Las Vegas Region May Home Sales
Las Vegas-area home sales held at a six-year low last month as buyers continued to face inventory, affordability and credit hurdles, and the share of homes purchased by cash and absentee buyers fell again. The median sale price edged up from April and was 12 percent higher than a year earlier, but that year-over-year gain was the lowest in nearly two years, a real estate information service reported.
In May, 3,904 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County). That was down 4.2 percent from the month before and down 22.3 percent from a year earlier, according to San Diego-based DataQuick. The firm, which is now owned by Irvine-based property information company CoreLogic, tracks real estate trends nationally via public property records.
Las Vegas-area sales usually rise between April and May. On average, sales have risen 3.5 percent between those two months since 1994, when DataQuick's complete Las Vegas-area statistics begin. Sales have fallen on a year-over-year basis for eight consecutive months.
Last month’s home sales were the lowest for the month of May since May 2008, when 3,688 homes sold, and they were 18.7 percent below the average number sold during all months of May since 1994. However, resales of houses and condos combined were 2.1 percent above average for a May, while sales of newly built homes were 66.1 percent below the May average. Last month’s condo resales were 7.3 percent higher than the May average, while resales of detached houses were 0.9 percent above average.
Home sales have been constrained by higher prices and mortgage rates compared with this time last year, as well as by credit challenges and a tight supply of homes for sale, especially in the lower price ranges. Some owners still can’t afford to sell because they owe more than their homes are worth. Also, foreclosures are down, further limiting the supply of homes for sale.
Las Vegas region buyers paid a median $185,000 for all new and resale houses and condos purchased in May, up 1.8 percent from $181,775 in April and up 12.2 percent from $164,864 a year earlier. Last month’s median matches the $185,000 median this March, which was the highest since the median was $190,000 in November 2008.
The median sale price’s year-over-year gains over the past 26 consecutive months have ranged from 1.7 percent to 36.5 percent. Last month’s 12.2 percent year-over-year increase was the lowest since the median rose 12.1 percent in July 2012. The median’s year-over-year increases have been double-digit for the past 23 months.
May’s median was 40.7 percent below the region’s peak $312,000 median in November 2006.
The run-up in home prices over the last year varies somewhat depending on price segment. In May, the lowest-cost third of the region’s housing stock saw a 23.9 percent year-over-year gain in the median price paid per square foot for resale single-family detached houses. The annual increase was 17.7 percent for the market’s middle third and 15.0 percent for the top, most-expensive third.
DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.
In May, the number of sales where the price was below $100,000 dropped 46.7 percent compared with a year earlier, the result of both higher prices this year as well as the tight supply of lower-cost homes for sale. Sub-$200,000 transactions fell 31.8 percent year-over-year. Meanwhile, the number of homes that sold for $200,000 or more dipped 1.9 percent year-over-year. May sales of homes priced from $200,000 to $500,000 – a range that would include many move-up purchases – increased 0.4 percent from a year earlier, while the number selling for $500,000 or more fell 21.3 percent.
Investors' impact on the Las Vegas market continued to wane last month. Absentee buyers, which include investors and some vacation-home buyers, purchased 38.3 percent of the homes sold in May, down from 39.9 percent the month before and down from 47.4 percent a year earlier. Last month the absentee buyer share of total sales was the lowest since it was 36.2 percent in November 2009. The monthly average for the absentee buyer share since January 2000 is 35.4 percent, while the peak was 51.2 percent in March 2012.
In recent months the Las Vegas region has seen a downward trend in purchases by investors who buy multiple homes per month, and in purchases by investors based outside of Nevada.
In May, 87 buyers purchased two or more homes on the open market (excludes public foreclosure auctions) in the Las Vegas area, totaling 339 properties, based on analysis of buyer names in the public record. About half of those homes were purchased by those who bought five or more properties. In May last year more than twice as many multi-home buyers purchased more than twice as many homes. (Note: In some cases individuals and partnerships buy under different names).
Last month buyers based outside of Nevada bought 21.1 percent of all homes sold in the Las Vegas region, down from 27.9 percent a year earlier.
The decline in investment activity corresponds with a drop in cash purchases, in large part because many investors pay with cash. Last month cash was used to purchase 40.2 percent of all homes sold – the lowest level since 39.3 percent of homes were bought with cash in March 2009. Last month’s cash share was down from 44.4 percent in April and down from 59.6 percent a year earlier. The peak cash share was 60.1 percent in June 2013, while the monthly average since 1994 is 23.7 percent.
To view additional Las Vegas region May highlights, visit DQNews.com.
Media calls: Andrew LePage (916) 456-7157
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