Las Vegas Now

SalesTraq
Copyright© 2010
(used with permission)

It is summertime in Las Vegas and everything is hot except the real estate market. July is traditionally a slow month for Las Vegas residential product and this year more than honored that tradition.

Sales slowed. Prices remained static. Inventory enjoyed a very uneven performance.

Here are the details:

SALES: New home sales which had surged in June to beat the Federal tax credit closing deadline slid back to May levels. Still, the total of 408 units sold exceeded last year’s level by 1.5%. In fact, in six out of the seven months of this year, new home sales have topped last year’s numbers. The positive: 2010 should be a slightly better sales year for new homes than last year. The negative: It is still a weak new home market.

Existing home sales — while maintaining a reasonable level — slid 16.9% from last month to 4,128. That’s also 19% below last year’s level. It still appears that existing home sales are poised to beat 2009 levels. However, it is worrisome to note that the last three months’ existing home sale totals have all failed to exceed corresponding months in 2009.

PRICES: While we cannot call residential prices stable, there has been some consistency.

The median price for an existing home sold in July was $120,000. That price is below both June (-2.4%) and the previous July (-1.6%). But, it is consistent with data over the last 16 months. In that period, the median price of an existing home has been bouncing between $115,000 and $126,000.

It is interesting to note that for the first time in four months, the median price of a short sale exceeded the median price of an REO sold. Monitoring the relationship between those two numbers can give us some indication of where we really are in the recovery process.

But, more importantly, the median price per square foot of an existing home sold in this market has been above 2009 levels for the last four months. The current median price per square foot of an existing home sold in July was $79.78.

The new home sector is somewhat more difficult to analyze because of the inclusion of 90 Hi-Rise closings at CityCenter. The median price of a new home jumped from a century low $182,440 in June to $210,000 in July. Obviously, that number and that change were influenced by the CityCenter closings.

The new home average price per square foot barely changed from June’s $101.51 to July’s $101.57. (Hi Rise closings are not included when calculating median price per square foot.)

Whole dollar pricing may not be giving us a true picture of the market. We may need to concentrate on price per square foot as a truer measure of pricing in the new home market.

INVENTORY: We called inventory uneven because three out of four major measures fell and one increased.

1. The number of new home subdivisions in the Las Vegas Valley fell to 219 – the lowest total in this century.

2. The number of new home permits in July slid to 364, a 14% drop from last month and a 19% drop from last year.

3. The 1,907 foreclosures in July were somewhat higher than June figures (+28%). Yet, that number was 19% below last July. In fact, five of the seven months in this year have seen lower foreclosure levels than corresponding months in 2009. Nonetheless, we believe that 2010 will very nearly mirror 2009 foreclosure totals.

4. The 13% rise of available listings in July to 12,772 is the first time this year that any month has been higher than its corresponding month in 2009. Yet, even at this figure, this inventory represents just 3.1 months of supply at current sales rates.

Unlike the bright sunny weather Las Vegas enjoys in the summer, July’s data was hazy and perhaps a little cloudy.

We’ll be looking more closely at these and other figures on October 21 at the next Crystal Ball. Mark the date. We’ll be sending you more information in the near future.

Respectfully submitted,

Larry Murphy and Steve Bottfeld
SalesTraq Marketing Solutions

REMINDER: This newsletter is copyrighted. No material may be reproduced in whole or part without prior written permission from the publisher. For those who wish to distribute this in whole or in part to client lists, significant discounts are available.