Home prices drop by smallest amount since 2007

By Buck Wargo

Tuesday, June 9, 2009 | 9:10 a.m.

Las Vegas home prices dropped in May by their smallest percentage since November 2007 as demand for housing approached record levels, according to statistics released Tuesday by the Greater Las Vegas Association of Realtors.

The median price of homes sold in May was $140,000, a 1.2 percent decline from April when the price was $141,720. Prices, which are at their lowest level since 2001 by the Realtors’ group calculations, had been dropping by more than 4 percent a month in the previous two months and as much as 8.6 percent in January. This is the smallest decline since a 0.4 percent drop from October 2007 to November 2007, according to the group, which tracks all homes sold through Realtors.

Whether this means the steep price declines in Las Vegas have come to a halt remains to be seen. Since the peak, the price of single-family homes has fallen 55 percent from $315,000 in June 2006, according to the numbers, which includes new homes sold through Realtors.

“We may be reaching a bottom, but we have to be careful because it could be a false bottom,” said Las Vegas housing analyst Steve Bottfeld, executive vice president of Marketing Solutions. “Larry Murphy (SalesTraq president) always says one month does not a trend make. Show me another month that goes up or pretty much stays the same, then we have a trend. We may be at the beginning of the end. We may have an upward trend in pricing.”

Rather than an indication that price drops have moderated, the mix of homes sold in May could have skewed the median price, said John Restrepo, principal of Restrepo Consulting.

The average price of single-family homes sold in May was $172,558, a 3.8 percent increase over April. That’s the first increase in the average price this year, suggesting some slightly higher priced homes are selling.