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December 28, 2014

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Housing market continues slide in Las Vegas

November’s sales lowest for month since 2008

Las Vegas’ housing market deteriorated more in November with no signs of improving in the near future, analysts said.

San Diego-based MDA DataQuick reported Dec. 21 that November existing- and new-home sales fell 23 percent from November 2009 and dipped more than expected (7 percent) from October’s sales. November’s sales were the lowest for the month since 2008 and were 15 percent below November’s average for the past 16 years.

Las Vegas-based SalesTraq reported Dec. 21 that the 3,916 existing-home closings in November were the fewest since February and 12 percent below November 2009.

Year-over-year sales have fallen for seven consecutive months — the decline blamed on the loss of the federal homebuyer tax credit, which effectively ended April 30.

“Beyond the lost government stimulus this year, the housing market has suffered from a painfully slow economic recovery, the lack of significant job growth and potential homebuyers concerns about job security,” DataQuick spokesman Andrew LePage said.

Also, many homeowners owe more on their homes than they’re worth and aren’t in a position to move, he said.

The median price of existing homes sold in November was $115,000, $2,000 higher than October, but 6 percent below November 2009’s $122,700, SalesTraq reported.

DataQuick said the median price for all homes has fallen 59 percent since June 2006.

Las Vegas is likely to fall short of its 2009 housing sales numbers of 52,015. It’s sold 46,109 through the end of November.

In the new-home market, 391 closings in November were 56 more than October, but 43 percent below November 2009.

DataQuick said it is the slowest November for new-home sales since it began tracking numbers.

New-homes prices declined as well in November. The median price of $200,850 is the lowest since May, SalesTraq reported. The price, however, is 1.2 percent higher than November 2009.

That median price was boosted because of 28 high-rise and midrise sales with a median price of $305,000. Excluding those sales, the median price was $195,955, SalesTraq reported.

Five thousand eighty-seven new-home sales through the end of November are likely to barely surpass 2009’s 5,244 sales.

Builders aren’t showing much confidence in the housing market. They took out 152 permits, 43 percent less than November 2009. The monthly total is the lowest since 128 were issued in February 2009, SalesTraq reported.

This year’s new-home permits surpassed 2009’s total — 4,085 versus 3,776.

Home Builders Research said the number of building permits issued so far is 4,243, 21 percent higher than 2009’s. The federal tax credit resulted in about 750 homes being built, Home Builders President Dennis Smith said.

Good news for the housing market is the decline in home repossessions — only 971, a 36 percent decline from November 2009. But some analysts said that’s a temporarily lull because of the national controversy over lenders not checking foreclosure documents and the decision to slow down the process because of that.

For the year, Las Vegas has 19,883 foreclosures, which means the city will fall short of the 24,000 in 2009.

Steve Bottfeld, executive vice president of Marketing Solutions, said banks may be cutting back on foreclosures because they realize the benefit of allowing homeowners to sell short. That’s when the homebuyer can sell the home for less than is owed on the mortgage.

In November, short sales fetched a median price of $125,000 compared with $111,000 for foreclosure transactions, SalesTraq reported. Even traditional sales with a buyer and seller fetched only $119,200 in November.

Foreclosures accounted for 41 percent of the sales in November with its 1,597. There were 1,187 traditional sales, and short sales comprised 21 percent of total. Auction sales made up the rest.

Bottfeld and SalesTraq President Larry Murphy said there’s no indication of a price rise with distressed sales making up such a large part of the market. Sixteen percent of homeowners are delinquent in mortgage payments and at least three-fourths are underwater, keeping prices down, they said.

Investors and second-home buyers purchased 44 percent of the homes in November, up from 43.6 percent in October. Cash sales accounted for 49 percent of the purchases, down from 51.5 percent in October, DataQuick reported.

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  1. "It's always a good time to buy a house," or so they said.

    This is the fault of Republican deregulation. Growth controls would have helped. Curbs on casino, commercial and residential development would have helped.

    Canada and Australia had the government protect the market.

    Australia put curbs on foreign speculation.

  2. I am still waiting. Wasiting to get my 2 bedroom condo in Summerlin for $40K. It's getting closer.

  3. "Australia put curbs on foreign speculation"...
    Ah! Government interfering with the Free Market Forces, that's Socialism in America.

    Canada doesn't entrust the fate of the entire Nation's financial security over to self anointed financial experts either - Socialists again!

    The Free Market Economy breeds true freedom, the ability to walk away from a Mortgage, once every seven years when the job market collapses. Walking is freedom, even if it is in the rain and snow.

  4. Canada totally avoided the housing meltdown that has decimated American homeowners. It wasn't just luck.
    1. In Canada the government insures all mortgages of more than 75% of a home's value, so individual banks would not be put at risk if prices had plummetted. Therefore, no bank bailouts would have been required.
    2. Canadian homeowners cannot walk away from their homes without putting their other assets at risk of seizure. Therefore, investors cannot buy ten condos on spec and just hand the keys to the lender if prices drop instead of rise.
    3. A homeowner's mortgage interest is not tax deductible in Canada, so there is no incentive to borrow as much as possible to maximize one's tax deduction.

    America does not seem to be addressing the basic issues that combined to kill the American homeowner. Changes could be incorporated to ensure that the next housing bubble does not threaten to bring down the entire economy. But I see no evidence that any changes are being discussed by the American government.