Las Vegas Area May Home Sales
Las Vegas, CA – June 30, 2011 – (RealEstateRama) — Las Vegas region home sales held at a five-year high last month, rising modestly from both April and a year earlier as sales of distressed properties continued to account for nearly 70 percent of the resale market. Price measures moved little month-to-month but the declines from a year earlier steepened amid higher levels this year of foreclosure resales and sub-$100,000 transactions, a real estate information service reported.
In May, 4,570 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County) – the highest sales tally for a May since 2006, when 7,615 sold. May sales rose 1.8 percent from April and 1.7 percent from May 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 5.0 percent between April and May since 1994, when DataQuick’s complete Las Vegas region statistics begin. May’s sales total was 5.8 percent lower than the average number sold in May since 1994 – the result of exceptionally weak new-home sales last month. When new homes are excluded, the picture changes: Last month’s resales of houses and condos combined were nearly 28 percent above average for the month of May, rising 1.0 percent from April and 4.1 percent from a year earlier.
Total sales have risen year-over-year for five consecutive month, largely because of robust investor and cash-only purchases in the resale market.
In May, 53.0 percent of the Las Vegas-area homes sold were purchased by cash buyers. That was down from 54.0 percent in April and a record 56.7 percent in February, but it was up from 47.6 percent a year earlier.
The unusually high level of cash buyers reflects a combination of factors, including: Tighter lending standards that force some investors and other buyers to pay cash if they can; cash buyers’ ability to move to the head of the line with sellers when there are multiple offers (sellers like the speed and certainty of cash deals); a preference among some to invest their cash in real estate as opposed to competing investments; retirees who downsize, selling a more expensive property and paying cash for the retirement home.
Cash buyers in May paid a median $89,000 for a home in the Las Vegas area, down from $90,000 in April and $105,000 a year earlier.
Absentee buyers – mainly investors and vacation-home buyers – purchased 46.2 percent of all homes sold in May, down from 47.4 percent in April and a record 49.9 percent in March this year, but up from 40.9 percent a year ago. Absentee buyers paid a median $98,000 in May, down from $99,900 in April and $112,000 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.
Roughly 3 percent of the Las Vegas-area homes sold last month were bought by foreign buyers, based on a review of public property records, where a foreign address was available. Of those foreign buyers that could be identified, nearly 72 percent were from Canada and 8.2 percent were from Australia. Buyers from Hong Kong, Israel and France each accounted for 3 to 4 percent of the sales where records indicated a foreign buyer. These buyers paid a median $120,000 for resale houses, $65,000 for condos and $128,000 for newly built homes.
The heavy presence of cash buyers and other investors, with their focus on lower-cost homes, helps explain why 40.1 percent of May sales were for under $100,000. That’s up from 39.1 percent in April, 30.1 percent a year ago and 33.0 percent two years ago.
The median price paid for all new and resale houses and condos sold in the Las Vegas metro area in May was $117,000, the same as in March and April, and down 13.3 percent from $135,000 a year earlier. It was the eighth consecutive month in which the median fell year-over-year, and the magnitude of the decline was the highest in since the median fell 17.2 percent year-over-year in February 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.
The March, April and May median of $117,000 marks the lowest for any month since the median was $113,000 in October 1995, and it’s 62.5 percent below 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).
May’s new-home sales were the second-lowest for that month (behind May 2009) since at least 1994, while sales of existing (not new) condos last month were the highest for a May since 2005. Resale condos represented 20.5 percent of May sales, compared with a monthly average of 13.2 percent of sales over the past decade.
An alternative home price gauge – the median paid per square foot for resale single-family detached houses – slipped to $69 in May, down from $70 in January, February, March and April, and down 11.5 percent from a year earlier. May’s median paid per square foot is the lowest since it was also $69 back in March 1995. May’s figure was 63.7 percent below the peak $190 paid per square foot in May and June of 2006.
In May, 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 up from 41.2 percent in April but down from 50.5 percent a year earlier and a peak of 55.1 percent in September 2008.
Distressed sales – the combination of sales of foreclosed homes and “short sales” – continued to dominate, representing 68.0 percent of the resale market last month.
Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 54.9 percent of the Las Vegas resale market in May. That was down from 55.7 percent in April but up from 49.5 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 13.1 percent of Las Vegas-area May resales. That compares to an estimated 12.8 percent in April, 16.5 percent a year ago, and 6.4 percent two years ago.
The number of homes that lenders foreclosed on in the Las Vegas region in May increased from both April and a year earlier. Lenders foreclosed on 3,818 single-family house and condo units last month, up 5.2 percent from April and up 41.4 percent from a year earlier. Last month’s tally was the highest for any month on record, eclipsing the prior peak of 3,718 foreclosures in February 2009. The figures are based on the number of Trustees Deeds filed at the county recorder’s office.
During the first five months of this year, 15,787 house and condo units were foreclosed on, up 36.4 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.
Las Vegas-Paradise, NV
Las Vegas-Paradise, NV
Number of sales May-10 Apr-11 May-11 YOY %Chng
Resale houses 3,069 3,176 3,196 4.10%
Resale condos 897 915 935 4.20%
New homes 527 399 439 -16.70%
All homes 4,493 4,490 4,570 1.70%
Median sale price May-10 Apr-11 May-11 YOY %Chng
Resale houses $135,000 $125,000 $123,000 -8.90%
Resale condos $73,500 $61,000 $65,000 -11.60%
New homes $198,000 $190,000 $189,028 -4.50%
All homes $135,000 $117,000 $117,000 -13.30%
Source: DataQuick/DQNews.com
Media calls: Andrew LePage (916) 456-7157