Report: Median home sale price drops another $10,000

Thursday, Feb. 19, 2009 | 2 a.m.

Real Estate in Crisis

After a rotten 2008, this year got off to a really bad start — so bad that even the most optimistic housing analyst in Las Vegas is concerned.

Sales of new and existing homes tumbled in January and foreclosures rose from December, according to statistics released by SalesTraq. The median price of existing homes sold in January tumbled another $10,000, dropping the price to $150,000. That’s a 48 percent drop from the highest price for existing homes at $288,000 in February 2007.

Analyst Steve Bottfeld said the dismal month makes it more difficult to predict where the market is heading, calling last month’s numbers the worst January for real estate in the city’s history.

“While I suspect we are near the bottom of the market, the data suggest that it could sink further,” said Bottfeld, executive vice president of Marketing Solutions, who works in conjunction with SalesTraq. “Given the recent withdrawals of significant convention business, the job picture is now cloudy. It will be spring before we have any comfortable idea of where the market is truly headed.”

Notwithstanding the difficulty in forecasting the market, Bottfeld and SalesTraq’s Larry Murphy predict that by the end of the year the median price for existing homes will be no lower than $150,000.

The two predict sales of existing homes will essentially match the 31,617 in 2008. There were 2,737 sales in January, a 72 percent increase over January 2008, but that’s the fewest number of sales since June’s 2,785.

Foreclosures continue to drive down prices of existing homes. Sixty-four percent of the home closings in January were bank-owned properties with a median price of $139,000. The other 36 percent had a median price of $170,000, Murphy said.

Discussion: 11 comments so far…

By judgesmales

2/19/09 at 2:25 a.m.

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Boy, it never fails. Even when Steve Bottom-feld offers a quote that makes it clear he has no clue where the market has been or where it's headed, he still has to exercise his bottom-calling obsession by starting out, "While I suspect we are near the bottom of the market..."

Give us a break. Bottom-feld has been calling a bottom in housing every other month since 2006 and he hasn't been right yet. Some analyst, huh?

And here's something else to remember if you're thinking of rushing out to catch this latest "bottom" and buy a house (not a "home"): the so-called bottom doesn't last for just five minutes, and then prices start going back up immediately. Maybe it works that way with stocks, but not housing.

Bottom-feld won't tell you this, but I will: We won't know the "bottom" until about two years in retrospect, and it could last for YEARS. So keep your powder dry and don't rush into buying a house. The easy credit of the boom is NEVER coming back, so you won't have idiots bidding up the property you're interested in, because they won't be able to get approved, especially if they were foreclosed on during the current collapse.

We could be headed back to 1996 prices, because just as we over-shot to the upside during the boom, we'll over-shoot to the downside during this depression. And, yes, it is a depression.
By johnevegas

2/19/09 at 3:39 a.m.

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"The easy credit of the boom is NEVER coming back..."

Bad advice, IMHO. You left out the present convergence of cheap credit for those who qualify and ultra-low real estate prices. That makes this the best time to buy in decades!

"Maybe it works that way with stocks, but not housing."

Too bad you can't rent shares and create revenue from them, at least that way your analogy would make sense.
By leftiebob

2/19/09 at 4:06 a.m.

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I bought a two bedroom/two bath condo for $30,000 at auction 11/22/08. I suspect the "bottom" is a long way off. There is a new paradigm based on a forced frugality brought on by the collapse of the stock market and the plunge in real estate value that has left boomers scrambling to save every dime for their fast approaching retirements.
By judgesmales

2/19/09 at 5:35 a.m.

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johne, by "easy credit" I meant 80/20 mortgages, Alt-As, liar loans, etc. Those are not coming back, which cuts off a huge percentage of the so-called "pent-up demand" buyers.

If this is the best time in decades to buy, I'm just telling buyers it's going to be even better in two or three years. Don't let the shills try to make you jump in now when there's still a big downside coming. No one whose paycheck depends on housing will dare tell people that. BUT I WILL.

