S&P: Las Vegas home prices down 31.4 percent

Local prices fall further than any other market in the 20-city report

Steve Marcus

A Standard & Poor’s/Case-Shiller Home Price Indices report released today shows Las Vegas home prices fell further over the past year than any other city it tracks.

By Steve Green (contact)

Tuesday, Sept. 29, 2009 | 7:53 a.m.

See the S&P/Case-Shiller Home Price Indices reports

The foreclosure-heavy Las Vegas housing market led the nation in price declines in July in a widely-watched report issued today covering 20 big-city markets.

New York debt-rating company Standard & Poor's issued its S&P/Case-Shiller Home Price Indices. The report found prices in the 20 cities declined 13.3 percent in July compared to July 2008; and that overall they rose 1.6 percent from June to July.

Las Vegas prices were down 31.4 percent year-over-year and 1.1 percent from June to July -- with both declines the largest reported among the big cities.

The monthly rate of decline was down, however. Las Vegas prices fell 2 percent from May to June.

Standard & Poor's noted Las Vegas prices are down 54.8 percent from their peak in August 2006.

The Las Vegas numbers are in line with existing-home price data for August issued Sept. 10 by the Greater Las Vegas Association of Realtors.

The Realtors said the median price of a single-family home sold in the Las Vegas area in August was $135,500, down 2.4 percent from $138,800 in July and down 35.5 percent from $210,000 one year ago.

For Las Vegas-area condominiums and townhomes, the median sales price in August fell 1.1 percent from $67,000 in July to $66,288. That’s down 46.1 percent from $123,000 one year ago.

Las Vegas-area home prices initially suffered as the subprime mortgage crisis unfolded starting in 2007; and lately the market has been harmed by soaring unemployment that hit 13.4 percent in August. Unemployment locally has been driven by the U.S. recession that has reduced visitation to the city and declines in the big construction and development industries.

Elsewhere around the country, some stabilization has been seen in the residential real estate market.

"The rate of annual decline in home price values continues to decelerate and we now seem to be witnessing some sustained monthly increases across many of the markets," David Blitzer, chairman of the Index Committee at Standard & Poor's, said in a statement. "These figures continue to support an indication of stabilization in national real estate values, but we do need to be cautious in coming months to assess whether the housing market will weather the expiration of the Federal First-Time Buyer's Tax Credit in November, anticipated higher unemployment rates and a possible increase in foreclosures."

Discussion: 18 comments so far…

By neiman1

9/29/09 at 8:09 a.m.

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The rate of decline slowed however. Hope and change
By laniac

9/29/09 at 8:39 a.m.

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I think spending billions to build a maglev train to Anaheim will make all of the problems in Las Vegas disappear.

Seriously though - while I am not a Vegas resident, I have been visiting Vegas since the 80s and have relatives living there for the last 15 years. I considered investing in real estate there for many years, but kept saying to myself the amount of development is insane. The only thing driving development was more development and speculation. I felt pretty stupid around 2005 when prices had doubled or tripled. I dont feel so bad now though...
By Sergio_the_Prophet

9/29/09 at 9:09 a.m.

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Prices are not going to stabilize around the 120K range for homes and 60K for condo's this year and next. Why? Investors can not get positive cash flow from rentals, that's why. Anyone with the money (or credit) can buy a house or condo and have it paid off free and clear within 4-5 years with the profits from rent. That's a hell of an investment! I don't know why the banks don't stop selling REO's and start renting them out at these prices. That alone would stabilize the market. All this despite the fact I see unemployment going to 20% in the valley. Why? With low rents, this will be a good place to retire. Just a hunch.
By Sergio_the_Prophet

9/29/09 at 9:12 a.m.

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typo's, not should be now, as in prices are now going to stabilize and investors can now get positive cash flow. I don't proof read what I post here ...or spell check.
By homer

9/29/09 at 9:28 a.m.

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what do you know the nit wit neiman did not blame Obama for this problem. Woops this happened under his hero George Bush and his crew of deregulators, Gramm and McCain.
By artswanson

9/29/09 at 9:33 a.m.

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Now get a grip kiddies, the real decline has been over 50% from the market highs in 2006! Yes, 31.4% year over year 2008-2009, but dont forget the over 20% declines in 2007-2008 time period! And prices are still going down! Dont you want to get out the bull whip and tie those GLVAR sob's to the Welcome to Las Vegas sign and strip their greedy flesh of the bastards!
By formervegas76

9/29/09 at 10:35 a.m.

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hey homer, neiman did put in that hope and change part, forgetting bush gave us alot of change for all us dopes
By pmmart

9/29/09 at 11:12 a.m.

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"what do you know the nit wit neiman did not blame Obama for this problem"

He didn't?

