Las Vegas Valley housing reports see steady prices, sales

Don’t expect the local housing market to make any surprise moves.

A trio of Wednesday reports showed steady prices and sales, plus a sustained investor presence and even potential overvaluation.

First, about those prices and sales. The median price of an existing single-family home in April was $212,568, the Greater Las Vegas Association of Realtors said. That was up 10.7 percent from $195,000 in April 2014, but a more modest increase of 3.7 percent from March’s $205,000. The condo and townhome median was $115,000, up 15 percent from $100,953 a year earlier and unchanged from March.

The median price is based on properties sold through the association’s Multiple Listing Service.

Sales agents sold 3,379 local units in April, a 5.1 percent jump from 3,215 closings a year ago and essentially flat from March.

Association President Keith Lynam called the market “stable,” and said economic growth should keep the market that way in coming quarters.

“We’ve got a ways to go. We have way too many vacant homes to call it a complete recovery,” Lynam said. “But the horizon looks good. We’ve got movement on the Strip, with the start of construction of Resorts World Las Vegas.”

The association’s numbers came out as two national reports made it clear the market hasn’t normalized.

First, a Wednesday heat map from credit-rating agency Fitch put Nevada in the “overvalued” camp with nine other, mostly Western states, including California, Arizona, Hawaii, Oregon and Idaho. The company’s analysis said the Las Vegas market was 14 percent overvalued in the first quarter, while Reno was 19 percent overvalued.

Las Vegas was listed among Fitch’s supply-driven markets, in which rising prices are driven more by the small number of homes on the market than by recovering demand. The company’s analysis also included trends in income, unemployment, rental rates, household formation and mortgage rates.

The Realtors association’s report said the city had less than three months of supply in April, compared with the six months of a more balanced market.

“Significant numbers of underwater mortgages remain, holding down supply, and demand has been bolstered by outside investors,” the report said.

A Wednesday report from California research firm RealtyTrac backed up Fitch’s note on investors.

Nevada ranked third in the nation in the first quarter for its share of single-family home flipping, in which homes were sold twice within a year. The study found that 6.4 percent of all single-family home sales statewide in the first three months of 2015 were flips. Only the District of Columbia, at 8.3 percent, and Florida, at 6.5 percent, had higher shares.

The national average was 4 percent.

Las Vegas ranked 12th among U.S. markets for home-flipping, at 6.3 percent. Reno placed ninth, at 6.7 percent.

Memphis, Tenn., was No. 1, at 10.6 percent.

RealtyTrac didn’t have local data on the percentage of flips sold to other investors rather than to traditional owner-occupiers. But its national numbers showed investors bought 34.7 percent of flipped homes, the highest share in four years.

Lynam disputed Fitch’s analysis, saying it’s difficult to put the numbers on a “unique” market that saw a $200,000 swing from peak to trough pricing.

He did agree that the market continues to lean on investors. That’s not always a problem, especially in the case of flippers, who often buy distressed properties at a discount, fix them up and resell them. It will be important in the long run for traditional owner-occupiers to return to the market, though, and Lynam said he expects that to happen in coming quarters as first-time buyers and boomerang buyers with prior defaults come into the market.

Lynam said he expects a mostly stable local market in the next 18 months to two years, with prices hovering at $200,000 to $210,000, and sales showing slow but steady gains.

“No one gets hurt, but no one gets a pocketful of money, and that’s kind of the way it should be,” he said.

Contact Jennifer Robison at jrobison@reviewjournal.com. Find her on Twitter @J_Robison1