As the economy starts to improve, the housing market of Las Vegas has not been up to par. The prices of the median home declined in May and the historically depressed level of new-home sales remained constant according to a local housing analyst.
The Home Builders Research agency has reports of 291 new-home being sold in May, which increased from 258 in April, but is down from 506 in the same month in 2010 when there was a home-buyer tax credit government sponsored, at the federal level, was in effect. The median price of a home dropped from a year ago to a value of over $192,000.
The number of new-home sales has stayed low throughout the whole year, with an average of just 262 houses sold per month, and the total of 2011 is down 36 percent at 1,311.
The Home Builders Research president, Dennis Smith, said that the tally of new-homes sales should rise over the summer. They could reach up to 300 to 400 a month.
Smith’s regular traffic reports show the net sales per subdivision are now up to about one house every fortnight, up from about one per three weeks or month.
Also, home builders pulled over 430 new permits in May, up over a hundred from around 320 last month. The monthly permit counts are an indicator of the absorption of future new-homes.
“I’m not saying the recession is over,” Smith said. Smith also said to see the numbers go up over the next one to two months.
Activity of resales is running ahead of last year with nearly 4,000 existing home sales in May, a 9 percentage point gain from May of the previous year, according to Home Builders Research. For 2011, houses that are being resold are up 4.8 percentage points to over 18,000.
Dennis Smith said that he is prepared to increase this year’s sales projections up to 44,000, which does not include deeds from trustees.
“Yes, prices are down,” Smith said. He continued by saying that the Smith also said that it is a good opportunity to buy property in Las Vegas for individuals and investors, both large and small.
SalesTraq, based in Las Vegas, reported almost 300 new-home closings in May, a staggering decrease of over forty percent from last year, showing more progress. The median price actually rose 0.3 percentage points, to the current level of just under $194,000.
Of the existing-home sales, which also includes sales from trustees, jumped over a surprising 17.0 percent to just fewer than 5,000 during the month. However, the middle prices for existing home price fell by about 14 percentage points, to over $100,000.
SalesTraq counted over 800 sales, short sales, which is when the homes were bought for less than the usual mortgage balance, at the medium price of around $120,000. There were almost 750 real estate auction sales with a resulting median of $90,100. Of the approximate 2,000 bank-owned, or real estate-owned, sales were at a median of $102,000. There were over 1,300 nondistressed sales with a median sale price of $120,000.
A key to Las Vegas housing is, in fact, the real estate-owned element, said the president of Marketing Solutions, Steve Bottfeld.
Bottfeld said there are practically no signs of improvement and to watch for the number of potential foreclosures in the future.
According to SalesTraq, there were over 2,200 bank repossessions in May, a large 31 percent jump from last May and the most repossessed houses in a single month since October 2009. Smith said there were over 50,000 foreclosures in what is known as “silent inventory” which could make it on the market if lender policies don’t change.
Smith said that this would not lead to a longer recession but it would take several years to see any noticeable appreciation which would still be very small at 2 or 3 percent.
The housing boom went bust five years ago and since then, sales have fallen almost every year for the U.S. Analysts are expecting sales to eventually level off at around 5 million a year. Last year was the worst showing in over a decade as only about 4.9 million homes sold.