As the dismal U.S. housing market slides further downhill–home prices in July posted a 16.3% annual drop–some sellers are unloading their homes to bargain-hunters.

But in cities like Seattle, Jacksonville, Fla., and St. Louis–the hardest major cities in which to sell a home–even sellers who have substantially lowered their prices aren’t finding it easy to move their houses.

In others, including Philadelphia, Sacramento, Calif., and Las Vegas, plummeting home prices spurred by high foreclosure rates have added more reasonably priced houses and condominiums to the market and sparked a rise in buying and selling.

In Depth: Hardest And Easiest Cities To Sell A Home

Factors like banks’ reluctance to lend, the slow movement of foreclosed homes through some state systems and gun-shy buyers in others have restricted selling in many cities. In others, income-squeezed households have a better chance of turning their homes to cash, even if it’s not as much cash as they’d like.

In the second quarter of 2008, the median price of a single-family home dropped 23.6% in Las Vegas from the previous year, to $235,300, according to National Association of Realtors reports. In Washington, D.C., prices fell 16.8% to $370,300, and in Chicago that number went down 9%, to $257,600.

Behind the Numbers
Radar Logic, a New York City-based real estate data and analytics company, today released housing sales transaction numbers for a sampling of homes in 25 of the country’s major metropolitan areas. This story is based on these numbers.

Of the cities measured, Philadelphia has had by far the steepest increase in home sales, with transactions more than doubling from the same time the previous year. Seattle marks the other end of the sales spectrum, having seen its transaction numbers drop by 43.7% from the previous year. Radar records transactions for sales where complete data were provided.

Although Philadelphia made the top of Radar Logic’s transaction count list in July, Michael Feder, Radar’s president and CEO, warned against interpreting too much from the sharp rise in percentage of transactions for that city.

“It can mean that there’s a more stable market in Philadelphia,” he says. “But sometimes a county will go dark for a month and not file any data from public records sources. Philadelphia is not wonderful in terms of this. So there are not necessarily a lot more transactions there.”

Sacramento, which saw swift sales in July, also had the greatest second-quarter drop in home prices from the previous year of any metropolitan area, with the median price of single-family homes down 35.6% to $229,500. There, and in other nearby cities hardest hit by the subprime disaster, houses have started to move in part because the effects of the foreclosure crisis have had more time to set in.

“In the places hardest hit a year and a half ago, prices have come way down,” says Glenn Kelman, CEO of online real estate broker Redfin Corporation. “In San Diego, Los Angeles, Las Vegas and Sacramento, they have all acknowledged the reality of home prices.”

But in Miami, also a foreclosure-rich area, buyers seem to be holding out for a better deal. Here, the number of sales has dropped 23.2%.

“Miami has a significant oversupply, and people are somewhat waiting it out,” says Rachel Drew, a research analyst at the Harvard Joint Center for Housing Studies. “There’s a lot of stock to move and people are waiting to see where the bottom is.”

Foreclosures play a complex role in the rate of home sales. In cities like Sacramento and Phoenix, foreclosed homes have flooded the market with discounts.

But real estate laws can have as much to do with homes hitting the market as foreclosure rates.

In California and Arizona, the law restricts deficiency judgments–a court’s ability to collect on the remaining value of a foreclosed home once it has been sold. In these states, homeowners with negative equity can walk away from the property, resulting in what some call “jingle letters,” house keys sent to the bank in an envelope. While the practice has consequences for lenders and borrowers, it speeds turnover in a foreclosure-ridden market.

“Lenders get the house back very rapidly and can move to sell the house very rapidly,” says Anthony Sanders, a professor of finance and real estate at Arizona State University. “In other states, deficiency judgments can slow foreclosure markets to a crawl. You go to Georgia and it’s much tougher.”

In Phoenix, which had 9.4% more recorded transactions than the previous year, many foreclosed homes weren’t on the market until recently. Sales of homes owned by banks and other financial institutions were nearly 10 times higher in July than they were the previous year. Sanders says that early in the crisis, banks held on to foreclosed properties.

“Banks, like everyone else, were hoping for a turnaround in the housing market. They were hoping that they could sell a house for more,” he says. “As the evidence comes out that this isn’t happening, they’ve wised up and started reducing house prices to get it out of their inventory.”

Radar Logic’s Feder says that increased sales of foreclosed homes in places like Phoenix and Los Angeles will be good for the market.

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“Median prices are affected by these heavily discounted homes. As foreclosed homes are absorbed, we will be left with nonforeclosed homes, and we will start to see stability in the housing market,” he says. “The question is, how long will that take?”

