New-home sales drop in January

Sales of new homes hit a 15-year low in January with 881 closings, a 56 percent decline from the same month a year ago, as the Las Vegas housing market continues to work its way to the bottom.

The last time monthly new-home sales fell below 1,000 was May 1993, when there were 990 sales, housing analyst Dennis Smith of Home Builders Research said.

"It’ll pick up," he said. "Want to bet? The numbers are bad. You can’t hide the numbers. But the good thing is the cycle is moving. We’re not dead in the water."

The median price of a new home in January was $274,000, down nearly $61,000, or 18.2 percent, from a year ago, Home Builders Research reported.

For the first time in years, single-family detached new homes are selling for less than $200,000, Smith said. Centex has been selling nine homes a month in the Mesa Verde community of North Las Vegas for $97 to $113 a square foot, a price that hasn’t existed for eight years, he said.

Smith counted 1,488 resales in January, down 38.6 percent from a year ago. The median price of an existing home dropped 14.4 percent to $239,900.

Larry Murphy of Las Vegas-based SalesTraq said it’s the first time he’s counted more foreclosures than resales. He showed 2,177 repossessed homes in January, compared with 1,061 existing home closings. The median price fell 11.8 percent to $247,000.

Murphy said he’s been talking to Realtors who now specialize in real estate-owned properties, or repossessions by the bank.

"That’s their niche," Murphy said. "These people have set up with a staff to handle bank repos. That’s all they do."

There are 34,026 homes in foreclosure in Las Vegas, the latest statistics from California-based RealtyTrac show.

"I said we were near the bottom, but I have an empty feeling about that," Murphy said. "I’m giving up. I’m just going to report the numbers. I’m not going to make any more predictions."

SalesTraq reported 901 new-home closings in January at a median price of $275,000, down 18.8 percent from a year ago.

Available resale listings stabilized at 23,803, receding from a peak of 27,417 in September.

Alex Edelstein, developer of Manhattan and ManhattanWest midrise luxury condos in Las Vegas, said the decline in resale inventory since September is a new phenomenon. Normally, inventory pops back from holiday lows, but inventory has "plunged" in the last six weeks, he said.

He estimated 50 homes are being rented out or taken off the market every day.

"There has been a tendency to focus on foreclosures and distressed sellers, but most sellers are smart enough to know that if they hold on, they’re going to get a much better price in a year or two," Edelstein said. "That causes them to pull their homes off the market, which lowers inventory and creates a better supply-demand balance. And that’s where things stabilize and start turning around. The fact that there are now 5,000 fewer homes available for sale than just five months ago is impressive."

Smith said the market had to get to this low point in sales sometime and he thinks it’s there. Sales aren’t going to drop much lower and the government’s economic stimulus package should help sell homes, he said.

The new limit for Fannie Mae, Freddie Mac and Federal Housing Administration loans is 125 percent to 175 percent of an area’s median home price, which would give Las Vegas a new FHA ceiling of $400,000 and new Fannie Mae and Freddie Mac ceilings of $417,000, the Southern Nevada Home Builders Association reported.

SalesTraq showed 358 new home permits in January and Home Builders Research had 347, down from more than 1,000 in the same month a year ago. That follows December in which just 215 permits were issued.

Smith said we’re still seeing the "stockpiling effect" from October, when builders pulled 1,840 permits before the building codes changed. That’s going to keep monthly permit counts under 500 for the next few months, he said.

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

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