Las Vegas bound? Trulia notes interest in ‘inbound’ home searches

The bursting of the housing bubble has created strong demand for metropolitan areas in Nevada, Florida and inland California, pushing Las Vegas to No. 9 on the Metro Movers Index introduced Wednesday by San Francisco-based Trulia.com.

Those areas are where home prices have fallen by 50 percent or more, said Jed Kolko, chief economist for the online real estate listing service.

Las Vegas registered 1.88 on the Metro Movers Index, which means Trulia found nearly twice as many "inbound" home searches from outsiders as "outbound" searches by local residents.

"That's typical of cities that have seen huge price declines since the bubble burst and a high vacancy rate, so there are bargains, and bargains attract buyers from elsewhere," Kolko said. "Even from California. We're seeing that very clearly in search activity on our site."

While sales of existing homes in Las Vegas more than doubled from 24,000 in 2007 to 51,000 in 2010, the median price fell 57 percent from $274,000 to $118,000 over that same period, Las Vegas-based SalesTraq reported.

Five of the top inbound markets to Las Vegas are from California, with Los Angeles and Orange County first and second, respectively.

Although Southern Californians account for most of the home searches in Las Vegas, 35 percent of house hunters are coming from 500 or more miles away, Trulia found. Honolulu, New York and Chicago are high on the inbound list.

Despite having more employment opportunities, the higher cost of housing in big cities has made homes in nearby suburbs and smaller metros more attractive to homebuyers and renters, Kolko said.

Reno came in at No. 8 and Pahrump at No. 10 on outbound searches from Las Vegas.

"You see a lot of that in larger cities," Kolko said. "For Las Vegas, you see outbound searches to lower density areas, to Reno and Pahrump, from Los Angeles to San Bernardino and smaller suburban areas. Real estate tends to be even cheaper in those smaller density areas."

More than just a seasonal desire for warmer weather during winter months, nearly all of the top long-distance home searches coming from New York and Chicago at the end of the summer were to major metros in the South and Southwest, though not always the same areas, Trulia noted.

Chicagoans prefer homes in Nevada, Arizona and Texas, along with the Gulf Coast of Florida, while New Yorkers tend to flock to the Atlantic coast of Florida, including Miami, West Palm Beach and Fort Lauderdale. Las Vegas is No. 9 on the list of long-distance outbound searches from Chicago, and is not on the list from New York.

Although the data focuses on home searches and provides some insight into potential buyer intent, actual deals will depend on improvement in the job market, the willingness of banks to lend, and other economic factors, Kolko said.

"There are some jobs that are remote, that can be done anywhere, but most long-distance moves mean retirement or a new job," the economist said.

North Port-Bradenton-Sarasota, Fla., topped the Metro Movers Index at 6.03, or six times as many inbound than outbound searches.

On the other side, Washington, D.C.-Arlington, Va., showed the weakest housing demand with an index reading of 0.37, which means there were about three times more outbound than inbound searches.

"Homebuyers, sellers, real estate professionals and builders need to know which local markets will heat up and which will cool off.

Search behavior tells us where people want to move and can point to which markets will grow long before official population data tells us what happened," Kolko said.

The glut of vacant homes in Las Vegas -- a result of overbuilding and high mortgage delinquencies -- has made homeownership quite affordable and has become more of a draw than a deterrent for prospective homebuyers, Kolko said.

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