Report: Vegas housing market shows no ‘glimmer of hope’

By Steve Green

Tuesday, Dec. 29, 2009 | 12:34 p.m.

Las Vegas-area home prices continued to fall through October and among big U.S. cities, Las Vegas "remains the one market that has not seen a glimmer of hope so far this year."

That's according to the closely-followed Standard & Poor's/Case-Shiller Home Price Indices, which were issued today and found that nationwide, the annual rate of decline in home prices improved compared to the September report.

But with Las Vegas prices as measured by S&P/Case-Shiller declining for 38 consecutive months, they are down 55.4 percent from their peak in August 2006 and up just 5 percent from January 2000, S&P said.

S&P said prices in Las Vegas fell .1 percent from September to October; an improvement from the .9 percent decline from August to September.

Las Vegas prices in October were down 26.6 percent from October 2008 vs. an average decline of 7.3 percent in the 20 cities in the S&P/Case-Shiller indices.

The S&P numbers compare to statistics issued for November by the Greater Las Vegas Association of Realtors, which reported the median price of a single-family home sold in Southern Nevada was $140,000, up .6 percent from $139,100 in October and down 24.7 percent from $186,000 one year ago.

The statistics all reflect the punishment the recession has inflicted on Las Vegas.

The residential real estate market in Southern Nevada was hit hard first by many subprime mortgages moving into delinquency and then by the national recession that reduced visitation to the city, resulting in sharp declines in employment in the big tourism and construction industries.

With unemployment at 12.3 percent in Nevada in November, casino and tourism employment of 302,500 people was down from 322,900 one year ago; while construction industry employment of 82,500 was down from 109,600, state statistics show.

S&P said that nationwide, its 20-city home price index was unchanged from September.

With just seven of 20 cities in the national index seeing month-to-month home price gains in October, S&P said "the turn-around in home prices seen in the spring and summer has faded."

"All in all, this report should be described as flat," Standard & Poor's Index Committee Chairman David Blitzer said in a statement.

"Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip. Before jumping to conclusions, recognize that the one time that happened at the beginning of the 1980s, Fed (Federal Reserve) policy saw dramatic reversals, which is very different from the stable and consistent Fed policy we have today," Blitzer said in the statement. "Further, sales of existing homes – those included in the S&P/Case-Shiller Home Price Indices – have been very strong in recent months, working off the inventories of houses for sale.

"At the same time, housing starts remain weak, fears that the market will be swamped by a wave of foreclosures are heard and government programs aimed at the housing market will expire in the first half of 2010," the statement said.

October's report found that nationwide, prices in the 20 cities were down an average of 32.6 percent from their peak in the second quarter of 2006.

In October, seven of the cities reported monthly home price gains with gains in Phoenix and San Francisco exceeding 1 percent. San Francisco has reported seven consecutive months of gains, San Diego has reported six and Los Angeles and Phoenix have each reported five.