June Las Vegas Metro Area Home Sales

The number of homes sold in the Las Vegas region last month shot up from May but fell short of a year ago, when first-time buyers and investors had more deeply discounted foreclosures and other sub-$100,000 homes to choose from. Various home prices measures indicated little change last month, a real estate information service reported.

Foreclosure resales – homes that had been foreclosed on in the prior 12 months – fell to 46.4 percent of all resales in June, down from 49.5 percent in May and down from a near-record 70.0 percent a year ago, according to MDA DataQuick of San Diego. The firm tracks real estate trends nationally via public property records.

Foreclosure resales have declined each month since they peaked at 73.7 percent in May last year. Last month’s figure was the lowest since foreclosure resales were 43.3 percent of the resale market in January 2008.

A total of 5,397 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County) last month, up 23.1 percent from May but down 2.2 percent from a year earlier. On average, sales have increased 8.9 percent between May and June since 1994, when DataQuick’s complete Las Vegas region statistics begin.

It’s likely that June’s jump in escrow closings over May is at least partly the result of a burst of escrow openings back in April, given the deadline to open escrow to be eligible for the former federal home buyer tax credit was April 30. Many of those deals would have closed escrow in June, especially if they were short sales, which typically take longer to complete.

Despite any boost from the tax credits, June’s sales total was still the third-lowest for that month – behind 2007 and 2008 – since 2001. It was 1.3 percent higher than the average June sales tally back to 1994.

The dip in sales from a year ago is partly a reflection of growing price stability and, in some areas, price gains, which have coincided with the decline in foreclosure resales over the past year. Buyers simply have fewer bargains – especially under $100,000 – to choose from. Last month’s sales of homes priced below $100,000 fell to 28.9 percent of all transactions, down from 30.8 percent in May and 32.1 percent a year ago. Meanwhile, sales between $100,000 and $200,000 rose to 47.6 percent of all deals, up from 46.4 percent in May and 43.9 percent a year ago.

In the market’s higher-end, sales above $500,000 were 2.0 percent of all transactions, down from 2.5 percent in May but up from 1.7 percent in June 2009.

The number of houses and condos that resold (excludes newly built homes) in June rose to 4,480, up 16.1 percent from May but down 11.2 percent from a year earlier – the third consecutive month to post a year-over-year decline. Until April this year, resales had risen on a year-over-year basis for 23 straight months.

Sales of all newly built houses and condos shot up to 917 in June, up 74.0 percent from May and up 93.1 percent from a year earlier. However, it was still the second-slowest June, behind last year, for new-home sales since at least 1994.

The median price paid for all new and resale houses and condos sold in the Las Vegas metro area in June was $136,290, up 1.7 percent from $134,0000 in May and up 1 percent from $135,000 a year earlier. In April this year, the median had risen above the year-ago level by 0.7 percent, marking the first annual gain since February 2007, but then the median dropped by 0.7 percent in May.

Last month’s median was 56.3 percent below the peak $312,000 median in November 2006.

The median price paid for resale single-family detached houses – by far the region’s largest home-type category – was $139,000, up 1.1 percent from $137,500 in May but down 0.7 percent from $140,000 a year earlier. The June resale house median was 55.5 percent lower than the peak $312,250 resale house median in June 2006.

The median price paid last month for resale condos was $70,000, down 2.8 percent from May but the same as a year earlier. The resale condo median has been hovering a bit above or below $70,000 each month over the last year. June’s resale condo median stood 65.5 percent below its $203,000 peak in July 2006.

An alternative price gauge – the median paid per square foot for resale single-family detached houses – held at $77 last month, unchanged from May and a year ago. Last month marked the third consecutive month in which that price measure didn’t fall year-over-year. Prior to this April, the median paid per square foot had declined year-over-year each month since late 2006. June’s figure was 59.5 percent below the June 2006 peak of $190 per square foot.

Meanwhile, foreclosures eased again last month. In June, lenders foreclosed on 2,630 single-family house and condo units in the Las Vegas region, down 2.6 percent from May and down 27.4 percent from a year ago. The peak month was February 2009, when 3,718 homes were foreclosed on. The figures are based on the number of Trustees Deeds filed at the county recorder’s office.

In the first six months of this year, 14,206 Las Vegas region houses and condo units were lost to foreclosure, down 13.9 percent from the same six-month period last year.

The foreclosure totals can include units that the county assessor has designated condos, but are currently used as apartments (e.g. a 100-unit complex designated as condos but used as apartments could be foreclosed on and those units would be reflected in the foreclosure total for that month). For this reason and others, the number of foreclosure filings has seesawed, and a single month’s increase or decline doesn’t necessarily indicate a new trend.

The drop in the number of foreclosures re-selling has created stiff competition between first-time buyers and investors, who continue to represent a huge portion of the market.

In June, a popular form of financing for first-time home buyers – government-insured FHA loans – accounted for 54.5 percent of all home purchase loans. That was up from 51.7 percent in May but down slightly from 55.7 percent a year earlier.

Absentee buyers purchased 37.5 percent of all Las Vegas–area homes sold in June, paying a median $113,000, which was up from a median of $110,000 in May and $105,000 a year earlier. Absentee buyers bought 40.9 percent of the homes sold in May and 37.5 percent in June 2009. Absentee buyers are often investors, but can include second-home buyers and others who, for various reasons, indicate at the time of sale that the property tax bill will go to a different address.

Buyers who appear to have used cash to purchase their homes accounted for 42.5 percent of all June sales, down from 46.7 percent in May but up from 42.1 percent a year earlier, based on an analysis of public property records. The median price paid in these seemingly all-cash deals in June was $105,000, the same as in May but up from $95,000 a year ago.

Specifically, these all-cash deals were transactions where there was no indication of a purchase mortgage recorded at the time of sale. Some of these “cash” buyers could have used alternative financing arrangements outside of a typical, recorded purchase mortgage, and in some cases they might be taking out mortgages after their purchases. All-cash deals have become popular in many Western markets where prices have dropped sharply, luring investor buyers who can’t always qualify for traditional mortgages. Moreover, sellers favor the relative speed and certainty of all-cash transactions.

Last month 3.5 percent of all homes sold had been “flipped,” meaning they had previously been sold on the open market within the prior six months. In May the flipping rate was 4.8 percent, while a year ago it was 2.4 percent. The region’s flipping rate peaked in September 2004 at 8.9 percent.

Las Vegas-Paradise, NV MSA

Number of sales	Jun-09	Jun-10	%Chng
Resale houses	4,042	3,497	-13.50%
Resale condos	1002	983	-1.90%
New homes	475	917	93.10%
All homes	5,519	5,397	-2.20%

Median sale price	Jun-09	Jun-10	%Chng
Resale houses	$140,000	$139,000	-0.70%
Resale condos	$70,000	$70,000	0.00%
New homes	$202,440	$190,286	-6.00%
All homes	$135,000	$136,290	1.00%