Las Vegas Region July Home Sales
The number of homes sold in the Las Vegas-area fell year-over-year for the second consecutive month in July as low-end sales continued to drop and foreclosure resales dipped to the lowest level since November 2007. The share of homes sold to in- and out-of-state absentee buyers hovered near a record high, while the combination of more mid-to high-end transactions and fewer foreclosure resales helped the median sale price rise year-over-year for the fourth consecutive month, a real estate information service reported.
In July, 4,280 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County). That was down 4.7 percent from the month before and down 5.6 percent from a year earlier, according to San Diego-based DataQuick. The firm tracks real estate trends nationally via public property records.
On average, sales have declined 8.2 percent between June and July since 1994, when DataQuick’s complete Las Vegas region statistics begin. This July’s sales were 11.6 percent below the average number of homes sold during all months of July since 1994, and were the lowest for that month since July 2008, when 4,134 homes sold.
July’s sales tally was below average because new-home sales remained extraordinarily weak – about 63 percent below average for the month of July. Resale activity was 12.4 percent above average for a July. However, the number of houses and condos that resold in July fell 6.3 percent from the prior month and declined 8.7 percent from a year earlier. Though low in an historical context, sales of newly built homes in July rose nearly 21 percent on a year-over-year basis.
In the overall market in July, the higher price categories continued to post the largest year-over-year sales gains, while activity declined sharply in the lowest price segments. The total number of homes that sold for less than $100,000 fell 23.8 percent in July compared with a year earlier. The number of homes that sold for less than $200,000 declined 11.3 percent from a year earlier, while the number that sold above $300,000 rose 24.6 percent. The number of sales above $500,000 rose 34.8 percent compared with a year earlier. (The over-$500,000 market only accounts for about 2 percent of total sales).
Increased affordability thanks to super-low mortgage rates and years of price declines has spurred more demand in the mid- to higher-end markets this year. In the lower price ranges, demand among first-time buyers, investors and vacation-home buyers has been robust, reducing the supply of homes on the market to the point where it has hampered sales (i.e. if there were more homes listed then the sales volume would be higher). Why isn’t inventory rising to meet the demand? Many who would like to sell can’t because they owe more than their homes are worth. Other potential sellers are holding off on a move-up purchase because of uncertainty over the economy, or because they’re waiting for higher prices.
The median price paid for all new and resale houses and condos sold in the Las Vegas metro area in July was $128,800 – the highest since the median was $130,000 in September 2010. July’s median rose 3.1 percent from the prior month and rose 12.1 percent from a year earlier.
July was the sixth consecutive month to post a month-to-month gain in the median, and it was the fourth in a row with a year-over-year increase. Prior to this April, the median hadn’t risen year-over-year since June 2010. July’s 12.1 percent annual rise in the median was at least in part a reflection of the substantial drop in the share of all resales that were foreclosed properties, which tend to carry significant discounts and be concentrated in lower-cost areas. The pickup in mid-to high-end deals also helps push the median higher.
The July median sale price remained 58.7 percent below the November 2006 peak of $312,000. In recent months the median has been rising off a cyclical low point of $110,000 this January – the lowest level since the median was also $110,000 in April 1994.
An alternative home-price gauge – the median paid per square foot for resale single-family detached houses – rose again to $71 in July. That was up 2.9 percent from the month before and up 6.0 percent from a year earlier, marking the second consecutive month with a year-over-year gain. (This January’s $64 median per square foot was the lowest since at least 1994.) The July figure was 62.7 percent lower than the peak $190 paid per square foot in May and June 2006.
Distressed property sales – the combination of foreclosure resales and “short sales” – continued to trend downward in July, representing 43.5 percent of the resale market. That’s down from 48.6 percent the month before and 70.6 percent a year earlier.
Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 25.8 percent of Las Vegas resale activity in July – the lowest level since November 2007, when it was 24.8 percent. July’s figure was down from 32.6 percent the month before and 59.5 percent a year earlier. Foreclosure resales peaked at 73.7 percent of the resale market in April 2009.
Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 17.7 percent of the resale market in July. That compares with an estimated 16.0 percent the prior month and 11.1 percent a year ago.
Absentee buyers – mainly investors and vacation-home buyers – purchased a near-record 51.0 percent of all Las Vegas-area homes sold in July. That was the same as the month before and up from 46.5 percent a year earlier. The peak was 51.2 percent this March. Absentee buyers paid a median $108,000 in July, up from $104,000 the prior month and up 16.1 percent from $93,050 a year earlier. Absentee buyers are those who indicated at the time of sale that the property tax bill will go to a different address.
In July, 46.5 percent of all absentee buyers in the Las Vegas region were from Nevada, while 53.5 percent had mailing addresses outside of Nevada, according to public records. Topping the list of states where these out-of-state investors and second-home buyers came from were California (29.4 percent of all absentee buyers), Arizona (2.4 percent), Colorado (1.9 percent), and Utah (1.7 percent). All out-of-state buyers combined purchased 26.5 percent of all homes sold in the Las Vegas area in July. Absentee buyers from California accounted for nearly 15 percent of the region’s total home sales in July.
Cash buyers purchased 53.5 percent of the Las Vegas-area homes that sold in July. That was up from a cash-buyer share of 51.4 percent of total sales the month before and up from 53.0 percent a year earlier. The peak was 56.7 percent in February 2011. Cash purchases are where there is no sign of a corresponding purchase mortgage in the public record. July’s cash buyers paid a median $104,500, up from $99,000 the prior month and up 22.6 percent from $85,243 a year earlier.
Meanwhile, foreclosure activity remains far below last year’s level.
In the wake of a 2011 Nevada law that creates additional requirements for lenders trying to foreclose on properties, the number of notices of default (“NODs”) filed in Clark County has plummeted. In July, lenders filed 1,618 NODs, up 3.1 percent from the prior month and down 52.4 percent from 3,402 a year earlier. The notice of default is the first step in the formal foreclosure process.
Lenders foreclosed on 864 homes in the Las Vegas region in July, down 21.7 percent from the month before and down 72.7 percent from a year earlier. Between January and July this year, lenders foreclosed on 9,228 single-family house and condo units, down 59.2 percent from the same period last year.
A form of low-down-payment financing that’s popular with first-time home buyers – government-insured FHA loans – accounted for 35.7 percent of all home purchase loans in July. That was up from 34.9 percent the prior month and down from 42.1 percent a year earlier. This June’s FHA level was the lowest since April 2008, when it was 31.9 percent. The current cycle’s peak for FHA use was 55.1 percent of all purchase loans in September 2008.
The July Las Vegas chart is posted here.
Media calls: Andrew LePage (916) 456-7157
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