Las Vegas home sales up, prices continue to decline
The number of Las Vegas home sales rose in March, but prices continued to decline, Home Builders Research reported Wednesday.
The Las Vegas-based housing research firm counted 293 new-home sales during the month and 4,187 resales, not including 1,951 trustee deeds that were recorded by banks and lenders.
It’s the third consecutive monthly increase for resales.
The resale segment is the key to housing recovery in Las Vegas, Home Builders Research President Dennis Smith said. It’s imperative that resale closings stay strong to eat through the existing-home inventory, he said.
“We’re moving inventory,” the housing analyst said. “I know it’s month by month. We’ve got a ways to go, but it’s moving. If houses weren’t selling, then there would be a lot of concern. We’d be getting out the bulldozers.”
The median price of a new home declined 5.2 percent from a year ago to an even $200,000 in March, while the existing-home median price fell 6.2 percent to $113,000, the lowest since 1995, according to Home Builders Research.
Smith said the $87,000 gap between new- and existing-home prices is too large of a disparity to expect near-term pricing recovery, which he defined as four to six months of upward price movement.
The new-home market continues to struggle and probably won’t match last year’s total sales of 4,753, he said. Those numbers were boosted by the government’s homebuyer tax credit, which drove sales of new homes above 900 in June. They’ve been running under 300 for the first three months.
“This is probably the level we have to be at to recover,” Smith said. “This is our true market level of demand that we have to become accustomed to.”
Homebuilders pulled 339 permits in March, bringing the first-quarter total to 807, a 49 percent decrease from the year-ago period. Again, it’s not an apples-to-apples comparison because of the expected increase in sales from the tax credit, Smith said.
It would be wonderful to see both sales and prices moving upward, but that will take time, the analyst said. It’s a fair assessment that the housing market is in the third year of a five-year down cycle, Smith said.
Prices will improve when the upper half of the market improves, generally anything over $300,000, he said. That won’t happen until the economy and employment improves.
There’s pent-up demand for home sales and the market is improving in some areas of the Las Vegas Valley, only to be quashed by low appraisals, Smith said. He’s heard cases of buyers willing to pay a certain price for a new or existing home, but low appraisals killed the deal.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
