New-home sales reverse trend, jump 42 percent in 2012

New-home sales jumped 42 percent in Las Vegas last year with 5,544 closings, putting an end to the declining housing market, analyst Dennis Smith said Monday.

The president of Las Vegas-based Home Builders Research reported 617 new-home sales in December, compared with 374 in December 2011. The median new-home price rose 2.8 percent to $218,114, he reported.

"It's obvious that the bottom of the recent vicious housing cycle that has gripped Las Vegas was in 2011," Smith said.

Although median prices are an accurate description of what has been sold, they lag behind the market, as most new-home sales contracts are written six months before escrow closing, he said.

Home Builders Research reported 4,083 resales in December, bringing the 2012 total to 49,657, a 2 percent increase from the previous year and the fourth highest on record.

The median resale price was $139,000, up from $133,000 in November and the 10th consecutive monthly increase. It's up $29,000, or 27 percent, from a year ago.

"Yes, this is absolutely a good thing to see. However, before anybody gets onstage and tries to convince us that our housing market is in fine-and-dandy shape, there are a bunch of other factors that must get better," Smith said.

Tops among them is job growth, he said. The unemployment rate in Las Vegas dropped to 10 percent in December, the lowest in three years. Jobless claims declined in 34 of the last 37 months.

"Although the economic news for Las Vegas is continuing to show improvement, we are still suggesting caution," Smith said.

The Zillow.com online listing service projects home values will rise 3.1 percent in Las Vegas this year, compared with a 3.3 percent increase nationwide.

Zillow showed the Las Vegas metro median price rose 13.9 percent to $129,100. North Las Vegas home values increased 16.9 percent to $110,400; Las Vegas was up 14.7 percent to $123,700; and Henderson was up 12 percent to $168,600.

Values also rose in the short term, up 5.5 percent in the fourth quarter from the previous quarter. Las Vegas metro home values are now back to August 2000 levels, Zillow reported.

The market is gaining momentum, but the spectrum of submarkets are recovering differently, making it nearly impossible to generalize about Vegas real estate as a whole, said Richard Lee, vice president of Ticor Title of Las Vegas.

One recovery is the gradual return of new-home construction, he said. Another is the bulk purchase of foreclosed homes by institutional investors. There's also a wave of individual buyers, driving condo demand as an alternative to depressed return rates from financial markets.

"Great signs," Lee said, "but it won't be a real recovery until the whole Vegas market is moving forward at the same time, at the same pace."

Builders pulled 403 permits in December, bringing the annual sum to 5,908, a 58 percent increase from 2011 permits, Home Builders Research reported.

"Once again, the annual comparison is with the worst year ever recorded," housing analyst Smith said. "The best part of this is the change of direction of the trend, which we think will be upward for the foreseeable future."

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.