Las Vegas Area June Home Sales

by 26 Jul 2011
Las Vegas region June home sales rose more than usual from May but fell short of a year earlier amid exceptionally weak new-home sales. The median price paid for a home dropped from both May and a year earlier as foreclosure resales and sub-$100,000 transactions accounted for a higher portion of all transactions, a real estate information service reported. In June, 5,262 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County), up 15.1 percent from May but down 5.1 percent from June 2010, according to San Diego-based DataQuick. The firm tracks real estate trends nationally via public property records.   On average, the region’s sales have risen 9.5 percent between May and June since 1994, when DataQuick’s complete Las Vegas region statistics begin. June’s sales total fell 1.3 percent short of the average number of homes sold in June, but only because new-home sales were so low -- the second-lowest on record for a June. The resale market performed relatively well last month: Resales of houses and condos rose 14.4 percent from May and 2.2 percent from June 2010, when outgoing federal homebuyer tax credits gave the market a final boost. Last month's resales were 35.7 percent above average for the month of June.     Resale activity has risen year-over-year for six consecutive months, lifted by robust investor and cash-only purchases, including by many out-of-state buyers.   In June, 50.6 percent of the Las Vegas-area homes sold were purchased by cash buyers. That was down from 53.0 percent in May and a record 56.7 percent in February, but it was up from 41.9 percent a year earlier. Cash purchases are where there is no corresponding purchase mortgage in the public record.   Cash buyers in June paid a median $83,000 for a home in the Las Vegas area, down from $89,000 in May and $106,000 a year earlier.   Absentee buyers – mainly investors and vacation-home buyers – purchased 45.9 percent of all homes sold in June, down from 46.2 percent in May and a record 49.9 percent in March this year, but up from 37.5 percent a year ago. Absentee buyers paid a median $94,000 in June, down from $98,000 in May and $115,000 a year earlier. Absentee buyers are those who indicate at the time of sale that the property tax bill will go to a different address.   Of last month's absentee buyers, about 34 percent had mailing addresses in Nevada, while 30 percent of absentee buyers are based in California. Most of the remaining out-of-state absentee buyers in June are based in New York(5.6 percent), Pennsylvania (3.0 percent), New Jersey (2.4 percent), Utah (1.9 percent), Hawaii (1.9 percent) and Florida (1.8 percent).    About one-third of all homes sold in the Las Vegas area last month were purchased by buyers with mailing addresses outside of Nevada. About 15 percent of all homes sold were purchased by people with California mailing addresses. Buyers with New York mailing addresses were the next-most-common, with close to 3 percent of total June sales.   Roughly 3 percent of all Las Vegas-area homes sold last month were bought by foreign buyers, based on public property records, where a foreign mailing address was available. Of those foreign buyers that could be identified, about 78 percent were from Canada and 11 percent were from Australia. Buyers with mailing addresses in Israel and China/Hong Kong made up about another 8 percent of the foreign buyers that could be identified. Foreign buyers paid a median $110,000 for resale houses and $67,900 for resale condos last month.   The heavy presence of investors and others paying cash, with their focus on lower-cost homes, helps explain why 41.1 percent of June sales were for less than $100,000. That’s up from 40.1 percent in May, 28.2 percent a year ago and 32.1 percent two years ago.    The median price paid for all new and resale houses and condos sold in the Las Vegas metro area in June was $115,000, down 1.7 percent from $117,000 in May and down 17.3 percent from $139,000 a year earlier. It was the ninth consecutive month in which the median fell year-over-year, and the magnitude of the decline was the highest in since the median fell 20.9 percent year-over-year in January 2010.   Since the median hit a 2010 high of $139,000 last June, it has either declined or shown no change each month compared with a year earlier.    Last month's $115,000 median was the lowest for any month since the median was $113,000 in October 1995, and it was 63.1 percent lower than the peak $312,000 median in November 2006.   The median’s recent decline to a more-than-15-year low can be attributed to several factors: price depreciation; robust sales of low-cost foreclosures; robust sales to investors, who mainly target low-cost properties; extraordinarily low new-home sales (new homes tend to sell for more than resale homes); and higher-than-usual condo resales (condos tend to be the least expensive homes).   June’s new-home sales represented just 10.2 percent of all transactions, compared with a monthly average of 30.1 percent of all sales over the last decade. June's condo resales represented 19.0 percent of total Las Vegas sales, compared with a 10-year monthly average of 13.2 percent.   An alternative home-price gauge – the median paid per square foot for resale single-family detached houses – slipped to $68 in June, down 1.4 percent from May and down 12.8 percent from a year earlier. June’s median paid per square foot was the lowest since it was also $68 back in February 1995. June’s figure was 64.2 percent below the peak $190 paid per square foot in May and June of 2006.   In June, a popular form of low-down-payment financing for first-time home buyers – government-insured FHA loans – accounted for 42.4 percent of all home purchase loans. That was the same as in May but down from 53.4 percent a year earlier and a peak of 55.1 percent in September 2008.    Distress sales – the combination of sales of foreclosed homes and “short sales” – continued to dominate the market, representing 68.5 percent of the resale market last month.   Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 57.5 percent of the Las Vegas resale market in June. That was up from 54.9 percent in May and 45.2 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 11.0 percent of Las Vegas-area June resales. That compares to an estimated 13.1 percent in May, 19.6 percent a year ago, and 7.0 percent two years ago.    The number of homes foreclosed on in the Las Vegas region in June fell from May but rose sharply from a year earlier. Lenders foreclosed on 3,673 single-family house and condo units last month, down 3.8 percent from May but up 39.1 percent from a year ago. The figures are based on the number of Trustees Deeds filed at the county recorder’s office.   During the first six months of this year, 19,460 house and condo units were foreclosed on in Clark County, up 36.9 percent from the same 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.   (chart below)  
Las Vegas-Paradise, NV        
         
Median sale price        
 

Jun-10

May-11

Jun-11

YOY %Change

Resale houses

$139,000

$123,000

$120,000

-13.7%

Resale condos

$72,000

$65,000

$59,750

-17.0%

New homes

$190,143

$189,028

$190,700

0.3%

All homes

$139,000

$117,000

$115,000

-17.3%

         
Number of sales        
 

Jun-10

May-11

Jun-11

YOY %Change

Resale houses

3,601

3,196

3,722

3.4%

Resale condos

1,023

935

1,002

-2.1%

New homes

918

439

538

-41.4%

All homes

5,542

4,570

5,262

-5.1%

         
Source: DataQuick/DQNews.com      

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