New numbers released show a huge jump in the number of homes sold in Las Vegas. The Greater Las Vegas Association of Realtors says the number of homes sold jumped 181-percent in September, compared to the same time last year.
The association indicates that home sales were high due to lower selling prices.
The median price of a single-family home in Las Vegas went down from $210,000 in August to $195,000 in September.
Credits: Las Vegas Now
The run of seven consecutive months during which home sales increased ended in August, but sales remained strong compared with last year, and inventory was whittled down – good signs for the housing market’s eventual recovery.
The 2,545 sales in August were 93 percent more than in August 2007, according to the Greater Las Vegas Association of Realtors. There were 47 fewer sales in August than in July, marking the first month this year there has been a decrease from the previous month.
The release of the latest home statistics came after the U.S. government took over Fannie Mae and Freddie Mac, the government-sponsored enterprises that back about half of the country’s mortgages.
The takeover has already affected mortgage rates, which have fallen this week. Several analysts said they will continue to fall in the coming weeks.
Some observers had predicted a slight dip in sales in August as some homebuyers were distracted by the Olympics, cutting into their time to look for a home.
“I think this is a continuation of the slow improvement that we have been having,” said Dennis Smith, president of Home Builders Research. “We can’t start dancing in the street to think everything has turned around. Inventory is going down, and that’s a good thing, but prices have to stop falling before we say we are out of the woods yet.”
Prices continued their downward slide, which analysts said has prompted the surge in buying in recent months. The median price of the 2,545 homes sold in August was $210,000, a $10,000 drop or 4.5 percent, from July. The median price of homes sold in August was 30 percent below a year ago, according to the Realtors group, which tracks homes sold on the Multiple Listing Service.
President Patty Kelley attributed the continued decline in prices to the unprecedented number of bank-owned properties on the market and that two out of every three homes sold every month are owned by lenders.
Kelley wouldn’t predict how far prices would fall and when it would stop. She said that will only end when the market sells off homes in or near foreclosure.
“I don’t see how they can go much lower,” Kelley said. “The median price is shaped by the heavy foreclosure activity. There are still multimillion-dollar sales.”
Smith thinks $200,000 may be a barrier because he says he can’t believe that of all the homes built in the past five to 10 years, more than 50 percent are worth less than $200,000.
But for now, Smith said it looks as if prices will continue to fall and said it is likely to continue until spring.
“Nobody can tell us how many foreclosures are coming in the system,” Smith said. “Until we know what those are, we can’t run the calculations.”
Based on the new listings posted in August, prices should continue to fall. The median price for new listings in August was $225,000, 4.3 percent lower than in July, and 32 percent below the median listing price in August 2007.
The takeover of Fannie Mae and Freddie Mac has many predicting it will help restore consumer confidence and make it easier for homebuyers to find a mortgage.
“I think for consumer confidence that the government backing those organization is good,” said Ken Perlman, vice president of Sullivan Group Real Estate Advisors.
It could also free up lenders to make more loans and stimulate the housing market, Perlman said. The biggest drawback is over the long term because the government takes on larger debt and that could affect taxes down the road.
Not only will the takeover help the existing-home market, but it will help homebuilders generate sales, Smith said.
“In the long run, it looks to be a positive situation, but it may take some time to shake out,” Smith said.
At the end of August, 22,710 homes were for sale, a 3 percent decline from July when 23,423 were listed. Inventory is down 6.7 percent from August 2007.
The amount of time homes are on the market is down sharply from August 2007. In August, 49 percent of homes sold within 30 days. A year ago, 28 percent of homes sold within 30 days.
In the condo and town-house market, 385 were sold in August, up 7.5 percent from the 358 sold in July, according to the Realtors group. That’s 35 percent higher than a year ago.
The median sales price of condos and town houses fell 9 percent from $135,000 in July to $123,000 in August. That’s down 35 percent from August 2007, the group reported.
Credits: In Business Las Vegas
Mortgage rates dropping after federal action to take over Fannie Mae and Freddie Mac help to spur housing interest in Nevada.
So says Rob Wigton of Minden, president of the Nevada Association of Realtors, whose agents are busier now. A check of online interest rates showed reasons for the following enthusiastic assessment from Wigton:
“We’re certainly thrilled. When you get to those thresholds, it certainly opens things up.”
Those thresholds are the difference triggered by rates plummeting below 6 percent coupled with housing inventory that has dropped 15 percent or more in price over the past couple of years.
Bankrate.com, an online mortgage site based in Florida, said the 30-year fixed rate mortgage dropped nationally by 40 basis points since Treasury Secretary Henry Paulson announced Sunday that the finances of Fannie Mae and Freddie Mac would be overseen by the federal government, making guarantees appear safe.
Translation of the financier terminology in the last paragraph: 40 basis points equals 4/10ths of a percentage point in interest, which translates to significant money over time; Fannie Mae is the nickname for the Federal National Mortgage Association; Freddie Mac is the Federal Home Loan Mortgage Association. The pair have $5 trillion in mortgages.
