Home prices drop to less than half 2006 peak

By Buck Wargo

Friday, March 13, 2009 | 2 a.m.

Las Vegas home sales edged up slightly in February, but nothing seems to stop falling prices, which have dropped 50 percent from their peak.

The Greater Las Vegas Association of Realtors reported this week that the median home price fell 2.7 percent in February to $155,603. That’s down from $160,000 in January and 37 percent from February 2008.

The $155,603 price marks a 50.6 percent decline from the market’s peak in June 2006 when the median price was $315,000, according to the Realtors’ group. The organization tracks only single-family homes sales on the Multiple Listing Service.

Based on the new listings in February, it appears prices will continue to decline. The median price of the new listings was $160,000, which is an 8.5 percent decline from $174,900 in January.

In February 2,268 home sold, a 2.9 percent increase over January. The drop in prices continues to spark interest in the housing market since sales are up 108 percent from the 1,098 in February 2008.

Despite the increase in sales, that mark is nowhere close to the market’s peak when 3,552 homes sold in June 2004.

“These statistics are in line with trends we’ve seen over the past year or so,” the Realtor group’s president, Sue Naumann, said. “It’s encouraging to see more homes selling each month, but we know declining prices are driving these increasing sales.”

Bank-owned properties account for at least three out of every four sales and those foreclosures continue to force home prices to fall, she said.

Naumann said federal incentives recently enacted or announced by President Barack Obama can only help the local housing market. There is an $8,000 tax credit for first-time buyers, but it would help housing more if it was available to all buyers, she said.

“Our members are hopeful that federal efforts to curb foreclosures and help people buy homes will offer at least some help here,” Naumann said.

Dennis Smith, president of Home Builders Research, said it’s best to look at the glass as half full when it comes to the housing market. Although prices are still falling, there would be bigger concern if sales were dropping as well. Given the affordability in the market, sales should continue to increase, and ultimately prices will stabilize as the inventory lowers, he said. The question is when that will happen.

“As people start believing in government responses, sales are going to move higher,” Smith said. “Confidence is the key to people buying more houses.”

The number of sales of contingent and pending units increased by 183 homes during the past week, reaching a total of 8,129 units, according to Applied Analysis. Compared to the same week a year ago, contingent and pending units have doubled from 4,045 units.

That number of contracted units is at the highest reported level since the market correction began more than two years ago, according to Applied Analysis. Contingent units reflect properties that have been contracted but are awaiting some action to take place. Forty-six percent of the 4,824 contingent units are identified as short sales.

The supply of homes on the market edged up 1 percent in February to 22,142. Despite that increase, inventory is 1.6 percent below where it was in February 2008, according to the Realtors’ group.

In February, there were fewer new listings, 4,954, down 1 percent from January. The average price of the new listings was $184,193, a 1.3 percent decline from January, the group reported.

Owner-occupied homes represented 28.8 percent of all homes listed for sale, while tenant-occupied and vacant properties represented 71.2 percent of inventory, according to Applied Analysis. About 33 percent (6,920) of homes listed for sale were identified as repossessions or were bank-owned.

In the condo and town house market, the 442 sales were 0.5 percent higher than in January and 166 percent greater than February 2008, the Realtors reported.

But prices of condos sold on the Multiple Listing Service continued to decline. The median price was $75,000, a 6.3 percent drop from the $80,000 price in January. That’s a 50 percent drop since February 2008.

There were 1,204 new listings of condos and town houses in February with a median price of $94,400, a 5.5 percent decline from January when the median price was $99,900. There are 5,686 condos and town homes on the market, up 3 percent from January. Their median list price is $105,150 and the average price is $222,899.