Las Vegas Region October Home Sales
The number of homes sold in the Las Vegas area fell below a year earlier for the fifth consecutive month in October as sub-$100,000 transactions continued to decline sharply and foreclosure resales dropped to the lowest level in more than five years. The median sale price held steady compared with September but rose year-over-year for the seventh consecutive month, a real estate information service reported.
In October, 4,570 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County). That was up 11.7 percent from the month before and down 0.7 percent from a year earlier, according to San Diego-based DataQuick. The firm tracks real estate trends nationally via public property records.
The region's sales typically fall slightly between September and October. On average, sales have declined 1.7 percent between those two months since 1994, when DataQuick’s complete Las Vegas area statistics begin. It's likely that this October's sales benefitted from three extra business days on which transactions could close when compared with September, which began and ended with a weekend.
This October's total sales were 0.5 percent above the average number of homes sold during all months of October since 1994. Resales of houses and condos combined were 27.6 percent above average for the month of October, while sales of newly built homes were 52.5 percent below average for the month. However, new-home sales have been on the rise, and increased nearly 55 percent in October compared with the same month last year.
In the overall market in October, sales of mid- to higher-cost homes continued to jump year-over-year, while low-end sales continued to fall. The total number of homes that sold for less than $100,000 fell 34.2 percent in October compared with a year earlier. Transactions below $200,000 declined 8.9 percent year-over-year, while the number of homes that sold above $300,000 rose 46.5 percent. The number of $500,000-plus sales rose 27.3 percent year-over-year. (The over-$500,000 market only accounts for about 2 percent of total sales).
Affordability-driven demand has been robust in the lower-priced markets, with first-time buyers, investors and some vacation-home buyers whittling down the available supply, thereby restricting the sales volume. Why aren't more people listing their homes for sale? Many who would like to sell can’t because they still owe more than their homes are worth. Other potential sellers are holding off on a move-up purchase because of uncertainty over jobs or 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 October was $137,000, which ties the September median as the highest since the median was $139,000 in June 2010. The October median was up 19.2 percent from a year earlier, compared with year-over-year gains of 19.1 percent in September, 18.2 percent in August, 12.1 percent in July, 8.7 percent in June, 4.3 percent in May, and 1.7 percent in April. Prior to April this year, the Las Vegas region median price fell year-over-year for 18 consecutive months.
The recent sharp gains in the median sale price are 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 rise in mid-to high-end deals also helps push up the overall median. Included in the latter trend is the increase in sales of newly built homes, which on average are more expensive than resale homes. In October, new homes accounted for 16.0 percent of all sales, up from 10.3 percent a year earlier.
The October median sale price remained 56.1 percent below the November 2006 peak of $312,000. 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 $75 in October. That was up 2.7 percent from September and up 13.6 percent from a year earlier, marking the fifth consecutive month with a year-over-year gain. (This January’s $64 median per square foot was the lowest since at least 1994.) The October figure was 60.6 percent lower than the peak $190 paid per square foot in May and June 2006.
The market impact of foreclosure resales continued to wane in October, while short sales claimed a larger share of the resale market.
Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 16.7 percent of Las Vegas resale activity in October – the lowest level since August 2007, when it was 14.6 percent. October's figure was down from 19.1 percent the month before and 52.8 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 43.2 percent of the Las Vegas-area resale market (houses and condos) in October. That compares with an estimated 42.5 percent the prior month and 23.4 percent a year earlier. The estimated short sale level has exceeded the foreclosure resale level for the past four months.
In the wake of an October 2011 Nevada law that created additional requirements for lenders trying to foreclose on properties, the number of notices of default (“NODs”) filed in Clark County has plummeted. However, this October saw a spike from very low levels the month before and a year earlier. In October, lenders filed NODs on 1,939 single-family houses and condo units, up 51.7 percent from the prior month and up 129.3 percent from a year earlier. Between January and October this year, lenders filed 14,282 NODs, down 65.7 percent from the same period last year. The notice of default is the first step in the formal foreclosure process.
October foreclosures also spiked month-to-month. Lenders foreclosed on 1,062 single-family homes and condo units in the Las Vegas region in October, up 59.0 percent from the month before and down 45.0 percent from a year earlier. Between January and October this year, lenders foreclosed on 11,751 homes, down 59.6 percent from the same period last year.
Many of these distressed homes are purchased by investors, whose activity remains near record levels.
Absentee buyers – mainly investors and vacation-home buyers – purchased 50.2 percent of all homes sold in the Las Vegas area in October. That was up from 48.5 percent the month before and up from 46.6 percent a year earlier. The peak was 51.2 percent this March. Absentee buyers paid a median $114,000 in October, up from $112,500 the prior month and up 26.7 percent from $90,000 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.
Cash buyers purchased 52.5 percent of the Las Vegas-area homes that sold in October. That was up from a cash-buyer share of 52.4 percent of total sales the month before and up from 49.3 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. Cash buyers paid a median $109,950 in October, up from $106,500 the prior month and up 30.9 percent from $84,000 a year earlier.
Home flipping has risen in recent months and has returned to levels not seen since the housing boom. In October, 6.6 percent of all homes sold on the open market had previously sold within a six-month period. That's up from a revised flipping rate of 6.5 percent the month before and 3.2 percent a year earlier. The October flipping rate of 6.6 percent (the same as in August this year), is the highest since it was 7.1 percent in January 2005.
Meanwhile, a form of low-down-payment financing that’s popular with first-time home buyers – government-insured FHA loans – accounted for 36.1 percent of all home purchase loans in October. That was up slightly from 35.2 percent the prior month and down from 38.2 percent a year earlier. In recent months the FHA share has hovered a bit above or below 35 percent of purchase loans, which is the lowest level since early 2008. The current housing cycle’s peak for FHA use was 55.1 percent of all purchase loans in September 2008.
Las Vegas-Paradise, NV
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