiting game."

Home Builders Research reported 68 high-rise condo closings in August, including 55 at the CityCenter project on the Strip.

TopTenRealEstateDeals.com found that luxury condo prices in Las Vegas are down 70 percent from their peak in 2005-2006, citing prominent properties such as Turnberry Place, where prices have dropped from $550,000 to the mid-$200,000s.

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