Price of existing homes drops to ’98 levels

By Buck Wargo

Friday, May 22, 2009 | 3 a.m.

The price of an existing home in Las Vegas in April fell to its lowest level since 1998, but the decline generated the most sales since the peak of the market in June 2006, according to statistics released this week by SalesTraq.

The median price of existing homes fell nearly $10,000 in April to $125,000, a 57 percent drop from the peak of the market at $289,500 in June 2006. The average price per square foot was $78.58, a 42 percent drop from $135.73 in April 2008.

In April, 4,063 existing homes sold, 437 more than in March and 78 percent more than in April 2008, according to SalesTraq. That’s the most since 4,198 in June 2006.

Foreclosures are driving the price drop, and account for 62 percent of the sales in April. The median price of homes sold by lenders was $115,000, or $30,000 less than nonbank-owned home sales, SalesTraq reported.

The research firm reported the 1,289 home repossessions in April was the fewest in 16 months, and housing analyst Steve Bottfeld, executive vice president of Marketing Solutions, said that may bode well for a housing market recovery.

April was the third consecutive month that foreclosures dropped and second consecutive month in which foreclosure sales exceeded repossessions. In April foreclosure sales were nearly double the foreclosures created, Bottfeld said.

Although that’s good news for the market, Bottfeld tempered that by pointing out in March a self-imposed bank moratorium on foreclosures was lifted and the numbers will spike at the end of the second quarter and beginning of the third quarter.

“Two months of data do not make a trend, but the last two months’ data appear to represent significant change and new hope for a shorter negative cycle in Las Vegas,” Bottfeld said.

The number of homeowner defaults remain high as well and many analysts expect a spike in foreclosures that will further depress prices. Lenders supposedly have thousands of homes in inventory that they have yet to put on the market, analysts said.

SalesTraq reports the inventory of existing homes is 16,202, about 4,400 fewer than January and the lowest since April 2006. The market has a 5 1/2 month supply, the firm noted.

Existing-home sales continue to haunt the new-home market. In April 358 new homes sold, down 110 from March and 62 percent from April 2008. The new-home median closing price fell slightly to $216,581, but those prices have held steady for the past three months in what some analysts suggest may be the bottom. The average price per square foot was $111.42, down from $145.24 in April 2008.

Bottfeld said the numbers tell him that while new-home prices may be at or near the bottom, that is not the case for existing homes.

“I think the current numbers may be close to the bottom, but until we’ve seen the impact of the bank moratorium cessation at the end of this quarter or beginning of next quarter, there is no way to tell,” Bottfeld said.

April was the strongest month this year for building permits, but the 337 permits issued is tepid by historical standards.

The number of active subdivisions in Las Vegas was 312, well below the peak of 579 in July 2007. There were 1.15 sales per subdivision, the firm reported.