Vegas area median home price sinks below $250,000

By Buck Wargo (contact)

Friday, Feb. 8, 2008 | 2 a.m.

The median price of homes in the region has dropped below $250,000, a symbolic threshold in the local market that suggests many Nevadans can once again afford to buy — even as others are suffering from declining prices and higher mortgage rates.

The median price for homes in the Las Vegas Valley and outlying areas hasn’t been this low in the four years since the Greater Las Vegas Association of Realtors began tracking sales. The previous low was $252,000 in April 2004, the first month the association began compiling the statistics.

Last month, the median price fell to $249,900, a 3.9 percent drop from December 2007. Since June 2006, the median price of homes sold on the association’s Multiple Listing Service has dropped 21 percent. Prices are down nearly 17 percent since August.

Realtors association President Patty Kelley attributes the latest price drop to a large number of sales of properties taken back by banks after foreclosures. These accounted for nearly 38 percent of the 983 sales of homes listed, Kelley said.

“This is a temporary fluctuation in the market that may continue to keep prices artificially low for the next couple of months,” Kelley said.

The large number of sales was prompted by investment groups giving banks the approval to liquidate their residential real estate portfolios, Kelley said.

In addition, many homeowners have gotten approval from their lenders for short sales, allowing them to sell their home for less than what is owed on the loan, Kelley said.

Foreclosures have contributed to the region’s housing woes, with Nevada holding its No. 1 ranking for 12 consecutive months in 2007. They have shown no signs of slowing.

In 2007, 34,417 homes, or 3.4 percent of the state’s households, entered some stage of foreclosure. That is three times the national average, according to California-based RealtyTrac, a company that monitors foreclosures.

Most of Las Vegas’ foreclosure problems are attributed to subprime loans to those with less than stellar credit histories and adjustable-rate mortgages that have reset with higher payments than owners, including many investors, could afford. Many were counting on prices to continue rising so they could refinance out of an adjustable-rate mortgage.

RealtyTrac and CNNMoney.com reported this week that seven of the 100 worst-hit ZIP codes in December were in the Las Vegas Valley. No. 1 on the list was 89031 in North Las Vegas, followed by nearby 89131.

SalesTraq, a Las Vegas housing tracking company, reported 8,858 homes were repossessed in 2007, including more than 2,300 in November and December.

Home prices have been falling rapidly since September, in part because of a large number of homes on the market that has intensified competition for fewer buyers amid a credit crunch. After dropping in late 2007, the inventory increased 0.5 percent in January to 22,117. There were 5,023 new listings, up 48 percent from December.

Most of the properties sold on the Multiple Listing Service are existing homes in the Las Vegas Valley. Some are new homes.

In the condo and town home market, the median price of units sold fell to $162,000 in January, a drop of 12.4 percent from December. Prices are down 21 percent from January 2007.

A resource center for those facing foreclosure will be open from 10 a.m. until 4 p.m. Feb. 18 at Cashman Center. For more information, call (702) 388-5020.