Las Vegas Sun

December 3, 2016

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Firm predicts decline in Las Vegas home prices through next year

Las Vegas home prices will fall nearly 13 percent by September and another 6.5 percent a year later in 2012, a research firm estimated today.

The latest report by Fiserv, which produces the Case-Shiller Indexes, depicts a slightly better picture than its projections in November when it said Las Vegas home prices were projected to fall 16 percent by June and another 7 percent in 2012. Its projections for a decline are based from the end of the third quarter of 2009.

Fiserv said a large supply of foreclosed properties will continue to contribute to price declines in markets like Las Vegas.

The Wisconsin company calculates prices by what the same homes sold for in the past and not by comparing sales of what homes are sold in a particular month. That makes its forecast look bleaker than others, analysts said.

Nationally, prices are projected to decline by 5.5 percent between the third quarter of 2009 and September, but increase 2.1 percent by the third quarter of 2012.

In Reno, Fiserv estimated prices will fall 5.8 percent by September but increase by 4.1 percent in the third quarter of 2012.

Meanwhile, the share of homes bought by investors in December hit a record high as they took advantage of falling prices and a pool of properties under $100,000, according to a California-based real estate research firm.

Absentee buyers, which are mainly investors, purchased nearly 46 percent of all Las Vegas-area homes in December – the highest level in at least a decade, DataQuick Information Systems of San Diego reported.

That total is up from 40.3 percent of homes bought by absentee buyers in December 2009, the firm reported.

Buyers who used cash to purchase their homes accounted for nearly 51 percent of December’s sales, up from nearly 46 percent in December 2009, the firm reported.

The median price paid in those cash deals was $89,250, down from $100,000 in December 2009, DataQuick reported.

Sales of homes priced below $100,000 rose to 36.6 percent of all transactions in December, up from 32.6 percent in December 2009.

In a sign that first-time buyers aren’t as big of a factor in the market, government-insured FHA loans accounted for 42.2 percent of purchases, down from 47.8 percent in December 2009.

The median price paid per square foot for single-family existing homes dropped to $72 in December, the lowest since it was $72 in November 1996. That number is 62 percent below the peak of $190 paid per square foot in June 2006.

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