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Home-price decline’s halt may be final, or just pause

But expert says fall of median from current $125,000 all the way to $100,000 is unlikely

Monday, Aug. 3, 2009 | 2 a.m.

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The chances are growing less likely that Las Vegas median home prices will fall to $100,000, according to a Las Vegas housing analyst.

But no one should expect prices to shoot up anytime soon despite a lack of inventory, said Larry Murphy, president of SalesTraq, a housing research firm.

“It appears prices have stopped falling,” Murphy said. “It’s possible that prices could fall further and hit $100,000 by the end of the year, but I don’t think that will happen.”

The median price of existing homes sold in Las Vegas in the first quarter fell 16 percent, but by the end of June that 16 percent decline remained unchanged. The median price was $148,000 in January but was $125,000 at the end of June.

But Murphy warned of a false bottom and said that even though prices won’t fall to $100,000, they still have room to drop.

The price may settle depending on what happens with foreclosures the rest of the year. Murphy said he expects another wave because of the high jobless rate and people walking away from their homes. A lender moratorium on foreclosures ended in March, which should also add to the supply.

Murphy said the anecdotal evidence from Realtors is that they are getting more assignments from lenders to put foreclosed homes on the market. That comes at a time when multiple offers for homes have started to disappear because of the limited supply of attractive foreclosure homes.

Back in December 2007, no one could have predicted that home prices would have fallen 34 percent in 2008, Murphy said. Even the luxury market hasn’t been immune from the housing slowdown, as some had once suspected.

“Not one corner of this market has hidden from the economy, including the luxury market,” Murphy said. “The luxury market is hurting right now.”

•••

Investors looking to identify which real estate purchases are the best performers — in this market, that means they are depreciating the least — might consider the findings of housing experts in the Las Vegas Valley.

Single-family homes fared the best among properties when comparing the first half of 2008 to the first half of this year, said Larry Murphy, president of SalesTraq, a Las Vegas housing research firm. Their median price fell 34 percent in that period.

Homes performed better than an acre of undeveloped land, whose median price fell 42 percent over that time frame, he said.

Third on the list were mid-rise condominiums, which fell 49 percent. They were barely ahead of high-rise condos, whose values fell 50 percent, and other condos and town homes, which fell 51 percent, Murphy said.

The worst investment was apartment conversions, with values falling by 56 percent, Murphy said.

•••

Although new-home sales remain weak in Las Vegas, DR Horton has eclipsed the traditional front-runners in the market when it comes to sales through the first six months of 2009.

DR Horton recorded 425 sales, easily surpassing the 282 of Pulte-Del Webb and the 249 of KB Home, according to SalesTraq.

Housing analyst Dennis Smith, president of Home Builders Research, credits the builder for not being afraid to compete with foreclosures and for its terrific marketing.

In its recent “Repo Myth Sale,” the Texas-based builder tried to show how foreclosed homes cost more than they appear because if they are in poor condition, they require refurbishing that makes them more expensive than new homes. New homes also come with a warranty and improvements that make them worthwhile, the builder said.

In a market where many first-time buyers have been frustrated by losing to investors who are plunking down cash and outbidding them for foreclosed homes, appealing to those buyers is important.

“It is a great marketing move to bring this issue to consumers’ attention,” says Smith, who adds that other builders have tried similar strategies.

Longer version of these stories appeared in this week’s In Business Las Vegas, a sister publication of the Sun.

Discussion: 9 comments so far…

Comments are moderated by Las Vegas Sun editors. Our goal is not to limit the discussion, but rather to elevate it. Comments should be relevant and contain no abusive language. Comments that are off-topic, vulgar, profane or include personal attacks will be removed. Full comments policy.

By judgesmales

Aug. 3, 2009

6:11 a.m.

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Warning: Trust local housing analysts, researchers and "gurus" such as Larry Murphy at your own risk. Same with the others local housing pumpers who have been wrong since the start of the crash -- such as Steve Bottfeld and Dennis Smith.

They all have a vested interest in calling a "bottom" -- their favorite word -- and getting you to run out and catch a falling knife. With all of the housing inventory Las Vegas has right now, there is no reason for bidding wars on any property.

Also, the banks can't sit on all of their foreclosures forever. Once they're required to start moving that stuff off their books faster, you WILL see $100,000 prices in Las Vegas. And all of the knife-catchers who have bought this year (or plan to buy) will be underwater on their loans, even after the $8,000 tax credit/bribe, paid for with our federal taxes.
By Birdiedreamin

Aug. 3, 2009

6:19 a.m.

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"Back in December 2007, no one could have predicted that home prices would have fallen 34 percent in 2008, Murphy said."...

hey larry...
isn't that your job???
if it is not your job...
why do you make predictions???
By Birdiedreamin

Aug. 3, 2009

6:27 a.m.

