Las Vegas Region June Home Sales
Las Vegas-area home sales fell year-over-year for the first time in 12 months during June, when a sharp drop in sub-$200,000 sales, especially lender-owned properties, offset gains for more expensive homes. The combination of a 4.5-year low in foreclosure resales and a pick-up in mid-to high-end activity helped push the median sale price up from a year ago for the third consecutive month, to a 19-month high, a real estate information service reported.
In June, 4,423 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County). That was down 8.0 percent from 4,830 sales the month before and down 15.6 percent from 5,262 sales a year earlier, according to San Diego-based DataQuick. The firm tracks real estate trends nationally via public property records.
On average, sales have increased 8.6 percent between May and June since 1994, when DataQuick’s complete Las Vegas region statistics begin. This June’s sales were 16.0 percent below the average number of homes sold during all months of June since 1994, and were the lowest for that month since June 2008, when 3,829 homes sold.
June’s sales tally was below average because new-home sales remain extraordinarily weak – about 70 percent below average for the month of June. Resale activity was 11.8 percent above average for a June. However, the number of houses and condos that resold in June fell 7.8 percent from the prior month and declined 17.1 percent from a year earlier. Sales of newly built homes had been faring better this year than during the first half of 2011, rising on a year-over-year basis each month this year until June, when new-home sales dropped 2.0 percent compared with last year.
In the overall market in June, the higher price categories continued to post the largest year-over-year sales gains, while activity declined sharply in the lowest price segments. The total number of homes that sold for less than $100,000 fell 26.1 percent in June compared with a year earlier – a sign sub-$100,000 deals are getting harder to come by. The number of homes that sold for less than $200,000 declined 19.8 percent from a year earlier, while the number that sold above $300,000 rose 10.8 percent. The number of sales above $500,000 rose 35.9 percent compared with a year earlier. (The over-$500,000 market only accounts for about 2 percent of total sales).
Increased affordability from super-low mortgage rates and lower prices have spurred more demand in the mid- to higher-end markets this year. In the lower price ranges, demand among first-time buyers, investors and vacation-home buyers has been robust, and it has reportedly depleted the supply of homes on the market to the point where it’s limited the sales volume (i.e. if there were more homes on the market then sales would be higher). Why isn’t the supply of homes for sale rising to meet the demand? Many who would like to sell can’t because they owe more than their homes are worth. Other potential sellers are holding off on a move-up purchase because of uncertainty over the economy, or because they’re waiting for higher prices.
The median price paid for all new and resale houses and condos sold in the Las Vegas metro area in June was $125,000 – the highest since the median was $127,050 in November 2010. June’s median rose 2.5 percent from the prior month and rose 8.7 percent from a year earlier.
June was the fifth consecutive month to post a month-to-month gain in the median, and it was the third in a row with a year-over-year increase. Prior to this April, the median hadn’t risen year-over-year since June 2010. June’s 8.7 percent annual rise in the median was at least in part a reflection of the substantial drop in the share of all resales that were foreclosed properties, which tend to carry significant discounts and be concentrated in lower-cost areas.
The June median sale price remained 59.9 percent below the November 2006 peak of $312,000. In recent months the median has been rising off a cyclical low point of $110,000 this January – the lowest level since the median was also $110,000 in April 1994.
An alternative home-price gauge – the median paid per square foot for resale single-family detached houses – rose to $70 in June. That was up 2.9 percent from both the month before and a year earlier, marking the third consecutive month with a year-over-year gain. (This January’s $64 median per square foot was the lowest since at least 1994.) The June figure was 63.2 percent lower than the peak $190 paid per square foot in May and June 2006.
Absentee buyers – mainly investors and vacation-home buyers – purchased a near-record 50.8 percent of all Las Vegas-area homes sold in June. That compares with 48.9 percent the month before and 45.9 percent a year earlier. The peak was 51.2 percent this March. Absentee buyers paid a median $104,000 in June, up from $100,000 the prior month and up 10.6 percent from $94,000 a year earlier. Absentee buyers are those who indicated at the time of sale that the property tax bill will go to a different address.
In the first half of this year, 41.9 percent of all absentee buyers in the Las Vegas region were from Nevada, while 58.1 percent had mailing addresses outside of Nevada, according to public records. Topping the list of states where these out-of-state investors and second-home buyers came from were California (31.2 percent of all absentee buyers), Utah (2.4 percent), Hawaii (2.1 percent), Washington (1.9 percent) and Texas (1.8 percent). Absentee buyers from these top five states purchased 19 percent of all homes sold in the Las Vegas area during the first half of this year. Absentee buyers from California accounted for 15 percent of the region’s total home sales during that six-month period.
Cash buyers purchased 51.6 percent of the Las Vegas-area homes that sold in June. That was down from a cash-buyer share of 53.3 percent of total sales the month before and up from 50.6 percent a year earlier. The peak was 56.7 percent in February 2011. Cash purchases are where there is no sign of a corresponding purchase mortgage in the public record. June’s cash buyers paid a median $99,450, up from $95,000 the prior month and up 19.8 percent from $83,000 a year earlier.
Distressed property sales – the combination of foreclosure resales and “short sales” – continued to trend downward in June, representing 48.7 percent of the resale market. That’s down from about 52.6 percent the month before and 68.6 percent a year earlier.
Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 32.7 percent of Las Vegas resale activity in June – the lowest level since December 2007, when it was 31.3 percent. June’s figure was down from 38.9 percent the month before and 57.6 percent a year earlier. Foreclosure resales peaked at 73.7 percent of the resale market in April 2009.
Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 16.0 percent of the resale market in June. That compares with an estimated 13.7 percent the prior month and 11.0 percent a year ago.
In the wake of a new Nevada law that creates additional requirements for lenders trying to foreclose on properties, the number of notices of default (“NODs”) filed in Clark County has plummeted in recent months. In June, lenders filed 1,568 NODs, up 16.7 percent from the prior month and down 56.6 percent from 3,612 a year earlier. The notice of default is the first step in the formal foreclosure process.
Lenders foreclosed on 1,102 homes in the Las Vegas region in June, up 21.8 percent from the month before and down 70.0 percent from a year earlier. Between January and June this year, lenders foreclosed on 8,363 single-family house and condo units, down 57.0 percent from the same period last year.
A form of low-down-payment financing that’s popular with first-time home buyers – government-insured FHA loans – accounted for 35.4 percent of all home purchase loans in June. That was down from 40.6 percent the prior month and down from 41.6 percent a year earlier. June’s FHA level was the lowest since April 2008, when it was 31.9 percent. The current cycle’s peak for FHA use was 55.1 percent of all purchase loans in September 2008.
Las Vegas-Paradise, NV
Number of sales
Media calls: Andrew LePage (916) 456-7157
Copyright 2012 DataQuick. All rights reserved.