Resale housing prices up more than 30 percent

Jennifer Shubinski

Tuesday, May 18, 2004 | 11:03 a.m.

Las Vegas-area housing prices continued to soar in April, but local analysts expect prices to level off by the end of the year while others said it is already starting to happen.

The median price of a resale home in the Las Vegas Valley increased more than 30 percent over the same time last year. The median price of a new home also continued to increase, but not in the great leaps as seen in past months, local research firms reported today.

April's median price for a new home in the Las Vegas area was $239,525, an 18 percent increase over the same time last year, and a $7,255 increase over March, SalesTraq reported. Research firm Home Builders Research Inc. reported that April's median new home price was $233,360 in April, a 12 percent increase over the same time last year and a $2,453 increase over March. Statistics differ between firms because of research methods used.

While those price increases are still impressive to many, the new home price increases are less than in March, when new home prices increased between 20 percent and 23 percent over the previous year, according to Home Builders Research and SalesTraq, respectively.

"I'm starting to see the median new home price to continue to go up, but in another two to three months, then you'll start to see (prices) slow," said Dennis Smith, president of Home Builders Research. "Why? Because I see the (builder's) price lists. Prices are still increasing, but increasing at a lower rate."

Where home builders might have increased home prices $5,000 to $10,000 per phase, some builders are making smaller increases, from $2,500 to $5,000, he said. One builder, whom Smith declined to name, even decreased prices on some of its new homes.

"They weren't getting the initial demand for the (home) lottery that they were getting a month ago, which just means the prices were way too high to start with," he said.

Traffic -- people looking to buy a home -- through new home subdivisions also has slowed in the past three weeks when compared with a couple months ago, Smith said.

"I think it's because of the prices -- prices and interest rates. It's a typical combination," he said.

Larry Murphy, president of SalesTraq, said the new home entry-level buyer is finding it harder to find an entry-level product.

The least expensive new home in the Las Vegas Valley is a 555-square-foot single family home being built by Richmond American Homes, ranging in price from $109,990 to $116,990, Murphy said.

Murphy said he has tracked 3,424 new home permits issued in April, a 58 percent increase in new home permits over last year.

"We're seeing builders gearing up to meet demand, they're building houses as fast as they can," he said.

There were 2,306 recorded new home sales in April, a 30 percent increase from the same time last year and a decline of 514 recorded new homes sold compared to March, SalesTraq reported.

Home Builders Research reported 2,016 recorded new home sales in April, a 13 percent increase over the previous year and a decline of 753 recorded new home sales compared with March.

The current median asking price for a new home is $284,990, he said. That number is so much larger than April's recorded median new home price because of the lag in time. He said the recorded numbers lag at least 90 days in resale home recordings and at least six months for new home recordings because of the time it takes to close escrow on a home.

"These are lagging indicators, not predicting indicators," Murphy said.

Murphy also believes that the market will cool off by the end of this year, and like some, he doesn't expect prices to fall.

"The market is still accelerating in price and in volume," he said. "It's got to plateau. It can't sustain these price increases indefinitely. People's income is not going up that much, and we are not that big of a bargain when compared to California."

The median price of a resale home in April continued to show impressive gains over the same time last year, the two research firms reported today.

The median price of a resale home in April reached $215,000, a 33 percent increase over the same time last year and a $15,000 increase over March, SalesTraq reported. Home Builders Research reported similar price increases, with the median price of a resale home in April reaching $220,000, a 35 percent increase over the same time last year and an $11,500 increase over March.

The number of existing homes sold in the Las Vegas Valley increased by 60 percent over last year to 5,536 resale homes sold, but fell by 140 existing homes over March, SalesTraq reported.

Home Builders Research reported 6,292 resale homes sold in April, a 55 percent increase over the same time last year and an increase of 41 resale homes sold over March.