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March may have come in like a lion in other areas of the country, but for the Las Vegas residential real estate world, it was like a lamb.

While Las Vegas’ March 13.3% unemployment may not be something to celebrate, it is the lowest mark since December 2009. The state reported a year over year employment increase for the first time in 39 months.

Unfortunately, first quarter residential housing statistics for the Las Vegas market contained little additional news that would suggest a recovery is imminent. Virtually every number that suggested change could be on the way was offset by a corresponding negative number.

For example, the number of existing home sales did jump (5.6%) to 5,114 in March, even as prices slid to their lowest totals in nearly two decades. But, significantly, more than seven out of ten of those sales were distressed properties. The 2,131 foreclosures sold at $106,500 represent 41.7% of the existing home sales. The 533 auction sales at $93,500 represent 10.4% of the sales. And, 929 short sales at $120,000 account for 18.2%. In short, existing home sales improvement was the product of distressed property. More than half were cash sales. Almost four out of five were vacant.

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New homes sales continued to lag behind last year. First quarter new home sales lagged last year by 41% at 781 total. The March tally of 279 sales was just 10 units above February and prices for new homes rose slightly to $195,950. (February was their lowest price point since 2002.)

While prices and sales are always major measures of a market’s potential, inventory is the most telling component. There were 2099 bank repossessions in March – the highest total since last April. Yet, the number of REO’s held by financial institutions continued its very slow decline, reaching its lowest point since last May (11,684).

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MLS inventory remained stable at 14,269 with roughly half of those homes listed as short sales. The number of new home subdivisions was also stable at 239, and the number of closings per subdivision averaged just over one per month.

Are these numbers likely to change? If so when, and what has to happen to make them change? Answers to those and other questions will be discussed at Crystal Ball this Thursday, April 21, at the Alexis Park Resort (375 E. Harmon). Speakers include Mayor Oscar Goodman, Frank Wyatt, president of the Southern Nevada Homebuilders Association and Larry Murphy, president of SalesTraq. There will be a question and answer period following the presentations.

You may pre-register for $29 on line at http://www.crystalballseminars.com/nev ($39 at the door) Each attendee will receive a complimentary copy of the SalesTraq Q1 Las Vegas Housing Summary, a $125 value.

Hope to see you there

Respectfully submitted,

Steve Bottfeld, Marketing Solutions

Larry Murphy, SalesTraq™

©SalesTraq 2011

There’s an old expression: “There’s light at the end of the tunnel.” People forget that sometimes that light could be an oncoming train.

For those who hoped Las Vegas would enjoy a speedy housing recovery, February data will come as a major disappointment. Nearly every facet of the residential market is at or near a bottom.

Perhaps the most damaging statistic is this: Just one out of every five existing homes sold in the month of February (22.5%) was non-distressed. The balance consisted of short sales (21.7%), auction sales (10.3%) and foreclosures (45.5%). Financial institutions repossessed a total of 943 homes in February. While that number is considerably lower than January’s, it is still 5% above last year.

The median price of an existing home rose slightly ($1,000) over January, but is still a depressing $110,000 – about the same pricing level the market experienced in the early 1990’s.

New home pricing dropped to a nine year low at $188,900 – a figure not seen since November 2002.

The number of new home subdivisions continued its slow rise in February to 236, one more than last month. Not surprisingly, sales of new homes were better in February than they were in January … but, again, not by much. The 269 unit total was 22.3% below last year. Note that January had the lowest average sales per subdivision in this century. February was only a slight improvement at 1.14 units.

Perhaps the most surprising statistic was that existing home inventory slid nearly 1,000 units from January’s 15,334 to 14,401 in February. In our view, that decline may have been caused by people taking their homes off the market until prices improve.

More than half of the homes listed on the MLS (52%) are identified as short sales. The inventory of foreclosed homes held by financial institutions also dropped slightly from January’s 12,420 to 11,716 in February. The positive here is that the inventory of foreclosed homes has decreased steadily since June. The negative is that the decrease is just 12.4% over that time period.

These statistics suggest attendance at the April 21 Crystal Ball Seminar at the Alexis Park hotel might be a very good idea. Called “Survival Strategies in Today’s Housing Market,” featured speakers include Mayor Oscar Goodman, SNHBA president and president of Pinnacle homes Frank Wyatt and Larry Murphy, president of SalesTraq. To register on line go to www.crystalballseminars.com.

The key to success is knowledge. Unfortunately, we do not find these numbers encouraging. But, this is the reality we have to deal with. Now is the time to review your survival strategies. Hope to see you on April 21st.

Respectfully submitted,

Larry Murphy, SalesTraq™
Steve Bottfeld, Marketing Solutions
©SalesTraq 2011

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A few key points to consider in February’s numbers—

1. Inventory dipped below 15,000 units for the first time since September 2010. And the decrease in total inventory by over 500 units is quite significant when compared to the past year……even longer.

