Report: Investors buying up Las Vegas foreclosure homes

By Buck Wargo

Wednesday, Dec. 2, 2009 | 10:17 a.m.

Investors made their biggest push yet to buy foreclosure homes in Las Vegas.

San Diego-based MDA DataQuick, a real estate information service, reported investors bought 41.2 percent of Las Vegas area homes in October, the highest amount for any month this decade. Buyers who used cash to purchase their homes accounted for 47.1 percent of sales, said DataQuick spokesman Andrew LePage.

In addition to investors, first-time buyers continue to make up a large segment of the market, LePage said. Government-insured FHA loans, which are popular with those buyers, accounted for 53 percent of all purchases, he said.

DataQuick reported 5,068 sales of single-family homes, condos and new homes in October. That’s a 22 percent increase over October 2008 and the highest October since October 2006 when 5,693 homes were sold.

It marked the 14th consecutive month that sales have risen on a year-over-year basis, LePage said.

What’s unusual is that October sales were up 1 percent from September because traditionally sales fall between those two months, LePage said.

The demand for homes remains strong because of the increased affordability and low mortgage rates, LePage said. In addition, some buyers moved up their purchases to take advantage of the federal tax credit for first-time buyers that was set to expire Nov. 30. It has since been extended and expanded to include more buyers.

The existing home market remained the strongest with 3,612 sales, 24 percent higher than October 2008. Buyers acquired 971 resale condos, a 92 percent increase over October 2008. That’s the highest number of October sales since 2004, LePage said.

The new home market remained weak with 485 sales, down 34 percent from 737 sales in October 2008. That’s a record low for the month since the firm began keeping statistics in 2004, LePage said.

New homes can’t compete with foreclosures on prices, he said. The median price for new homes was $204,910 in October. Resale homes, in contrast, sold for a median price of $135,000 in October, according to DataQuick.

Overall, the price of new homes and existing homes and condos was $130,000 in October, a 34 percent decline from October 2008, the firm reported. That marks the lowest price in the region since it was $129,000 in April 1999, LePage said.

The overall median sales price has fallen on a year-over-year basis for 30 consecutive months, and in October stood at 58.3 percent below the peak of $312,000 in November 2006, the firm reported.

The price per square foot for resale existing-family homes fell to $76 in October, down 27 percent from October 2008 when it was $104. The market peaked at $190 per square foot in June 2006, meaning it has declined 60 percent.

By DataQuick’s count, the number of homes and condos lost to foreclosure in October was 3,491, up 10.4 percent from September and 14 percent from October 2008. The market peaked at 3,718 foreclosures in February.