A handful of major cities around the country have seen a sharp rise in transactions, but most are still waiting uneasily for the market to bottom out and buyers are finding loans increasingly difficult to get. In some west coast and Florida cities badly affected by subprime loans and dropping house prices, foreclosed homes are being sold at a faster rate and may be moving those cities toward a housing recovery.

But in New York, whose economy is expected to be hit hard by troubles in the financial services sector, housing prices have just begun to drop, down 5.3% in the second quarter. Sales have dropped 24.5%, suggesting the worst may be yet to come.

Even in stable markets, “less is happening,” says Feder. “It doesn’t necessarily mean buyers have plummeted, it just means buyers and sellers still don’t agree on prices.”

Credits: Forbes

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Home prices in 20 major U.S. cities fell 0.9% in July and were down 16.3% in the past year, according to the Case-Shiller home price index released Tuesday by Standard & Poor’s. In the smaller sample of 10 cities, prices fell 1.1% in July and 17.5% in the past year. Prices fell in 13 cities in July, led by a 2.8% drop in Las Vegas and a 2.7% decline in Phoenix. Prices have fallen in all 20 cities in the past year. “There are signs of a slowdown in the rate of decline across the metro areas, but no evidence of a bottom” said David M. Blitzer, chairman of the index committee at S&P.

Credits: Market Watch

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As a poker dealer at The Orleans, John Hill talks to players almost every day who have come to Las Vegas from faraway states and foreign countries.

They’re not all here for the card game. That’s just something to pass time when they’re not out scouring Las Vegas for a good investment home.

Median home prices have dropped 25 percent from last year to about $210,000, Las Vegas-based Home Builders Research reported. Foreclosures and short sales, or homes sold for less than the mortgage owed, account for roughly 65 percent of monthly sales.

What really boils Hill’s blood is that international and out-of-state buyers are snapping up housing deals while the backbone of Las Vegas’ tourism industry — people who earn most of their income from tips — are being squeezed out of the market.

“All the tip people can’t afford a home in Las Vegas because of the mortgage crisis, while people from China and the Philippines and Canada come in and buy homes like crazy,” Hill said.

Speculators and investors were partly blamed for the run-up in Las Vegas home prices from 2004 to 2006 and the ensuing foreclosure mess. It seems they’re back in town, circling like vultures.

“I think the investor mentality is surfacing again,” housing analyst Larry Murphy of Las Vegas-based SalesTraq said. “Some speculators, investors, buyers — whatever you want to call them — they got … caught in the wringer. This could be a more sophisticated investor.

“At least they survived. They’re not broke,” he added. “I’ve got to believe they’re buying with cash or I understand the banks will provide financing with a decent down payment.”

Many of them are cash buyers, Realtor Robin Camacho of Top10Real EstateValues.com said. She had a client from Canada who wanted to buy multiple homes in Las Vegas when the U.S. dollar had weakened against foreign currencies.

“I’m working with so many buyers, it’s unbelievable,” Camacho said. “It’s been tough getting offers accepted lately, even offers for well over list price. Right now, I’m working with at least seven or eight serious, well-qualified buyers — some strictly cash — at the same time, which is incredible, even in a good market.”

A report from Credit Suisse on the Las Vegas housing market said buyers are back and looking for deals. Traffic levels improved during the summer, especially on lower-priced homes.

Real estate agents noted a growing sense of urgency among buyers to “buy while the price is low” as inventory levels have been steady for several months and sales are starting to improve, the report said.

Mark Feinberg, a truck driver from New Jersey, wants to use equity from properties he owns on the East Coast to possibly buy two lower-priced homes in Las Vegas, where he plans to retire someday.

Feinberg made several offers on foreclosure homes during a visit in August, including a $73,500 bid on a fixer-upper in east Las Vegas that was listed for $64,900. He didn’t get it.

However, his $54,000 offer for a townhome in the same area was accepted.

“I probably like it least as far as possibly living there someday, but I like it most for the cash flow,” he said.

Feinberg said he prefers to invest in Las Vegas over other depressed places like New Jersey and Florida because he believes this market will rebound sooner.

“It’s the greatest place in the world and with real estate prices right now, it’s probably the best deal you’re going to find,” he said.

International buyers have been an important source of business since the market downturn, said Wayne Lee, marketing manager for foreign currency exchange specialist HiFX. It’s estimated that between 150,000 and 190,000 homes were sold to foreign nationals from May 2007 to May 2008.