2. Total pendings increased for the second straight month after 8 months of declines. This may be evidence of the seasonal adjustment that we experience every year during the March through July months or maybe it is a sign of something greater. We will monitor this in the coming months.

3. Closings are up 10% versus last year at this same time. Remember, last year had the benefit of the homebuyer tax credit to fuel sales. The fact that closed units are up versus this same time last year, and there is no tax credit inflating those numbers is a good sign.

4. Cash transactions are still increasing—53% of all closed units last month. Wow! Investors are running wild. Smart money is on the loose. The positive cash flow opportunities in the Las Vegas real estate market are being noticed worldwide. And, they are being acted upon.

5. 85% of all closed units in the month were priced under $200,000. And only 44 total closings were priced over $500,000. I just searched for the number of listings currently on the market in Las Vegas, priced over $500,000. There are 878….or 20 months of inventory. Ouch! This is a pretty good sign that the luxury home market may see further downward pressure on pricing.

Finally, and unrelated to the numbers, last month, two clients unexpectedly received letters from a major lender that was their first lien holder at the time of their approved (but deficiency not waived) and ultimately, closed short sale. The letter basically stated that the lender had good news for them. The lender was announcing in the letter that they were not going to pursue the deficiency—that they were releasing the client from all future claims. Why is this happening? Single action State? Lender receiving economic incentive for doing so? I don’t know. I am asking you. If you know (I know you do, Steve), or if you have ideas, please share. Very interested.

Until next month………….be well.

Regards,

David

First, REO inventory declined in January to just over 3,000 units after climbing each of the previous 10 months. And, as could be expected, REO pendings also increased by about the same amount as inventory declined. Short sale pendings increased—first time in 9 months. And finally, overall pendings increased—also for the first time in 9 months. Signs that sales activity is not declining, but may be gaining momentum. We shall see.

Second, REOs only makeup 19.79% of the available inventory in Las Vegas. Short sales still dominate the landscape with over 50% market share of the available inventory. As we have been reporting, inventory is very stable—only increased a few units from the previous month.

January Las Vegas real estate stats

Closed units were down from the same time last year, but only by 2%. Another good sign. We will truly begin to see the impact that the tax credit had on sales during the first half of last year as we compare it to these next few months of 2011.

January Las Vegas real estate Pie

January Las Vegas real estate graph

Finally, and as you may have seen in Hubble’s excellent article from earlier this week, cash transactions finally crossed the 50% of total sales mark. Cash sales make up more than all other types combined. Wow. What will these investors’ exit strategies do to the future recovery? Not much being said about that to this point. But, it will certainly have an impact on the timing of the turnaround and at what pace prices will climb once they begin doing so.

Have a great month!

David Brownell

Broker-Salesperson

Las Vegas, Nevada

Happy New Year! Well…..another year of living the Las Vegas real estate dream has come to a close. And, we’re all still here. At a minimum, let’s raise our glasses to that fact. That alone speaks volumes. So………..Cheers!

2010 was a year without a lot of surprises. Things stayed pretty constant throughout. Those who projected the beginning of a turnaround (was there anyone who took that side?) were left to grasp a few glimmers of hope that came to pass and those who warned of another year of further crashes throughout the market – the Gloom and Doomers – were also off the mark.

The home buyer tax credit, which many worried was artificially propping up an otherwise much worse market, came to an end. And while we agree that we did see a slowdown in closed units in the months that followed, certainly, those numbers did not dip to the lows that were being presented at that time.

Hopefully, the 2011 Las Vegas real estate market will begin to show signs of a turnaround. However, I believe that we will probably see another year very similar to 2010. Of course, massive job creation or a spike in interest rates could move the pendulum in either direction, and quickly.

Here’s what I noticed as I reviewed the end of year statistics as well as each month’s numbers throughout the year:

1. Inventory is climbing. December was the first time that available inventory had declined since April, but it is up 50% from the same time in 2009. REO and Short Sale inventory climbed 58% and 68% respectively over that same period. The available inventory is showing signs of stabilization. From August through December, the available inventory has remained between 14,119 on the low end to 15,353 at the upper end.

2. Contingent and Pending properties are down. Since April, this number has been trending downward, from 16,193 in April to 10,849 in December—a 33% decrease. For the year, the number of contingent and pending properties is down 17%.

3. They’re baaaaacck. The next wave of REOs may be upon us. In December, there were 1,880 REO closings—the highest number since March 2010. We shall see.

4. Final Short Sale numbers proved us wrong. Earlier in the year, I predicted that Short Sales would pass REOs as the largest portion of closed units in a given month. They got close, but did not quite make it. In June, REO closings were 38% of the closed units for the month and Short Sales were over 34%. However, the spread started moving back the other way in July, and at the end of the year, REOs were back to 50% of the closed units and Short Sales had declined to 26%.