As for the stocks/renting analogy, sell it down the road. There are thousands of speculators and other bottom-fishers in Las Vegas who can't make their rental properties pencil out at the moment. Don't be disingenuous.
By johnevegas

2/19/09 at 5:58 a.m.

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"Don't be disingenuous."

Because I don't agree with you I'm being disingenuous? You weren't very good on the debate team were you?

Pencil this out Einstein. It is easy to justify purchasing, right now, and to substantiate all reasonable and likely mortgages through rentals, both traditional and furnished.

I'm not a shill. I stand to gain nothing from the advice other than by subscribing to it myself. It's the truth as I see it. If you think that is disingenuous, then that's a problem for you to work on. Disagreement is how I see it. Nothing more.
By nightmare

2/19/09 at 8:16 a.m.

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I moved here from Detroit four years ago and am re-living the housing collapse here. Due to the mess that is the auto industry, Detroit got started on its housing collapse years before the rest of the country, even while every other city was red hot.

Vegas is analogous to Detroit in several ways, most notably heavy dependency on one industry that is shedding jobs in high volumes. I laugh at all the people who say that LV house prices can't get any lower. I've been hearing that for two years now.

I have bad news: LV housing prices can go lower, they can go a LOT lower actually. I am not saying they will, but they most certainly can. Ask anyone in Detroit, where house prices have been plunging for six or seven years now, down to levels that were once unthinkable, and a lot lower than current LV prices (try $50-$60 a square foot for a nice house in a nice neighborhood).

House prices are not dictated by logic or owner's wishes. There is no magical bottom point that can't be crossed. Prices are dictated by supply and demand, and right now there is much more supply than demand, thus the downward pressure on pricing will continue. And with the difficulty in securing a home loan today and for the foreseeable future, don't expect demand to pick up by any significant amount any time soon.

These morons that at every point in time say "this is the best time to buy a house" should be slapped. I can forgive realtors for saying this since that is how they make a living, but non-realtors really should stop this nonsense. This sort of mentality is part of what got us as a nation into this mess. Here is some simple advice folks: buy a house when it matches your lifestyle needs, meaning you can sensibly afford it and you plan to stay a while. If you are buying a house out of fear that you will miss out on the best deal by not buying today, then you are speculating and you are part of the problem.
By jfnance32

2/19/09 at 8:25 a.m.

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I agree the interest rates are at the lowest point. Inflation is already starting to occur because the US is pushing a tons of Federal bonds on the market. The bonds will not get purchased at the same rate as in the past. That means the USA will print money to make up the difference. That means each dollar you have will hold lower value.

That means higher future interest rates.

Housing prices will continue to drop.

So one must do a calculation with a lot of guessing. How much will housing prices fall? vs. How much will interest rates rise?

It would be extremely foolish to buy houses for investment goals.

If you are in a rental and believe that your income is very secure and you have OK credit then you should consider to buy a house.

But you buy now then you should realized that your down payment equity will be eaten into by falling housing prices in the near term.

You should also realized that the longer you wait for a house the higher the interest rates will be and its effect on your monthly mortgate payment.

I think it safer to wait. Keep an eye on interest rates and if the housing price deflation seems to slow down then jump in.

You should also worry about your income.

We are very far from ending this round of job loss and negative GDP growth.
By neiman1

2/19/09 at 11:25 p.m.

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There will not be a demand for housing in Las Vegas until the jobs come back, and I am not seeing where that ever happens.
By Ed

2/20/09 at 2:39 p.m.

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This town is dying
By bobojake

2/20/09 at 4:26 p.m.

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A house is worth what people can afford to pay after utilites, food and living expenses. Not to many can afford payments on a $150,000 house. Wake Up obama you can't solve it from Washinton, you are part of the problem obama along with ACORN-schummmmer-reid-peloski-frank and dodd.
By BTP

2/20/09 at 10:12 p.m.

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After spending 40 years in construction here's some advise #1 The construction industry is the rudder that steers the economy #2 There will not be recovery in this country till the glut of houses have been sold and the blue collars go back to work.So hold to your hats folkes!!