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who is worse...
the clowns who use the sun to pump their book of business???
or...
the sun for continuously going back to the same old cast of clowns over and over even after it is painfully obvious that they are being used by said clowns???
By lvdeaner

Aug. 3, 2009

8:13 a.m.

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No one has a crystal ball. If one was able to predict, with absolute accuracy, such things as the rise of a particular stock, the fall of a housing market or the price of oil next year, that person could be one of the wealthist people on the planet!

At best, predictions are a more educated and informed opinion based on facts at hand. And as facts at hand change by the minute, the prediction has a very short shelf life and are just a snapshot of the moment. Predictions are trends and not meant as an absolute authority but as a more qualified opinion than the guy off the street's uninformed opinion with his lack of direct knowledge and expertise.

The original comments here are like most of the comments made to this paper... Negative CRAP by uninformed and mostly uneducated people who are unhappy with their lives and therefore derive some sort of pleasure bashing every person and every article published.

Murphy and Smith and others who comment are just trying to give those of us who might want to know, an educated opinion of where we are and where we might be going based on their understanding of the evidence today.

If the bashers that comment on this website on all of the different articles are so smart and know more than the opinions expressed in the SUN, then instead of just telling everyone that they SUCK, why don't you show how enlightened you are by offering a informed rebuttal or to an article by presenting an educated and researched counter point of view that someone reading might really consider as a good opposing view argument and be able to use to make up their own mind about the information presented at hand.

If your counter opinions were presented in an informed, educated way and people reading the SUN responded by wanting to know more of what your predictions were, perhaps you would get a column or an interview like Larry, Dennis and others you choose to verbally trash.
By Birdiedreamin

Aug. 3, 2009

8:50 a.m.

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hey lvdeaner...
go back thru the archives and read the real estate articles over the past couple years...
it will make you laugh out loud!!!
By Katie

Aug. 3, 2009

8:59 a.m.

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I know two realtors who have both been in the business for over 25 years, the majority of years here in Vegas, and both have said they have sold $250,000-275,000 homes for $100,000-$110,000 in the last couple of months. The properties were in good condition with just minor repairs and changes needed. Maybe their sales didn't get included on the statistics that Mr. Murphy always seems to be quoting.

And - the word "investors" should bring cause for concern...again.
By Katie

Aug. 3, 2009

9 a.m.

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Note to lvdeaner:

Please don't insult those who comment here. Your arrogance is worse than uninformed comments. I believe most people here ARE educated and informed and perhaps know first hand why the comments of Mr. Murphy and all the other "experts" are baseless and "spur of the moment" and hold no credibility 98% of the time.
By lvdeaner

Aug. 3, 2009

11:43 a.m.

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Well the two responses to my comments above are case in point...

Birdiedramin... made a rebuttal and a well taken point by reference and by point... Exactly right on and I agree... Kudos to an intelligent response!

Katie on the other hand takes umbridge with my comments and opinion with a personal attack such as "arrogance is worse... and states the reason is " I believe most people..." This is a not a fact. At best this is an opinion.

Katie also states " know first hand that 98% of the time "ALL experts, including Mr. Murphy are baseless and spur of the moment, - then give specifics to back up your claim.

The view you present is "Please don't insult those who comment here." I am not insulting anyone, especially the people who comment here as I am one of those people too.

I did state my belief that many, (not all) of the people who spout Negative CRAP are ill informed or uneducated about the subject they are commenting on (like Katie who may or may not be informed).

There is never a alternative view or solution offered when a person is mounting a personal attack on an individual who is expressing his opinion. Opinions are like A**H****, everyone has one. Offer your alternative view with some ideas of why you feel that way with out attacking the person personally.

Everyone should be able to express their opinion whithout personal attacks. I am as interested in your opinion about this subject as I am in Birdiedreamin further explaining his/her opinion. (Which was done nicely) If you have a viewpoint or opinion and disagree with someone, feel free to express your disagreement and give a reason you believe the way you do - so that other people can read and make up their own mind. You may have a valid point that I had not considered before and by presenting it, I change my opinion. But just a "You Suck" attitude is a waste of everyones time as a comment. I personally know the two gentlemen discussed in this comment forum. Regardless of their position, they are both great guys who do not deserve personal attacks from you unless you know something personal about these guys that is bad and you want to share your personal experience. Katie, do you know these men personally? I doubt it. I don't know you personally either so it would be wrong for me to mount a personal campaign against you because you may be right about what you say and you might be a great person too. It is just that your limited negative response and unsubstanciated assertions don't give me anything that changes my mind or opinion about what I said.

It is my OPINION that open dialog, discussions and yes, even disagreements between people is healthy. What is not healty is personal attacks because someone does not share your view followed by NOTHING! This is what I call negative CRAP.