Las Vegas housing supply hits 3-year low

By Buck Wargo

Friday, July 24, 2009 | 3 a.m.

The number of existing homes on the market fell to the lowest level in more than three years, but the declining inventory is likely poised to rebound after Las Vegas reported a jump in foreclosures in June, according to newly released statistics.

After a record number of existing-home sales in June at 4,663, SalesTraq reported that the inventory on the Multiple Listing Service fell to 12,653 or a 3.4-month supply — a level not seen in several years, President Larry Murphy said. The listings are the fewest since 11,497 homes were on the market in December 2005.

The dwindling supply of foreclosed homes is one reason existing-home prices have stabilized in the last couple of months, housing analysts said.

The median price of $125,000 in June is the same as it was in May, SalesTraq said. The research firm revised its April existing-home price down to $120,000, signifying that prices have rebounded slightly since that low-water mark was reached.

Murphy, one of the housing statistic gurus in Las Vegas, said the inventory decline matches anecdotal evidence by real estate agents, who are saying the lower-priced foreclosure supply has been picked over by buyers.

Foreclosed properties accounted for 62 percent of the sales in June, down 2 percentage points from May, and sold for a median price of $113,900. The nonbanked-owned properties sold for a median price of $145,000 in June, according to SalesTraq.

Murphy said he doesn’t see anything positive in the numbers, even though inventory has declined and the record number of sales surpassed May’s by more than 600.

“The bottom line — my gut feeling — is that we can tell ourselves there has been an improvement and prices have stabilized, but I don’t see anything significant. Nothing jumps out at me that says the worse of it is absolutely behind us and happy days are here again,” he said.

Murphy said he expects the local housing market to thump along the bottom for a while and prices to stay in the range they are in.

“I don’t think it’s any great news,” Murphy said. “It’s more of the same.”

One red flag is home repossessions, Murphy said. In June, 2,486 homes were foreclosed, 717 more than May and the most since August’s 2,810. He said he wouldn’t be surprised if as many as 3,000 homes are repossessed in July.

From March to May, fewer than 2,000 foreclosures a month were reported, with the low being 1,289 in April.

Murphy said it’s starting to be obvious that the dip in foreclosures was because of a self-imposed moratorium by lenders that for many ended in early March. That should increase the supply of homes in the coming months and hopefully there will be buyers to match the bigger inventory, he said.

Data released last week by California-based RealtyTrac point to more foreclosures in the pipeline.

In June 8,726 default notices were filed against Nevada homeowners, and 3,786 homes were repossessed statewide.

RealtyTrac said unemployment-related foreclosures account for much of the increased activity, and the high number of borrowers who find themselves owing more on their mortgages than their homes are worth represents a significant risk.

Overall, foreclosure filings rose by 9 percent compared with May and were 115 percent higher than June 2008, RealtyTrac said. There was one filing for every 59 households, which leads the nation.

The second-worst state in foreclosure filings was California with one filing for every 132 households. Arizona was third with one filing for every 158 households.

For the first six months of the year, Nevada foreclosure filings were up 61 percent compared with last year’s period. They were 23 percent higher than the second half of 2008, RealtyTrac reported.

Las Vegas housing analyst Steve Bottfeld, executive vice president of Marketing Solutions, said the latest housing statistics tell him that Las Vegas has hit bottom.

The stabilizing of home prices is one reason and the decline in inventory is another. New- and existing- home sales hit their highs in June, he said.

Existing-home sales exceeded the number of foreclosures created for the fourth consecutive month, he said. Even though the moratorium has ended, he said he thinks that trend “now looks solid.”

Financial institutions have about 13,000 repossessed homes that have yet to be put on the market, down from 16,400 in February, Bottfeld said.

SalesTraq said the 474 sales in June was the highest monthly total this year, but is still paltry by historic comparisons. Sales were down 46 percent compared with June 2008.

The median new-home price was $209,382 in June, about $2,000 less than May. New-home prices have held steady for the past five months because builders say it is hard to make a profit by cutting prices much further.

Despite the dip in median prices, the price per square foot for new homes rose in June. They sold for $107.65 per square foot in June, up by $1.06 per square foot compared with May

The number of active subdivisions fell to 288 in June, 37 percent below the 460 active subdivisions in June 2008.

The average sales per subdivision in June rose to 1.65, the highest since December when it was 1.81 sales per subdivision, SalesTraq said.

Home construction remained tepid by historic standards, but 343 permits issued in June are the most taken out by builders since 396 were issued in October.