Foreclosures maintained a tight grip on the Las Vegas area’s housing market in May, when the allure of discounted distressed properties kept resale activity at a three-year high. The median price paid for existing single-family houses fell for the 18th consecutive month, a real estate information service reported.
About 73.4 percent of the Las Vegas-area houses and condos that resold in May were foreclosure resales, meaning those homes had been foreclosed on in the prior 12 months. That was up from 55.9 percent in May 2008, according to MDA DataQuick of San Diego. The firm tracks real estate trends nationally via public property records.
A total of 4,536 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County) last month, up 1.9 percent from April and up 23 percent from a year ago. It was the highest sales total for any month since 4,721 homes sold in March 2007, and the highest for any May since 7,615 homes sold in May 2006.
May marked the 14th consecutive month in which sales of existing single-family detached houses rose on a year-over-year basis. The 3,373 single-family house resales last month were the highest for any May since 3,638 sold in May 2006. Resale condos have seen an annual sales gain for 11 straight months.
Sales of newly built homes remain extraordinarily low, largely because home builders cannot compete with heavily discounted foreclosure resales. Last month’s 365 new-home sales rose 12.7 percent from April but were 61.3 percent lower than a year ago. May’s new-home total fell 80.4 percent short of the average number sold in that month since 1994, when DataQuick’s complete (all home types) Las Vegas region statistics begin. The lowest month for new-home closings was January 2009, when 249 sold.
The median price paid for all new and resale houses and condos sold in the Las Vegas metro area last month was $135,000, up 1.5 percent from $133,000 in April but down 43.7 percent from $239,900 a year ago.
The overall median sale price hadn’t risen from one month to the next since August 2007, when it increased 1.2 percent from July 2007. But last month’s slight uptick in the median from April is not a clear sign of price appreciation. Rather, it is the result of a subtle shift toward a slightly higher portion of sales occurring between $150,000 and $300,000, and a slightly lower portion selling for less than $150,000. Also, sales of new homes, which tend to sell for more than the typical resale home, represented a larger share of total sales last month compared with April.
The region’s all-home median sale price has fallen on a year-over-year basis for 25 consecutive months and in May stood 56.7 percent below the region’s peak $312,000 overall median in November 2006.
The median price paid for resale single-family detached houses – by far the region’s largest home-type category – is one of the best gauges of overall price trends. That median fell slightly, to $140,000 in May from $142,000 in April, and was 40.9 percent lower than a year ago. It was the lowest for any month since it was also $140,000 in February 2001, and stood 55.2 percent below its $312,250 peak in June 2006.
Another gauge analysts watch has also fallen sharply from its peak: The median paid per square foot for resale detached houses fell to $77 in May, down 1.3 percent from April and down 36.9 percent from a year ago. It was 59.5 percent below the $190 peak reached in June 2006.
A popular form of financing used by first-time home buyers – government-insured FHA loans – accounted for 52.4 percent of all May purchases, while absentee buyers bought 36.1 percent of all homes last month, according to an analysis of public property records. Absentee buyers are often investors, but could include second-home buyers and others who, for various reason, have their property tax bill sent to an address other than that of the home they’ve purchased.
Across the West, year-over-year declines in the median sale price - the point where half of the homes sold for more and half for less – have sometimes overstated the extent to which the value of the typical home has fallen. It’s because the median is being tugged lower not just by price depreciation but by shifts in the types of homes selling. For example, more of today's sales involve foreclosures, which tend to sell at a discount and be concentrated in more affordable areas. Also, the August 2007 credit crunch made larger "jumbo" mortgages more expensive and harder to obtain, which has led to sluggish sales – in some cases the lowest in many years – in higher-priced communities. (A dropoff in high-end sales can pull down the median.)
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