Las Vegas home sales down 26.5 percent in October

Las Vegas home sales dropped 26.5 percent in October from a year ago and inventory climbed 7.5 percent, an indication that the final quarter of the year may be more sluggish than usual for the local housing market.

The Greater Las Vegas Association of Realtors reported 2,599 single-family residential sales in October, compared with 3,535 in the same month a year ago. The number of homes on the Multiple Listing Service grew to 22,570 from 20,998 a year ago.

Fewer homes were sold in October than September every year since 2005, Realtors association President Rick Shelton said.

"We can also expect less activity in the coming months as we head into what is traditionally our slowest season for home sales," he said.

The median home price slipped to $133,000 in October, down 1.5 percent from September and down 4.4 percent from October 2009, the association reported.

Realtors sold 786 condominiums and townhomes during the month at a median price of $65,000, a decrease of 7.5 percent and 7.1 percent, respectively, from a year ago.

About 28 percent of all existing home sales in October were short sales, or lender-approved sales for less than the principal mortgage balance, down from a peak of 34 percent in June. Foreclosures accounted for 42 percent of October sales.

Housing analyst Larry Murphy of Las Vegas-based SalesTraq said recovery in the housing market will be prolonged by stagnant population growth in Clark County.

"Think about it. If population growth is zero, then the demand for new housing units is also zero," he said. "OK, it's slightly higher than zero because some housing units will be demolished or destroyed by fire."

Home builders produced about 12,000 new homes in 1990, when Las Vegas had a population of 770,000 and was growing at 5.4 percent annually. New-home production increased to roughly 21,000 in 2000, with a population of 1.4 million. With a static population of nearly 2 million in 2010, no new homes are needed, Murphy said.

The percentage of homes purchased with cash rose to an all-time high of 46.5 percent in October, the Realtors association reported.

Shelton said he's not aware of any major city in the nation with such a high percentage of cash buyers over an extended period of time.

"This speaks volumes about our housing market and how well-funded buyers believe that prices will eventually appreciate," he said.

The number of available properties listed for sale without any pending or contingent offer also increased in October to 12,379 single-family homes, a 4.1 percent increase from September and 53.3 percent increase from a year ago.

Frank Nason of Residential Resources said October's 26 percent year-over-year decline in sales is the worst of seven consecutive monthly declines.

"I was really shocked, to tell you the truth," he said. "Not good, especially considering the historical low interest rates, incredible deflationary efforts by the Federal Reserve and no oversight of Fannie Mae and Freddie Mac that just keep producing mind-boggling losses."

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