Las Vegas home prices continue to slide

Housing analyst Larry Murphy was hoping he was wrong when he said median existing home prices in Las Vegas could slide to $100,000 by year's end.

If prices continue to fall by nearly $10,000 a month as they did in April, they'll be there by the end of summer.

"I still don't think that'll happen," Murphy said Wednesday. "This is the second month that we saw more (bank-owned) dispositions than acquisitions. If this happens once more in May, I'm going to declare a trend. I'm going to say the end is in sight."

The median resale price dropped to $125,000 in April, down 45.3 percent from a year ago and the lowest level since 1998, the president of Las Vegas-based SalesTraq reported. It's 55 percent off the peak of $275,000 in February 2007.

Foreclosures, which accounted for 62 percent of April home sales, dragged the price down. Their median was $115,000, compared with a median of $145,000 for homes not owned by banks.

SalesTraq showed 2,521 dispositions, or sales of bank-owned homes, nearly twice the 1,289 acquisitions, leaving the foreclosure inventory at 14,722 in April.

New-home prices also fell, but not as sharply. Their median of $216,581 is down 26.6 percent from a year ago, but less than $2,500 lower than the previous month.

Home Builders Research reported 3,652 existing-home sales in April, a 62.5 percent increase from a year ago. New-home sales remained sluggish at 343 during the month, down 54.2 percent.

For the year to date, resale transactions are up 69 percent at 12,014 and could end up close to 40,000 by year-end, said Dennis Smith, president of Home Builders Research.

"The Las Vegas housing market is showing some signals that it is closer to the bottom than many other housing markets around the country," he said. "Now, if the job situation improves, we would really have something. Watch the job numbers. As always, they are the key to recovery."

There were 346 new-home permits issued in April, bringing the year-to-date total to 897, down 51 percent from a year ago, according to Home Builders Research.

Smith wouldn't say the new-home market is "out of the woods," but the first step to recovery is for the market to stop going down, which he thinks it has. Net sales per subdivision have improved for homebuilders, he said.

Robin Camacho of American Realty & Property Management said homes are selling in Las Vegas at bargain basement prices, including older fourplexes available for less than $28,000 a unit.

She's got two new homes on the east side for $79,990 each.

"This is the lowest price I've seen on a new home," she said. "I sold an older home -- a foreclosure -- with a pool, in need of rehabbing, in February for $32,000. I think some of the best values are hidden gems. For whatever reason, investors tend to flock to Summerlin, Green Valley and the southwest. They all tell me it's about location, location, location. I tell my investors it's about price, price, price. There are some incredible deals on homes that will cash-flow in areas investors tend to overlook."

Home values in Las Vegas will continue to fall, especially in the luxury market, broker Tom Love of Realty Executives said.

"It's simple economics," he said. "The supply of homes in Las Vegas far exceeds the demand for them. However, I feel that homes under $300,000 have less room for decline because their prices are already below building costs."

He anticipates a drastic increase in foreclosure inventory following the moratorium. The pipeline of homes in foreclosure is "busting at the seams," Love said.

SalesTraq's Murphy said there are two lines of thought on that. One is that lifting the moratorium will bring a new wave of foreclosures; the other is that President Obama's $350 billion housing rescue program is gaining traction.

"Who knows what's going to happen," Murphy said. "It's just phenomenal to see these prices of 1998. Take yourself back 11 years. I wish I could do that with my age."

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