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January data suggests that Las Vegas’ new residential housing may have taken a slight step forward from last year.
—–>SALES: remained stable in the existing home sector;
—–>INVENTORY: continued to decline; and
—–>PRICES: remained relatively stable, with one critical new positive.
Beyond the $1.5 billion in aid for the five worst foreclosure states (including Nevada), one factor may help new home sales for the balance of 2010: New home sales exhibited the lowest average price per square foot in more than two years.
Here are the details:
SALES:
Existing home sales dropped by just over 1,000 units from the prior month.
While prices have languished between $120,000 and $125,000 since April 2009, for the first time since June, 2008, the number of bank-owned homes did NOT exceed the number of “regular” sales.
New homes started the New Year with a 9% jump over last January at 401. The figure was 61% less than December. Indeed, it was less than any figure in the last eleven months.
INVENTORY:
Existing home inventory increased 160 units in January to total 10,422. While that’s a 1.5% increase over December, it is a 47% decline from last year. More importantly, almost half that inventory (47%) is short-sale, another indication that banks are recognizing that short-sales result in smaller losses for them than foreclosures.
Banks repossessed 1,351 homes in January, about 43% less than last January. That figure puts them on pace for about 16,000 in 2010, less than what we saw in both 2008 and 2009. While these REO homes are selling, they are selling at bargain basement prices. That depresses pricing numbers.
If the REO figure continues at this level, it will keep existing home prices depressed at their current levels throughout the rest of this year.
The number of New Home Communities slipped to 229, one of the lowest totals since July 2007.
New home permits totaled 314. That’s a 72% increase over last January, but about average for monthly totals in 2009.
PRICE:
The median price of an existing home was $120,000 – about the same it has been since April of last year. However, 47% of the 3249 existing home closings this month were bank-owned homes with a median closing price of $115,000. The other 53% of existing home closings were non-bank owned homes with a median closing price of $125,000.
Bank-owned homes have colored pricing since June of 2008. The January numbers are the first indication that impact on pricing could be waning. But, as we have said so often before: one month does not make a trend.
The median price of a New Home was $201,515 – just 12.8% below last January and 9.7% below December.
The recent histories for both new and existing home suggest price stabilization. But, something else has occurred which could spur new home sales later this year.
The average price per square foot of a new home in January was $101.36 – the lowest level in more than two years. The average price per square foot of an existing home in January was $77.53 the highest level in more than three months.
The difference of $23.83 between the average price per square foot of a new and existing home is the smallest in nearly a year.
These numbers will be worth watching over the next few months.
We’ll have much more analysis on these numbers at our next Crystal Ball on April 21. Please save the date.
Respectfully submitted,
Larry Murphy Steve Bottfeld
