Las Vegas August Home Sales

Mirroring a trend seen across the West, the Las Vegas area posted a relatively sharp decline in August home sales compared with July, in part because of a waning inventory of lower-cost foreclosure properties for sale. The median sale price held steady month-to-month as foreclosure resales tapered off a bit and the distribution of sales across the price spectrum changed little from July, a real estate information service reported.

Last month 68.4 percent of the Las Vegas-area houses and condos that resold were foreclosure resales, meaning those homes had been foreclosed on in the prior 12 months. That was down from 69.7 percent in July but up from 63.2 percent in August 2008. Foreclosure resales peaked in April this year at 73.7 percent of total resales, according to MDA DataQuick of San Diego. The firm tracks real estate trends nationally via public property records.

A total of 4,716 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County) last month, down a record 11.2 percent from July but up 16.5 percent from a year ago.

August marked the 12th consecutive month in which sales have risen on a year-over-year basis.

The decline in sales between July and August is the sharpest in DataQuick’s complete Las Vegas region statistics, which begin in 1994. The average change in sales between in July and August has been a gain of 6 percent, with sales rising between those two months in 12 out of the past 16 years.

Sales of existing single-family detached houses have risen on a year-over-year basis for 17 consecutive months, though last month’s annual gain was the lowest for any month in more than a year. Still, the 3,367 single-family house resales last month were the highest for any August since 4,848 sold in August 2005. Resale condos have seen an annual sales gain for 15 straight months and in August sales were the highest for that month since 2005.

August sales of newly built homes remained at a record low for the month, largely because builders can’t compete with discounted foreclosure resales. Last month’s 457 new-home sales rose 6.3 percent from July but fell 42.9 percent below a year ago and 77 percent below the average number sold in that month since 1994. The lowest month for new-home escrow closings was January 2009, when 249 sold.

The median price paid for all new and resale houses and condos sold in the Las Vegas metro area last month was $129,990, down insignificantly from $130,000 in July and down 39.5 percent from $215,000 a year ago.

The region’s all-home median sale price has fallen on a year-over-year basis for 28 consecutive months and in August stood 58.3 percent below the region’s peak $312,000 overall median in November 2006. Last month’s overall median was the lowest since it was $129,000 in April 1999.

The median price paid for resale single-family detached houses – by far the region’s largest home-type category – is one of the best gauges of overall price trends. That median fell to $135,000 in August, down a hair from $135,100 in July and down 35.8 percent from $210,205 a year ago. The August resale house median was 56.8 percent below the $312,250 peak in June 2006.

Another price gauge analysts watch rose very slightly in August after flattening out earlier in the year and then dipping in July: The median paid per square foot for resale single-family detached houses inched up to $76 in August, up from $75 in July but still 31.5 percent below a year ago and 60 percent below the $190 peak reached in June 2006.

Foreclosures will remain a significant force – mainly in terms of exerting downward pressure on prices – in the Las Vegas housing market for months to come, but they trended lower in August. Last month 2,860 houses and condos were lost to foreclosure in Clark County, down 22.3 percent from July and down 14.1 percent from a year ago. The figures are based on the number of trustees deeds filed with the county recorder’s office. The document signals that a home was lost to foreclosure.

Investors and first-time buyers have been key to burning through the Las Vegas region’s foreclosure inventory.

In August, a popular form of financing used by first-time home buyers – government-insured FHA loans – accounted for 52 percent of all purchases, roughly the same as a revised 52.2 percent in July. Absentee buyers bought 40.2 percent of all Las Vegas–area homes last month – the highest figure for any month this decade. Absentee buyers are often investors, but could include second-home buyers and others who, for various reasons, indicate at the time of sale that the property tax bill will be sent to a different address.

Of all buyers, those using cash to purchase their homes accounted for about 45 percent of all sales in August, based on an analysis of public property records. Specifically, these were transactions where there was no indication of a purchase mortgage recorded at the time of sale. Some of these “cash” buyers could have used alternative financing arrangements outside of a typical purchase mortgage, and in some cases these buyers might be taking out mortgages after the purchase. All-cash deals have become popular in many Western markets where prices have dropped sharply and sellers favor the relative speed and certainty of all-cash buyers.

The use of adjustable-rate mortgages (“ARMs”) to buy homes edged up from July but remained near a record low, representing 1.8 percent of all purchase loans in August. That’s up from 1.1 percent in July but down from 4.9 percent a year earlier and down from a monthly ARM-use average of 32 percent this decade.

Across the West, year-over-year declines in the median sale price - the point where half of the homes sold for more and half for less – have sometimes overstated the extent to which the value of the typical home has fallen. It’s because the median is being tugged lower not just by price depreciation but by shifts in the types of homes selling. For example, more of today's sales involve foreclosures, which tend to sell at a discount and be concentrated in more affordable areas. Also, the August 2007 credit crunch made larger "jumbo" mortgages more expensive and harder to obtain, which has led to sluggish sales – in some cases the lowest in many years – in higher-priced communities. (A dropoff in high-end sales can pull down the median.)

Las Vegas-Paradise, NV MSA

Number of sales	Aug-08	Aug-09	%Chng
Resale houses	2,809	3,367	19.90%
Resale condos	438	892	103.70%
New homes	801	457	-42.90%
All homes	4,048	4,716	16.50%

Median sale price	Aug-08	Aug-09	%Chng
Resale houses	$210,205	$135,000	-35.80%
Resale condos	$125,000	$67,500	-46.00%
New homes	$254,978	$213,004	-16.50%
All homes	$215,000	$129,990	-39.50%