Fewer existing LV homes sell in May, June than in 2009

By Buck Wargo

Friday, July 30, 2010 | 3 a.m.

Sales of existing homes in Las Vegas ended a two-year run of year-to-year increases in May.

That’s when the 4,186 sales were 69 fewer than May 2009. That wasn’t an aberration; it repeated itself in June when the 4,968 sales were 79 fewer than a year earlier, according to Las Vegas-based SalesTraq.

The reason behind the dip is in part a reflection of growing price stability and in some areas price gains, said Andrew LePage, an analyst with MDA DataQuick of San Diego, a research firm.

That has coincided with the decline in foreclosure sales over the past year, LePage said. “Buyers have fewer bargains, especially under $100,000, to choose from,” he said

DataQuick reported June’s sales of existing homes priced below $100,000 fell to 28.9 percent of all transactions. Such sales were 32.1 percent of all transactions in June 2009. The sale of homes from $100,000 to $200,000 rose to 47.6 percent, up from 43.9 percent a year ago.

Foreclosure sales fell to 46.4 percent of all resales in June, down from a near-record of 70 percent in June 2009. June’s foreclosure sales were the lowest since January 2008, the firm reported.

“The drop in the number of foreclosures selling has created some stiff competition between first-time buyers and investors, who continue to represent a huge portion of the market,” LePage said.

In the first six months of the year, foreclosures in Las Vegas fell from 2009’s 10,926 to this year’s 8,481, SalesTraq reported.

Absentee buyers, which include investors and second-home buyers, bought 37.5 percent of area homes in June, down from 40.9 percent in May. Government-insured Federal Housing Administration loans, often used by first-time buyers, accounted for 54.5 percent of home-purchase loans in June, up from 51.7 percent in May, according to DataQuick.

Steve Bottfeld, executive vice president of Marketing Solutions, said several factors shouldn’t be overlooked when examining the year-over-year decline in existing-home sales.

One is June’s bump of new-home closings that rose to 983, the most since March 2008, Bottfeld said. Builders are constructing homes that are priced correctly and sized correctly, he added.

The median price of new homes fell to $182,440 in June, about $9,000 less than May, SalesTraq reported.

Bottfeld said that with a 2 1/2-month supply of existing homes, many of the good foreclosures have been picked over, and the supply isn’t being replenished like it was. Some of the foreclosures coming to the market today tend to be higher-priced homes that first-time buyers and investors aren’t as interested in, he said.

Las Vegas’ high unemployment rate of 14.5 percent may be making some buyers nervous about purchasing in this environment, Bottfeld said.

Retail opportunities pursued

Investors are showing more interest in acquiring retail properties in Southern Nevada, said Mike Mixer, Colliers International Las Vegas managing partner.

With that in mind and expectation it will grow, Mixer said his firm has added a brokerage team that specializes in investment sales and retail leasing.

The team is called the Tumbleson Investment Group and includes Jeff Berg, Mica Berg, Ron Berg and Eric Tumbleson. They had been with NAI Global’s Las Vegas office and represented Marnell Properties in leasing McCarran Marketplace.

“Retail in Las Vegas is looking increasingly enticing for all sorts of investors,” Tumbleson said. “A Chinese investor told me that ‘Vegas is sexy. Vegas is Macau, but on sale.’ ”

Tumbleson Investment hosts an hourlong radio show at 6 p.m. Wednesdays on KLAV 1230-AM.

Marcus & Millichap office outlook

The California-based research firm said it expects office employers in Las Vegas to create about 700 jobs this year, not enough to make a dent in the vacancy rate. At least that’s an improvement over 2009, when office users cut 7,300 jobs, said Michael Yeager, research assistant.

Since the recession began, more than 25,000 office jobs, or 14 percent of the sector, have been eliminated, leaving large blocks of space, Yeager said. Tenants will continue to downsize when leases expire, he said.

The firm expects Las Vegas’ office vacancy rate to surpass 25 percent by the end of the year after ending last year at 24 percent.

The vacancy rate has surpassed 30 percent for buildings constructed since 2005. That includes the southwest and area surrounding McCarran International Airport, he said.

Owners will lower rents more, effectively falling 5 percent this year once concessions are included, Yeager said.

No office space of any significance is projected to be added this year after 658,000 square feet were completed last year, Yeager said.

In other news

• Maryland-based Total Wine is opening a liquor store at the Stephanie Street Power Center at the northwest corner of Stephanie Street and Warm Springs Road. The 13-year-old 374,000-square-foot center has increased its leasing since the closure of Wild Oats, Copeland’s Sports and Circuit City, said Chuck Creigh, principal of New Market Advisors.