Thursday, Nov. 18, 2010 | 2:05 a.m.
Las Vegas home prices are projected to fall 16 percent by next June and another 7 percent in early 2012 before rising by the end of that year, according to a Wisconsin research firm.
The latest report by Fiserv, which produces the Case-Shiller Indexes, paints a poorer picture about the Las Vegas housing market than it did in July, when it projected existing home prices would fall 14 percent by early 2011 and another 4 percent in 2012.
Fiserv Chief Economist David Stiff attributes the worsening picture to the reduced demand for Las Vegas housing since the federal homebuyers tax credit ended effectively in April.
Starting in May and going through October — the last month of available data — Las Vegas-based SalesTraq has reported existing home sales have fallen year-over-year.
“What happened was the tax credit delayed the full correction in prices,” Stiff said. Fiserv reported prices fell only 5 percent between the second quarter of 2009 and second quarter of 2010, the latest period available.
The Las Vegas price decline of 5 percent in the second quarter contrasts to the nation as a whole as prices rose 3.6 percent, Fiserv reported.
“You have a large supply of distressed properties and with a high unemployment rate, you don’t have a high enough demand for your inventory,” Stiff said. “I think there is a lot of uncertainty of where prices will bottom.”
Fiserv’s housing numbers show bigger drops than other research firms, and their numbers have sparked debate.
The company calculates prices by what the same homes sold for in the past and not by comparing sales of whatever homes are sold in a particular month.
SalesTraq, for example, has reported that Las Vegas home prices have held steady for 18 months. Since June 2006, average prices have fallen $170,000 to $118,000, a decline of 59 percent, SalesTraq reported.
Stiff said investors have helped boost the Las Vegas market and keep prices up by their activity, which some analysts said falls in the mid-40 percent range of existing home sales.
If their activity falls off, that would further depress prices, Stiff said.
In the second quarter, Phoenix’s prices rose 5.5 percent, but Fiserv projects its prices will fall 16 percent through the second quarter of 2011. The nation’s prices are expected to decline 7.1 percent during that time span, the firm reported.
Meanwhile, CoreLogic, a California-based research firm reported that Nevada home prices in September fell 6.86 percent when excluding foreclosures and other distressed sales. When including foreclosures, prices fell 3 percent from September 2009, the firm reported.