Las Vegas Region September Home Sales
Las Vegas-area home sales fell compared with a year earlier for the fourth consecutive month in September amid an ongoing decline in low-end activity and a five-year low for foreclosure resales. Price measures pointed higher again as housing demand remained strong and a greater share of all sales occurred in mid- to high-cost move-up markets, a real estate information service reported.
In September, 4,090 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County). That was down 15.0 percent from the month before and down 12.8 percent from a year earlier, according to San Diego-based DataQuick. The firm tracks real estate trends nationally via public property records.
Sales typically fall between August and September. On average, sales have declined 8.1 percent between those two months since 1994, when DataQuick’s complete Las Vegas region statistics begin. However, the decline this year was exacerbated by the relatively low number of business days in September, which began and ended with a weekend. The average number of home sales recorded daily this September was slightly higher than the average for August and about 4 percent lower than in September 2011.
This September's sales were 13.0 percent below the average number of homes sold during all months of September since 1994, and were the lowest for that month since September 2007, when 3,054 homes sold.
Though up 34 percent from a year earlier, September's new-home sales remained extraordinarily weak – about 56 percent below average for the month of September. Resale activity was 9.8 percent above average for a September, though it fell month-to-month and year-over-year. The number of houses and condos that resold in September fell 17.3 percent from the prior month and fell 18.9 percent from September 2011.
In the overall market in September, sales of mid- to higher-cost homes rose on a year-over-year basis while low-end sales continued to decline. The total number of homes that sold for less than $100,000 fell 37.4 percent in September compared with a year earlier. Transactions below $200,000 declined 20.4 percent year-over-year, while the number of homes that sold above $300,000 rose 3.8 percent. The number of $500,000-plus sales rose 19.4 percent year-over-year. (The over-$500,000 market only accounts for about 2 percent of total sales).
Affordability-driven demand has been robust in the lower-priced markets, with first-time buyers, investors and some vacation-home buyers whittling down the available supply, thereby restricting the sales volume. So why aren't more people listing their homes for sale? Many who would like to sell can’t because they still owe more than their homes are worth. Other potential sellers are holding off on a move-up purchase because of uncertainty over jobs or 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 September was $137,000 – the highest since the median was $139,000 in June 2010. September’s median rose 3.0 percent from the prior month and rose 19.1 percent from a year earlier.
September was the eighth consecutive month to post a month-to-month gain in the median, and it was the sixth in a row with a year-over-year increase. September’s 19.1 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 rise in mid-to high-end deals also helps push up the overall median. Included in the latter trend is the jump in sales of newly built homes, which on average are more expensive than resale homes. In September, new homes accounted for 17.6 percent of all sales, up from 11.5 percent a year earlier.
The September median sale price remained 56.1 percent below the November 2006 peak of $312,000. 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 – held steady at $73 in September. That was the same as in August and up 9.0 percent from a year earlier, marking the fourth consecutive month with a year-over-year gain. (This January’s $64 median per square foot was the lowest since at least 1994.) The September figure was 61.6 percent lower than the peak $190 paid per square foot in May and June 2006.
The role of foreclosure resales continued to wane in September, while short sales claimed a larger share of the resale market.
Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 19.2 percent of Las Vegas resale activity in September – the lowest level since September 2007. September's figure was down from 21.8 percent the month before and 56.3 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 42.6 percent of the Las Vegas-area resale market in September. That compares with an estimated 38.3 percent the prior month and 25.0 percent a year earlier. The estimated short sale level has exceeded the foreclosure resale level for the past three months.
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 September, lenders filed 1,278 NODs, down 36.9 percent from the prior month and down 71.7 percent from a year earlier. Between January and September this year lenders filed 12,343 NODs, down 69.8 percent from the same period last year. The notice of default is the first step in the formal foreclosure process.
Lenders foreclosed on 668 homes in the Las Vegas region in September, down 15.8 percent from the month before and down 67.0 percent from a year earlier. Between January and September this year, lenders foreclosed on 10,689 single-family house and condo units, down 60.6 percent from the same period last year.
Many distressed properties are snapped up by investors, whose activity remains near record levels.
Absentee buyers – mainly investors and vacation-home buyers – purchased 48.5 percent of all homes sold in the Las Vegas area in September. That was down a hair from 48.6 percent the month before and up from 45.2 percent a year earlier. The peak was 51.2 percent this March. Absentee buyers paid a median $112,500 in September, up from $110,000 the prior month and up 24.7 percent from $90,000 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 September, nearly 27 percent of all absentee buyers were based outside of Clark County, according to public records. Of those based outside of the Las Vegas area, about 98 percent were from states other than Nevada. California-based absentee buyers accounted for just over half of all homes bought by out-of-region absentee buyers in September, and represented 13.4 percent of all homes sold in the Las Vegas area. Topping the list of states where out-of-state investors and vacation-home buyers came from were California, which accounted for 50.1 percent of all homes sold to absentee buyers based outside of Clark County, Arizona (6.7 percent), Hawaii (4.1 percent), New York (3.5 percent) and Texas (3.3 percent).
Cash buyers purchased 52.4 percent of the Las Vegas-area homes that sold in September. That was up from a cash-buyer share of 50.9 percent of total sales the month before and up from 51.2 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. Cash buyers paid a median $106,500 in September, up from $105,000 the prior month and up 28.3 percent from $83,000 a year earlier.
Home flipping has been on the rise and has returned to levels not seen since the housing boom. In September, 7.2 percent of all homes sold on the open market had previously sold within a six-month period. That's up from a flipping rate of 6.4 percent the month before and 3.6 percent a year earlier. The September flipping rate was the highest for any month since it was 7.8 percent in November 2004.
A form of low-down-payment financing that’s popular with first-time home buyers – government-insured FHA loans – accounted for 35.2 percent of all home purchase loans in September. That was up slightly from 34.9 percent the prior month and down from 43.2 percent a year earlier. In recent months the FHA share has hovered a bit above or below 35 percent of purchase loans, which is the lowest level since early 2008. The current housing cycle’s peak for FHA use was 55.1 percent of all purchase loans in September 2008.
Las Vegas-Paradise, NV
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