Editorial: Home buyers find relief

Tuesday, May 23, 2006 | 7:32 a.m.

There is some good news for Las Vegans who are seeking to buy either a new home or one that a family has placed on the market. The power to negotiate is back.

Two years ago, at the height of the Las Vegas housing frenzy, fewer than 3,000 homes were for sale. Competing against thousands of others, buyers in many cases were actually bidding to pay more than a home's listed price. Sellers were under no pressure to upgrade their homes as buyers were snatching them up within two or three weeks of listing. Stories abounded of middle-class sellers, who had purchased their homes in the mid-1990s or earlier, profiting by $250,000 or more.

Home values were increasing so rapidly - as high as 30 to 40 percent in some cases - that the 2005 Legislature, fearing a tax revolt, placed a 3 percent cap on how high residential property taxes could rise per year.

Today the market has cooled considerably, as reported Sunday by Jennifer Shubinski of the Las Vegas Sun. Although the median listed price of both new and resale homes has increased somewhat from two years ago, the number of homes for sale has increased dramatically. As of last month, there were nearly 18,500 homes listed for resale. And there were 4,000 new homes available for purchase.

With supply now ample, sellers are finding their homes remain on the market for months, meaning they are willing to make deals if they sense a potential sale. Buyers have confidence now in making offers that are considerably below listed prices. Builders of new homes and owners of existing homes are accepting lower offers and even throwing in extras to ensure sales.

Helping to add to the supply is the sale of homes purchased in 2003 and 2004 by investors, who were looking for fast returns rather than a place to live. With the market heading downward, the investors are selling, fearing substantial losses if they wait much longer.

Home prices are still too high - median prices are about $286,000 and $343,000 for resale and new homes, respectively - but at least now buyers have a chance of negotiating a deal within their ability to pay.

This bodes well for the Las Vegas area's ability to attract schoolteachers, police officers, hotel workers and other people whose skills are essential. While it may not be best for individual sellers, a healthy supply of available homes is good for the entire community.