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Sales of existing Las Vegas-area homes rose year-over-year for the 10th consecutive month in October, while prices edged lower. The combination of super-low mortgage rates and continued price erosion kept investor and first-time-buyer interest high, triggering a 33 percent annual gain in the number of sales below $100,000, a real estate information service reported.
In October, 4,595 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County). That was down 2.0 percent from September but up 15.3 percent from October 2010, according to San Diego-based DataQuick. The firm tracks real estate trends nationally via public property records.
A dip in sales between September and October is not unusual. On average, sales have fallen 2.4 percent between those two months since 1994, when DataQuick’s complete Las Vegas region statistics begin.
Last month marked the fourth in a row to record a year-over-year gain in total sales and the 10th in a row to log an annual increase for resales (excludes new homes). Last month’s sales of newly-built homes rose sharply – 31.8 percent – from a year earlier but were still the second-lowest on record for an October.
Total sales last month were 1.1 percent higher than the average number of homes sold in October since 1994, while resale activity was 35.1 percent above average for an October.
October sales were most robust in the lower price ranges. The total number of transactions below $100,000 climbed 33.2 percent from a year earlier and made up 41.3 percent of all deals, compared with 34.8 percent of all sales a year ago. The number of sales below $200,000 last month rose 18.2 percent year-over-year and the number above $300,000 fell 4.4 percent from a year earlier.
On average, homes that sold for less than $100,000 last month were 1,320 square feet with 2.7 bedrooms and 2.2 baths on a 4,713-square-foot lot. The homes were, on average, about 22 years old. Almost all of the homes were previously owned (not new). About 60 percent were single-family detached houses while the rest were condos. About 58 percent were bought by absentee buyers, while 72 percent were purchased by those who appeared to have paid cash for their sub-$100,000 abode.
This year’s big sales gain for lower-cost homes has put 2011 on track to have the highest level of resale activity in six years. The number of houses and condos that resold between January and October this year totaled 41,662, up 8.4 percent from last year and the highest since 2005, when 52,166 homes resold during that 10-month period. Overall sales (including new homes) totaled 46,120 during the first 10 months of this year, up 6.5 percent from last year and the highest since 2006.
The median price paid for all new and resale houses and condos sold in the Las Vegas metro area last month was $114,900, down 0.1 percent from September and down 8.1 percent from $125,000 a year earlier. It was the 13th consecutive month in which the median fell year-over-year.
Last month’s median was 63.2 percent short of the peak $312,000 median in November 2006.
The median’s recent decline to levels not seen since the mid 1990s can be attributed to several factors: home 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).
October’s new-home sales represented just 10.3 percent of all transactions, compared with a monthly average of 28.8 percent of all sales over the last decade. October's condo sales represented 20.5 percent of total Las Vegas sales, compared with a 10-year monthly average of 13.7 percent.
An alternative home-price gauge – the median paid per square foot for resale single-family detached houses – dipped to $66 last month, down from $67 in September and down 12.0 percent from $75 a year earlier. Last month’s figure was the lowest since at least 1994 and was 65.3 percent below the peak $190 paid per square foot in May and June of 2006.
In October, a form of low-down-payment financing that’s popular with first-time home buyers – government-insured FHA loans – accounted for 38.4 percent of all home purchase loans. That was down from 43.2 percent in September and down from 46.0 percent a year earlier. The current cycle’s peak was 55.1 percent in September 2008. Last month’s figure was the lowest since it was 36.5 percent in June 2008.
Cash buyers purchased 49.3 percent of the Las Vegas-area homes that sold last month. That was down from 51.2 percent in September and 51.3 percent a year earlier. The record was 56.7 percent this February. Cash purchases are where there is no corresponding purchase mortgage in the public record.
Cash buyers in October paid a median $84,000 for a home in the Las Vegas area, up from $83,000 in September but down from $95,000 a year earlier.
Absentee buyers – mainly investors and vacation-home buyers – purchased 46.5 percent of all homes sold in October. That compares with 45.2 percent in September, 43.6 percent a year ago and a record 49.9 percent in March this year. Absentee buyers paid a median $90,000 last month, the same as in September and down from $100,000 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.
Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 52.8 percent of the Las Vegas resale market in October. That was down from 56.3 percent in September and 52.9 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 12.7 percent of Las Vegas-area October resales. That compares with an estimated 13.3 percent in September, 15.8 percent a year ago, and 10.7 percent two years ago.
In the wake of a new Nevada law that creates additional requirements for lenders trying to foreclose on properties, the number of notices of default (“NODs”) filed in Clark County plummeted last month. Lenders filed 846 NODs on houses and condos in October, down 81.2 percent from 4,507 in September and down 83.9 percent from a year earlier. The notice of default is the first step in the formal foreclosure process.
However, default filings began to pick back up in Clark County during November. Lenders filed nearly 860 NODs during the first 10 business days of November – more than in all of October.
The number of homes foreclosed on in the Las Vegas region in October fell from both September and a year earlier. Lenders foreclosed on 1,928 single-family house and condo units last month, down 4.9 percent from September and down 34.6 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 10 months of this year, 29,053 house and condo units were foreclosed on in Clark County, up 16.1 percent from the same period last year.
(chart below)
Las Vegas-Paradise, NV
Median sale price
Oct-10 Sep-11 Oct-11 YOY %Change
Resale houses $133,000 $120,000 $119,850 -9.9%
Resale condos $65,000 $59,100 $59,900 -7.8%
New homes $215,000 $201,528 $192,208 -10.6%
All homes $125,000 $115,000 $114,900 -8.1%
Number of sales
Oct-10 Sep-11 Oct-11 YOY %Change
Resale houses 2,758 3,241 3,182 15.4%
Resale condos 870 911 941 8.2%
New homes 358 538 472 31.8%
All homes 3,986 4,690 4,595 15.3%
Source: DataQuick/DQNews.com
