Report: Home prices fall at slower pace in April

Index shows home price decline greater in Las Vegas than other cities

Steve Marcus / File photo

The downturn in the real estate market has lowered home prices, such as in this Henderson neighborhood, to levels not seen in years. Lower prices have increased home sales, a factor leaving some economists optimistic that a rebound in the economy is around the corner.

By Steve Green (contact)

Tuesday, June 30, 2009 | 9:45 a.m.

Download the S&P/Case-Shiller Home Price Index report

Las Vegas home prices continued to fall through April at a rate far greater than most big cities -- but the pace of decline slowed both here and nationwide.

That's according to debt rating agency Standard & Poor's, which today released its S&P/Case-Shiller Home Price Indices covering 20 big U.S. markets.

"The pace of decline in residential real estate slowed in April," David M. Blitzer, chairman of the Index Committee at Standard & Poor's, said in a statement. "While one month's data cannot determine if a turnaround has begun; it seems that some stabilization may be appearing in some of the regions. We are entering the seasonally strong period in the housing market, so it will take some time to determine if a recovery is really here.

"The stock market bottomed in March and measures of consumer confidence have turned upward. This report shows that these better spirits are also appearing in the housing market," Blitzer added.

Housing analysts, however, have warned in recent weeks that further declines in home prices are likely as foreclosure activity remains strong. They say high unemployment has left many Americans unable to pay their mortgages or qualify for home loans, while millions of adjustable-rate mortgages will reset higher -- pushing more loans into default.

S&P said that comparing home prices in April 2008 and April 2009, the three worst-performing metro areas continue to be the same three from the Sunbelt. Phoenix was down 35.3 percent in April, Las Vegas declined 32.2 percent and San Francisco fell 28 percent.

Prices measured by S&P in Las Vegas fell 3.5 percent from March to April vs. a decline of 3.8 percent from February to March, S&P said.

The 20-city composite price was down 0.6 percent from March to April vs. 2.2 percent from February to March; and in April was down 18.1 percent year-to-year.

The April numbers in the Case-Shiller report are in line with statistics issued for May by the Greater Las Vegas Association of Realtors. The Realtors said the median home price in the Las Vegas area was $140,000, down 1.2 percent from April. Prices in that range in Las Vegas were last seen in 2001.

New home builders, in the meantime, are struggling to sell homes because of the weak economy and competition from foreclosed existing homes.

The U.S. Commerce Department last week reported sales of new single-family homes declined 0.6 percent in May to a seasonally adjusted annual rate of 342,000 units.

"In the midst of the prime home buying season, builders report that a number of factors are limiting new-home sales. These include consumer concerns about job security, potential buyers' inability to sell their existing homes, and problems with appraisals coming in too low," Joe Robson, chairman of the National Association of Home Builders and a home builder from Tulsa, Okla., said in response to that report. "The latter issue is directly related to the use of distressed properties (foreclosures and short sales) as comps (comparables), which disproportionately impacts assessed values of nearby homes."

The Commerce Department report "provides further evidence that the recovery is going to be a slow one as the housing market continues to bump along, trying to find a bottom," said NAHB Chief Economist David Crowe.

"The good news is that, even as the sales pace leveled in May, inventories of unsold new homes continued to shrink for a 25th consecutive month -- a trend that is helping bring supply and demand into better alignment and thereby setting the stage for an eventual market recovery," Crowe said.

Discussion: 9 comments so far…

By gdperson

6/30/09 at 10:17 a.m.

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What home, mine is sitting empty.
By stevem

6/30/09 at 10:28 a.m.

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call me when we have home prices increasing 3 months in a row.

that's when we can say with some evidence that the worst is over.

there are so many homes in las vegas and with people moving OUT of las vegas and unemployment creeping up every day, i don't see much hope on the horizon.
By jaesun

6/30/09 at 10:33 a.m.

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real estate "professionals" calling it stabilization already? lol
By gqbossing

6/30/09 at 10:42 a.m.

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It's stabling, but that's just relative to the nosedive. IMO we are in a period where (if something catastrophic doesn't happen) we will see modest to miniscule declines, and even some increases in certain areas. I would be very surprised if prices started excelerating downward at an increased pace again.

We've simply hit a point where it's cheaper to buy then rent, and investors have been and will continue to take a ton of inventory off the market to rent to people who cannot buy. Anyone who has been in the market lately can surely attest to this.

I wouldn't expect a rebound in prices until the masses are able and do come back, and that's probably not this year, however the simple fact thate investors and people who stood on the sidelines during the boom still buying will keep prices from drastically going down.
By RebelRebel

6/30/09 at 11:10 a.m.

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Its all pretty simple. I agree with gqbossing that investors are buying the homes up. If owners who offer a place to rent do not react in a dramatic way by offering a much lower rent(which might not be possible for many due to their costs), then of course people will buy. And guess what happens when demand increases? Supply decreases, and house prices begin to increase. You can not find the deals on homes right now that you could 4 months ago. The housing market is turning around, but it will take some time, but we ultimately need the unemployment rate to drop for a real turnaround. So, when will that happen? Well, not for a long time if the proposed increase in state payroll taxes takes on a dramatic increase as is predicted. Why would you have your small business in a place with high payroll taxes?
By HookorCrook

6/30/09 at 2:55 p.m.

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Simply put, only when the vast majority of the residential mortgages roughly equal the value of the houses will the Vegas Valley economy recover. Either by foreclosure, mediation, voluntarily principle reductions, or whatever. Until that happens the Great Recession will not end.
By dave202

6/30/09 at 3:05 p.m.

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Hip Hip Hurray!

This passes for good news?

Nice try, Sun, but things still suck. And now it's Obama's fault.
By Sabibaby

6/30/09 at 5:42 p.m.

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Less bad is the new good!
By dipstick

6/30/09 at 6:16 p.m.

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las vegas isnt unique concerning the housing downturn, but it is at the bottom of the food chain; this may be the right time to re-invent vegas with a wider tax base other than casino gambling. its time state and local govts to get off their dead ass and make things happen.