For the family that borrows, as Bankrate.com indicated Thursday, a 40 basis point drop means those getting a loan now will pay $43.11 less in each monthly payment, or more than $15,519 over the life of a 30-year mortgage.
People with housing on their minds know it. As Wigton put it: “We’re seeing a lot more activity this week.” Still he isn’t counting any housing deals before they’re hatched and says real estate won’t be out of the woods just based on lower home prices and a drop in rates. It will take stability from selling off excess inventory as well.
“Interest rates hopefully will stabilize,” he said, suggesting that if they reach the range of 5.5 percent and stick that would help considerably as inventory starts to dwindle.
Bankrate.com showed rates in the Reno-Carson City area Thursday were at 5.94 percent, under the 6 percent threshold that triggers interest among borrowers with sound credit and a hankering for a new home at a price well below the level of three years ago.
The 5.94 percent rate is 21 basis points below the Bankrate.com national level. Another Web site showed that Nevada’s 30-year fixed rate was 5.95 percent on average, down from 6.36 percent the previous week.
Credits: KRNV
Sales of existing houses rose last month, surpassing expectations, as buyers snapped up deeply discounted properties in parts of the country hit hardest by the housing bust.
However, the number of unsold properties hit an all-time high, the latest indication that the worst housing slump in decades is far from over. Prices nationwide are not predicted to hit bottom until early next year.
The National Association of Realtors reported yesterday that sales rose 3.1 percent to a seasonally adjusted annual rate of 5 million units, up from June’s downwardly revised rate of 4.85 million units. Sales had been predicted to rise by only 1.6 percent, according to economists surveyed by Thomson/IFR.
“The process of a recovery has begun,” said Joel Naroff, president of Naroff Economic Advisors. “It’s not going to be short and swift, but it’s begun nonetheless.”
But sales were about 13 percent lower than a year ago and prices were down dramatically. The median price for a house sold in July dropped to $212,000, down by 7.1 percent from a year ago.
And despite the third monthly sales increase this year, the number of unsold single-family homes and condominiums rose to 4.67 million, the highest number since 1968, when the Realtors group started tracking the data.
That represented an 11.2-month supply at the July sales pace, matching the all-time high set in April.
Until the inventory level is reduced to more normal levels, analysts say, the housing slump is likely to persist. The inventory level is being driven higher by a massive wave of mortgage foreclosures.
Between 33 percent and 40 percent of sales activity is coming from foreclosures or other distressed properties, estimated Lawrence Yun, chief economist at the Realtors group.
While buyers are pouncing on lower prices — especially in places such as California, Florida and Nevada — sales are sluggish in formerly stable states such as Texas.
“People are responding to lower prices,” Yun said, but there is “too much uncertainty” about the housing market’s future to mark a definite bottom.
In Las Vegas, sales were up 96 percent last month, after prices fell more than 25 percent to a median of $220,000, according to The Associated Press-Re/Max Monthly Housing Report, which analyzed house sales recorded by all real estate agents in 55 cities, regardless of company affiliation.
Sales in Los Angeles jumped 31 percent after prices fell 35 percent over the past year to a median of $335,000, according to the AP-Re/Max report.
In Miami, sales were up 9 percent while prices dropped nearly 10 percent to a median of $280,000. One of those sellers last month was Jennifer Del Pino, who unloaded her 3,600 square-foot Miami home to a buyer from Germany for $490,000.
She cut her asking price by $60,000, but sold her house in about a month.
“It’s kind of a relief for me,” she said.
Home sales tumbled in most big Northeastern cities last month — with only Passaic, N.J., showing a healthy jump in activity.
Sales of existing houses in the region declined nearly 12 percent in July from a year ago, the National Association of Realtors said. The median price in the Northeast was $278,700, down almost 5 percent from July 2007.
In the one bright spot, Passaic, sales jumped 38 percent over July last year. But the rapid sales pace could be stymied by glut of properties coming onto the market. The supply of unsold homes grew 32 percent to 10.6 months, and the median price slid 6 percent to $400,000.
In contrast, Pittsburgh posted the worst sales decline at 31 percent from July 2007. But prices offered a sliver of hope, dipping less than 1 percent to $132,000, the smallest drop in the region.
Foreclosures are leaving their mark in Providence. Nearly one of five sales in the area were distressed sales, said Ron Phipps of Phipps Realty in Warwick. The discounted properties are weighing down the market, where the median price fell by 13 percent last month to $234,900, the AP-Re/Max report showed. Sales there also slipped 9 percent in July.
“A lot of sellers are nostalgic for what was, so they’re disengaging from the market,” Phipps said. The supply of unsold homes shrank nearly 3 percent in July as a result.
In Boston, the supply of homes for sale declined markedly, signaling a possible turnaround in the offing. Judy Moore, a local agent with Re/Max Landmark, said the condo market already is showing signs of life.
Overall, Boston home sales fell 12 percent in July and the median price decreased 8 percent to $355,000, according to the AP-Re/Max report. While Moore expects August sales and prices to decline year-over-year, she thinks the drop in both will be less severe than July’s.
“It’s been fits and starts, but there’s always some activity going on,” Moore said.
Credits: Projo