The number of Las Vegas homes on the market shrunk in July to less than an eight-month supply, buoyed by existing homes hitting their highest sales mark in almost two years.
The latest numbers released Tuesday by SalesTraq are more good news for the housing market, whose recovery depends on reducing inventory. But that good news has come at a price – literally – with the prices of homes sold reaching their lowest point since early 2004.
In July, 3,173 existing homes were sold, a 56 percent increase over July 2007 when 2,027 sold. July was by far the best month of 2008, surpassing the 2,672 sales in June. It was the best month in sales since September 2006. The year’s worst month was February, with 1,525 sales, according to Larry Murphy, SalesTraq’s president.
In the past three months, Las Vegas has averaged more than 2,600 closings a month.
“A lot of people are asking, ‘When do we hit the bottom?’ ” said Steve Bottfeld, executive vice president of Marketing Solutions. “The answer is we have already hit it and are just scudding along it.”
The creation of more than 7,000 jobs because of the openings of Wynn Encore, Aliante Station and Eastside Cannery will further bolster housing sales, Bottfeld said.
“The data suggest that the Las Vegas market continues to improve more rapidly than other areas of the country,” Bottfeld said.
SalesTraq’s numbers paint a more complete picture of the housing market compared with data released earlier this month by the Greater Las Vegas Association of Realtors, which tracks properties sold using the Multiple Listing Service.
SalesTraq reported Las Vegas had a 7.9-month supply of homes at the end of July, based on a quarterly average. There were 20,641 existing homes for sale, which is in line with the total since May, Murphy said.
At the end of last year, Las Vegas had a 22-month supply of homes.
A normal market is considered six months, Bottfeld said. If only July sales and inventory are considered, the inventory is about 6 1/2 months, he said.
However, the median price of the 3,173 existing homes sold in July was $210,000. That’s the second lowest price since $207,100 in March 2004. The median price of Las Vegas’ homes sold hasn’t dipped below $200,000 since February 2004, according to SalesTraq.
Prices have come down because 61 percent of July’s home sales were bank-owned homes with a median price of $193,000. Thirty-nine percent of closings had a median price of $235,000, Murphy said.
“I am not as concerned with price as I am with sales,” Bottfeld said.
Prices will rise once the inventory of foreclosure homes is whittled further, he said.
Reducing the supply of existing homes is crucial to the recovery of the new-home market, which continues to slump. July’s 731 sales were the fewest in any month this decade and were down 58 percent from July 2007, Murphy said.
New-home sales have surpassed 1,000 only one month this year, in March.
Builders continued to drop prices in July with new homes going for a median price of $252,990, about $2,300 less than the end of the second quarter. The price is nearly 20 percent below July 2007’s $314,993.
Builders took out 668 permits in July, which is the second highest monthly total this year, SalesTraq reports.
Home Builders Research reported Tuesday that builders took out 1,037 permits in July.
“I am encouraged to see that many,” President Dennis Smith said. “The new-home market is slow and flat, but it has bottomed out.”
The increase in permits could be spurred by a new federal program to give first-time homebuyers up to $7,500 in assistance that would be repaid interest free over 15 years, Smith said. Once the credit crunch lightens, the new-home market could be positioned next spring for the beginnings of a recovery, he said.
The new and mid-rise condo market had its weakest month of the year in July with 73 closings. That’s the fewest since 61 in December. The high-rise condo market has been hard hit by the credit crunch that has made it difficult for buyers to secure financing.
The median price for all new homes in July, including condos, fell to $262,185, the lowest it’s been this year. That’s a drop of nearly $8,000 from June.
The numbers show more hope for the new-home market than the high-rise condo market, which may be more than a year away from recovery, Bottfeld said.
Credits: In Business Las Vegas