Report: Vegas tops list of cities where home prices at bottom

By Cara McCoy

Monday, Sept. 28, 2009 | 3:28 p.m.

The end could be in sight for the housing recession in Las Vegas and across the country.

That's according to Forbes magazine, which earlier this month ranked the valley's housing market No. 1 in the country in a list of cities where home prices likely have hit bottom.

Those trying to sell their homes are now shying away from aggressive price cuts. On Jan. 1 in Las Vegas, 54 percent of homes listed had gone through a price reduction; nine months later, by Sept. 11, that number had dropped to 30 percent, according to the magazine's statistics.

Forbes looked at 20 major U.S. housing markets and said the percentage of homes with price reductions is down. Forbes used data from Altos Research and determined that 39 percent of homes for sale nationwide have had their prices reduced -- which is a drop of 6 percentage points from January.

"That the number of for-sale homes with startling cuts has dropped is a sign that the real estate market may soon reverse its downward slide," Forbes said.

The magazine said although the numbers are still high both in Las Vegas and nationwide, the reduction in price cuts indicates buyer demand is on the rise and is beginning to align with the excess of supply that resulted from the building boom earlier this decade.

Forbes cited a prediction from Moody's Economy.com indicating that home prices in Las Vegas will have risen by 3.53 percent five years from now.

"A modest but presentable Vegas two-bedroom is going for a song at $65,000 -- 55.8% less than its original quote," Forbes said.

There's still plenty of lingering bad news. In August, despite a decrease in residential foreclosure activity in Las Vegas, the market was at the top of RealtyTrac's foreclosure list. And the jobless rate in the Las Vegas area reached a record 13.4 percent last month, with an estimated 135,100 workers unemployed (up from 13.1 percent in July).

Forbes cited the $8,000 first-time homebuyers' tax credit as a reason for the positive uptick and warned that if it isn't renewed later this year, demand could drop again.

No. 2 on Forbes' list was Phoenix, followed by No. 3 San Diego.