Home sales are making a comeback in Las Vegas and inventory has been reduced to about an eight-month supply, but prices continue their free fall from a year ago, a strong signal that the housing market has yet to enter recovery.
Las Vegas-based SalesTraq reported 3,173 existing home closings in July, a 56.5 percent increase from the same month a year ago and the highest monthly total since September 2006.
However, 61 percent of those sales were bank-owned homes with a median price of $193,000, dragging the overall median existing home price down 23.9 percent from a year ago to $210,000.
New home sales slumped to just 731 in July, down 57.5 percent from July 2007. For the year, new home sales have fallen 47.9 percent to 6,248 units. Median prices fell 20.4 percent to $262,185.
“It’s getting depressing out there,” SalesTraq President Larry Murphy said. “I’ve got people coming to me for a job, or asking if I know of any jobs. I’ve got people sending me résumés every week.”
The number of foreclosures edged up to 2,281 in July, up 8.4 percent from June, according to SalesTraq.
California-based Foreclosures.com reported that preforeclosure filings hit a record in July both nationally and in 14 states. Nevada leads the nation with 59.1 filings per 1,000 households in July, a 126 percent increase from a year ago. Arizona was next with 54.9 filings per 1,000 households, followed by Florida (48.3) and California (25.2).
Perhaps overlooked in all of the reports is that foreclosure sales in Las Vegas were about 85 percent of the number of new foreclosures, indicating that the market is nearing equilibrium between foreclosure absorption and foreclosure creation.
That’s one benchmark for recovery, Murphy said.
“When we get to the point where the banks are selling more than they acquire, then and only then will we be in a recovery mode,” he said.
Bob Wells, chief financial and operating officer of Las Vegas-based Phillips Homes, said the good news for home builders is that the trends show sales flattening out after a long decline and fewer new home building permits.
SalesTraq counted 668 new home permits in July, bringing the year year-to-date total to 3,731, a 55.2 percent decrease from last year.
Before long, demand will shift back to new homes, Wells said. He expects weakness for the rest of the year with a pickup starting again in February.
“If someone had told me at Christmastime that the resale market would come roaring back, I wouldn’t have believed them,” he said.
“The facts are there, but I don’t see people talking about them yet,” he added. “Admittedly, prices have languished and it has made it possible for renters to buy.”
Wells said he knows of several renters who bought bank repossessions or starter homes in recent months because they felt rents will go up and they can lock in a 30-year house payment that’s not much more than their rent payments.
SalesTraq’s Murphy said he would be surprised to see the “blended” price of foreclosures and regular sales dip below $200,000 by the end of the year before it starts back up. He won’t declare the market in recovery until prices stop declining.
Contact reporter Hubble Smith at firstname.lastname@example.org or 702-383-0491.