OK I will... The housing 'crisis' could be ended tomorrow if the politicians wanted it to end..at little or no cost to the taxpayers.. the fact that it isn't getting addressed should tell us one of two things... 1 sombodies are very happy with the status quo[making lots and lots of money] ... and ... 2 sombodies think we need to punish the folks who are 'upside down' on their homes.

p.s.

I own my house free and clear, owe nada on my 2 autos and owe zilch on my one and only credit card... my interest in the housing 'crisis' is in seeing an end to the unnecessary despair caused by our politicians and their special interest cronies.
By stevem

9/29/09 at 1:01 p.m.

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what we saw here was growth to support growth. now that we've paved and built almost every square inch in this valley, we no longer have enough useable land to get enough contruction going to ever fill up all these homes.

yes, they might get going on echelon someday.

yes, they might widen the 15 or 215 someday.

but the days of there being a constant pipeline of construction jobs on the strip is over.

watch what happens when all the construction jobs at city center end. those workers with their good pay ( that have been fueling the rental market ) are going to leave town and that's going to creat a black hole in the rental market and the days of buying a $150,000 home and getting enough rent out of it to cover the mortgage will be long gone.
By llking

9/29/09 at 2:16 p.m.

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I agree with stevem on the excessive rental properties. First, the sheeples buy and flip. Now, they turn to buy and rent. Eventually, there will be a gaping hole in the rental market. I personally think it would hurt the apartment rental more and eventually will have a dominoe effect on the single home.

Read somewhere that nevadans are moving out but there's no substantive data found on the web.
By artswanson

9/29/09 at 4:43 p.m.

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Prices are down over 55% from their peak. Real Estate markets tend to over compensate on the up and now on the down side of any bubble. Further declines of 1% per month for next year are well within the Case Shiller Model. This is confirmed by local appraisels of recent sales and projections of foreclosure sales into the year 2012. Look toward 2015 before any normal real estate market returns to the Valley. If you look at the trend line on housing prices prior to 2000-2001. you will see that the historic appreciation of 3-4 % a year was the "norm". Extrapolating ahead this trend out to 2015 and you will see that prices wont return to this trend before the lines cross back over to the historic mean trend line. Condo prices are still cratering and at this point could well be a decade before any of these units will be worth anything close to their peak prices. If you add inflation into this picture, real estate will be sucking hind teat for a long, long time. This is the price Las Vegas is paying for the wild speculation and greed of aided and abetted by the usual suspects in the sorry saga! Note to those who disagree: During the Dot Com bubble same gamed played out, now 10 yrs later NASDAQ still down 50% from its highs prior to bust in 2000-2001!
By judgesmales

9/29/09 at 4:55 p.m.

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This article is clearly false, because Las Vegas real estate has hit the bottom in practically every month since the collapse in 2007.

How do I know that? Because the Sun kept quoting Steve Bottfeld, Larry Murphy and the GLVAR shills month after month, story after story, saying prices couldn't go any lower, don't miss this buying opportunity, blah, blah, blah.

So which is it, Sun? Is this article the real deal? If so, that confirms what I've written here for months and years: all of the Sun's real estate sources are either idiots or shills who desperately need the RE market to recover because their livelihood as a "local housing consultant" -- whatever that is -- depends on it.

Either way, they're badly compromised, no matter how neutral or unbiased "local housing consultant" sounds.

I think it's time to find some new RE talking heads, Sun. Look in the phone book under "Party Clowns." By sheer chance, you've got to come up with someone with more credibility than Bottfeld, Murphy, Abbott & Costello, Laurel & Hardy, and Dewey, Cheatem & Howe.
By Patrick_R_Gibbons

9/29/09 at 4:59 p.m.

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Sergio,

With a 13 percent unemployment rate and still decreasing home prices in Vegas it is highly unlikely anyone will recoup their purchase in 4-5 years through rent. 4-5 years might allow you to recover losses through closing costs and other fees associated with the purchase, however.
By mikegino

9/29/09 at 6:10 p.m.

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Gomer: No, it really happened under the aegis of Barney Frank and Chris Dodd.
By LasVegas2009

9/29/09 at 9:45 p.m.

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http://www.zillow.com/local-info/?scid=e...
By markp

9/30/09 at 12:59 a.m.

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and when the goverment want its BS stimulus money back, taxes go up and interest rates go up then what?

this is only mid way into crash... a long way to go a loooong way .............
By fogcity

9/30/09 at 8:16 a.m.

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mikegino, Well no. The repubs were in charge of the Congressional committees and could push whatever legislation they felt like, The Dems did not have a majority in any of those committees,
By skisickie

10/1/09 at 4:50 a.m.

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The market presented a wonderful opportunity for me to buy a retirement home. I almost feel guilty for what I paid. I can finally retire and leave my skis for a new snow queen.