Las Vegas Sun

January 24, 2022

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Home prices drop to 2000 levels

The new-home market remained dismal in May, and existing-home sales reached their highest level since September 2005 as prices fell more, according to statistics released June 23 by SalesTraq.

The research firm said home prices dropped in May to what was the smallest month-to-month decline in a year — from $125,000 in April to $122,000 in May.

Whether that is an indication that prices are stabilizing remains to be seen. An expected wave of foreclosures could depress prices more, analysts said.

Dennis Smith, president of Home Builders Research, reported a median price of $130,000 in May, the same price as April, and the first month he hasn’t reported a decline in more than a year.

The last time the median price was that low was in December 2000, Smith said.

Sixty-four percent of the existing homes sold in May were foreclosures with a median price of $106,000. Repossessed homes sold for $115,000 in April, according to SalesTraq.

The number of home repossessions picked up in May after dipping the previous two months because of a moratorium by lenders. In May, 1,769 homes were repossessed, 480 more than April. Through May, 9,465 homes have been repossessed, 14 percent more than the first five months of 2008.

Median existing-home prices have fallen 58 percent since the peak of $289,500 in June 2006. The price per square foot in April was $77.41, 41 percent below the price of $131.80 in May 2008.

In May, 4,476 existing homes sold, about 600 more than April and 66 percent more than May 2006. Sales of existing homes are up 75 percent compared with last year.

SalesTraq’s statistics differ from the Greater Las Vegas Association of Realtors because SalesTraq monitors all home sales. The Realtors’ group only tracks sales of homes on the Multiple Listing Service.

Steve Bottfeld, executive vice president of Marketing Solutions, said the latest data tell him the market has reached its bottom because May was the third consecutive month that the number of foreclosures purchased exceeded foreclosures created. May also marked the 17th consecutive month of increasing existing-home sales, and inventory is at its lowest level in three years, he said.

The inventory of existing homes is declining rapidly. SalesTraq reported 13,667 existing homes were on the market in May. There were 16,202 in April and 19,155 in March.

SalesTraq reports a 4.3-month supply with the current sales trend and inventory. During the slowdown in sales in 2007, a 20-month supply of homes existed.

In May, 383 new homes sold, 25 more than April, but 56 percent less than the 870 sales in May 2008.

Through May, 1,846 new homes have sold. It is unlikely Las Vegas will surpass 5,000 sales for the year. In 2008, 9,965 homes sold, a sharp decline from the 38,755 sold in 2005 at the height of the new-home market.

Even price cuts aren’t moving sales. The new-home median price, which includes condominiums, was $211,489 in May, a decline of about $5,100 from April. The price per square foot was $106.59, a $5 per square foot drop from April. The price per square foot was $141.26 in May 2008.

SalesTraq reported 1.28 sales per subdivision in May, an increase from 1.15 in April. The number of subdivisions declined to 300 in May from 312 in April.

There is no evidence that builders will start adding to their supply — 298 permits were issued in May, 39 fewer than April. There were 619 permits issued in May 2008, SalesTraq reported.

Home Builders Research stats

The Las Vegas research firm reported 378 new-home sales and 1,873 since Jan. 1, a 62 percent decline compared with 2008. In May, 360 single-family homes, eight condominiums and 10 apartment conversions sold.

The firm puts the number of new-home permits at 308, an annual decline of 51 percent. Smith said he doesn’t expect the number of permits to increase, but said the totals per builder should go up, because there are fewer builders and those that remain should be starting more homes, he said.

Smith reported the median price of new homes at $212,990 in May, a year-to-year decline of $65,255 or 23.5 percent. Despite the drop, it’s still 37 percent higher than the price in May 2000, he said.

In May, Smith said 3,714 existing homes sold to bring the yearly total to 15,728, a 61 percent increase compared with 2008.

“This is an amazing statistic when we consider all the negativity that bombards the public daily,” Smith said.

Even if many of the sales are to investors, it still reduces inventory, he said.

Smith said the median price of existing homes in May was $130,000, the same as April.

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