Las Vegas September Home Sales

Joining much of the West, Las Vegas bucked the seasonal norm and logged higher home sales in September than in August – something seen only three other times in 15 years. The median sale price held at $130,000 for the third consecutive month as foreclosures continued to gradually loosen their grip on the market, a real estate information service reported.

Last month 67.1 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 68.4 percent in August but up from 63.1 percent in September 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 5,014 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County) last month, up 6.3 percent from August and up 17.3 percent from a year earlier. It was the highest sales total for a September since September 2006, when 6,088 homes sold.

September was the 13th consecutive month in which total sales rose on a year-over-year basis.

September’s sales increase from August was unusual, given that on average sales have dropped 8 percent between those two months since 1994, when DataQuick’s complete Las Vegas-region statistics begin. Sales also rose in September over August in 2008, 2003 and 1997.

The August-to-September sales gain – which followed a relatively sharp and unusual drop in sales from July to August – is likely the result of three factors: Short sales have become more common, and they often take significantly longer to close escrow. That means some mid-summer deals that normally would have closed in August instead closed in September. The allure of historically low mortgage rates and buyers hoping to take advantage of the soon-to-expire federal tax credit for first-time buyers also help explain the relatively strong finish to the summer sales season.

The 3,608 single-family detached houses that resold last month marked the highest level for a September since 4,405 sold in September 2005. Sales for that home-type category have risen on a year-over-year basis for 18 consecutive months.

The 955 condos that resold last month also marked the highest level of sales for a September since 2005, when 1,030 sold. Resale condos have seen year-over-year sales gains for 15 consecutive months.

September sales of newly built homes remained at a record low for the month in DataQuick’s statistics, largely because builders can’t compete with discounted foreclosure resales. Last month’s 451 new-home sales fell slightly from 457 in August and were 50.6 percent below the 913 sold a year earlier. 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 $130,000, virtually unchanged from $129,990 in August and down 36.6 percent from $205,000 a year earlier.

The region’s all-home median sale price has fallen on a year-over-year basis for 29 consecutive months and in September 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 inched up to $136,900 in September, compared with $135,000 in August, but fell 30.6 percent from $197,400 a year earlier. The September resale house median stood 56.2 percent below the $312,250 peak in June 2006.

Another price gauge analysts watch rose slightly for the second consecutive month: The median paid per square foot for resale single-family detached houses was $77 in September, up from $76 in August but still 28.7 percent below a year earlier and 59.5 percent below the $190 peak reached in June 2006.

Monthly foreclosure counts continue to seesaw. After falling in August compared with July, the number of homes lost to foreclosure rose about 11 percent last month from August. In September, 3,162 houses and condos were foreclosed on in Clark County, up 7.9 percent from a year ago but 15 percent below the monthly peak of 3,718 in February this year. The figures are based on the number of trustees deeds filed with the county Recorder’s office. The document signals that a home designated as a house or condo was lost to foreclosure.

Many foreclosures are snapped up by investors and first-time buyers. In September, a popular form of financing used by first-time home buyers – government-insured FHA loans – accounted for 53.8 percent of all home purchases, up from 52 percent in August. Absentee buyers bought 40.4 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.

The use of adjustable-rate mortgages (“ARMs”) to buy homes remains extraordinarily low, falling to 1.5 percent of all purchase loans in September, down from 1.8 percent in August and 3.3 percent a year earlier. ARM use hit a record low 0.6 percent in March this year. The monthly ARM-use average this decade is 32 percent.

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	Sep-08	Sep-09	%Chng
Resale houses	2,921	3,608	23.50%
Resale condos	441	955	116.60%
New homes	913	451	-50.60%
All homes	4,275	5,014	17.30%

Median sale price	Sep-08	Sep-09	%Chng
Resale houses	$197,400	$136,900	-30.60%
Resale condos	$120,500	$68,000	-43.60%
New homes	$251,905	$210,450	-16.50%
All homes	$205,000	$130,000	-36.60%