5. There is one other thing to note about Short Sales in 2010. While the general perception is that Short Sale successes are on the rise, a closer look at the numbers shows this is just not the case. Overall, Short Sales are successful between 8 – 12 % of the time, or 1 out of every 8 – 12 Short Sales actually closes. This statistic has remained pretty consistent over more than just these past 12 months. Many theories abound. I will save that for another discussion.

6. Finally, distressed sales (REO and Short Sale) continue to dominate the market. They comprised 77% of the closed units in December 2010. This number has been as high or higher for some time. With the number of homeowners underwater at around 80% and Las Vegas having the highest percentage of distressed assets in the United States, look for things to remain the same for awhile. The turnaround everyone is looking for may still be a few years away.

Thanks for your continued support and readership. I really enjoy sharing every month. And again, Happy New Year!

David

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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.

Here is an excerpt from guest author Brad Malkin, briefly discussing several key points in the Market;

Last Week; a slight increase in long term interest rates, but the larger jump in rates was at the short to middle of the curve. In the wider perspective the rate markets are relatively calm, the drivers last week were the continuing concerns over sovereign debt problem in Greece and concerns other European countries may suffer the same fate, having to cut spending more than possible to avoid defaulting on its debt payments. Not just Greece, Ireland, Spain, Portugal and Italy are struggling with the same problems; so far however they haven’t slid to the level of Greece’s debts. The EU and IMF eventually will step up and keep Greece from defaulting but the path to there from here is filled with daily fears that keep investors worried. Last week the housing data was for March surprised, especially new home sales that jumped 27% with upward revisions for Jan and Feb; the homebuyers tax credit driving buyers to new homes and less to existing homes which were still strong at +6.8%.

This week; two points to focus on. Starting Monday afternoon Treasury will be busy borrowing; $11B 5 yr inflation indexed notes will be auctioned on Monday. Treasury will hit the borrowing window Tuesday with $44B of 2 yr notes, Wednesday for $42B of 5 yr notes and Thursday $32B of 7 yr notes. The borrowing is expected to be well bid by investors but will keep a lid on any rallies in the treasury markets until at least mid-week after the demand for the early auctions are measured. The other key focus this week; the FOMC meeting beginning on Tuesday and concluding Wednesday afternoon with that policy statement that is sliced and diced for clues as to its meaning for future rates. One discussion will center on the Fed’s balance sheet that has ballooned to over $2T; there were a number of FOMC and Fed officials past and present that want the Fed to begin selling those assets, key to the asset sales is the $1.25T of MBSs the Fed bought in the past year. Although we do not expect the Fed would sell MBSs at amounts that would drive mortgage rates higher, how the debate goes will be interesting; problem is we won’t know much about it until the FOMC minutes are released in three weeks. Rate markets this week will likely be under a little pressure all week with supply and continual improvement in the equity markets.

Brad Malkin | Vice President of Sales

7830 West Sahara Avenue | Las Vegas, NV 89117

Cell (702) 279-9111 | Fax (702) 410-2895

Brad.Malkin@GoSouthernFidelity.com | www.GoSouthernFidelity.com

Local home sales up, prices down

By HUBBLE SMITH
LAS VEGAS REVIEW-JOURNAL

Existing-home sales in Las Vegas increased 4.5 percent in February and median prices fell 12.8 percent from the same month a year ago, the Greater Las Vegas Association of Realtors reported.

February’s 2,390 single-family home sales are “fairly solid” for what is traditionally a slow time of the year, Realtors association president Rick Shelton said Tuesday.

Nearly half of those sales were cash-only transactions, suggesting a return of heavy investor activity in Las Vegas. The median price was $135,694, up 0.6 percent from $134,925 the previous month….

(to finish reading click here; Las Vegas Review Journal; Las Vegas Real Estate )

Here is the link for the Home Buyer Tax Credit 2010.

As the deadline approaches, we are getting more and more interest in this tax credit. Don’t miss out on this one! The link above leads to the IRS website so you can read what they have to say about it. If you have additional questions, feel free to contact us. There is a lot of misinformation out there so be careful. That is why I linked directly to the source; The IRS

If you would like another source of information, I suggest Brad Malkin of Prospect Mortgage. Brad is extremely knowledgeable on all the ins-and-outs of this credit.

Once again, by popular request, Larry Murphy and Steve Bottfeld offer their vast insight and expertise into the Las Vegas Real Estate Market. If you don’t yet subscribe to their site yet you really should, and if you haven’t yet attended one of their Crystal Ball seminars, you have missed a priceless real estate resource. Check it out; Crystal Ball seminars

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