Canada replaced Mexico as the country with the largest share of buyers in the United States, more than doubling from 11 percent last year to 23.5 percent this year. However, the U.S. dollar continues to strengthen against the Canadian dollar, making it more expensive for Canadians looking to buy U.S. properties, Lee said.

With the British pound remaining strong against the U.S. dollar and house prices softening, “many British buyers agree that now could be the perfect time to snap up a bargain in the States,” Justin Figgins, director of Rightmore Overseas, said in the National Association of Home Builders’ online newspaper.

The British pound rose against the dollar Friday, going to $1.8355 from $1.8192.

During this year’s first half, searches by buyers in the United Kingdom for real estate in the United States rose by 50 percent to 190,000 a month on average, Figgins said.

Most of the loans that Patrick McNaught sees as president of Greystone Financial Group in Las Vegas are primary residents who’ve been “sitting on the sidelines,” priced out of the housing market and renting in the meantime. They’re buying with Federal Housing Administration financing and 3 percent down, he said.

Investors of properties financed through Freddie Mac and Fannie Mae are required to come up with substantially more, anywhere from 10 percent to 25 percent down, he said.

“So FHA gives working borrowers in town the opportunity to enter the marketplace,” McNaught said.

Local resident Wendy Reese was able to snag a foreclosure home in northwest Las Vegas. It was listed for $299,000 and had three offers before the “For Sale” sign was put up. She got the five-bedroom, 3,100-square-foot home for $303,000.

The 4-year-old house needed cleaning and was missing window coverings, light fixtures and ceiling fans, but Reese said she liked the countertops and floor plan.

“I could look past the dirt and visualize it,” she said. “I had been doing my research and every time I found a home and ran to it, it was like, ‘We have 12 offers.’ Some were cash deals. It’s definitely a buyer’s market.”

The window of opportunity is shrinking, Joe Stewart of Realty Executives said. Recent housing reform legislation passed by Congress does away with seller-assisted down payment programs, which will make it tougher for local residents to buy a home. Also, FHA is increasing down payments from 3 percent to 3.5 percent effective Oct. 1.

“It is going to materially affect people in this town who truly deserve to have a home, who are well qualified but don’t have that much cash saved up,” Stewart said. “It’s a big issue and one that the shadow Congress has to work with.”

Resale homes on the Multiple Listing Services continue to be distributed toward units not occupied by the owner. Vacant properties accounted for 54.1 percent of inventory, while tenant-occupied properties made up 9.9 percent, Las Vegas-based research firm Applied Analysis reported.

The remaining owner-occupied units represented a more modest 36 percent of all listings.

The 23.2 percent year-over-year decline in resale inventories is primarily due to a reduction in owner-occupied listings, suggesting investors and speculators continue to be impacted, Applied Analysis principal Brian Gordon said.

Both investors and primary homeowners are benefiting from huge downward adjustments in Las Vegas home prices, Lindsay Watt of Gavish Real Estate said.

“Although the housing market bubble has blown overvalued houses back to realistic prices, it’s created a tremendous opportunity for people in this town to own a home based on a real-life wage,” Watt said. “With Las Vegas being a service-based town, it was completely unrealistic that these values would maintain.”

Credits: Review Journal

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Home sales in the valley took their first downturn in 2008 in August but remained relatively strong as the price of existing homes continued downward, the Greater Las Vegas Association of Realtors reported.

New and existing home sales in the Silverado area increased last month from July as did the median price, according to statistics from the Realtors’ association. The Silverado area had 151 new and existing homes sold in August at a median price of $225,000. The median price is up from $211,000 on 148 properties sold in July compared to $248,000 on 62 homes sold in January.

Bank-owned properties continue to drag down the prices and accounted for about two-thirds of all homes and condos sold valleywide in August, association President Patty Kelley said in a statement.

In Southern Nevada, sales were down 1.8 percent from July, after seven consecutive months of increased home sales.

The number of homes sold last month increased 93.4 percent from August of 2007. The median price of a single-family home sold in the Las Vegas area decreased by 4.5 percent from $220,000 in July to $210,000 in August. That’s down 30 percent from August 2007.

It’s not clear if the local housing market has hit the bottom, but Kelley said history shows these prices won’t last forever. And the number of available homes declined 3 percent in August. The inventory of homes is down 6.7 percent from last August.

“What we do know is that, once we sell off this inventory of homes in or nearing foreclosure, home prices will begin to increase,” she said.

Credits: Las Vegas Sun

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