LAS VEGAS: THE RESIDENTIAL RECOVERY APPEARS TO BE UNDERWAY!

      Las Vegas' July housing data makes it easy to suggest that the residential market is on the verge of sizzling.

            But, as I have repeatedly noted in previous articles, one -- or two – or even three -- months do not make a trend. Still, July appears to give some credence to the idea that residential real estate is beginning to recover in Las Vegas.

            Here are the details:

 

            Surprisingly, the number of foreclosures in July was 15 less than the number in June (2,471). But, the number of foreclosures sold in the month totalled 2,759. In other words, foreclosure inventory declined for the fifth consecutive month.

            Available listings notched their 10th consecutive monthly drop to 11,905, the lowest number since December 2005.

            After reaching their peak of 579 in July 2007, the number of active subdivisions in Las Vegas accelerated their two year tumble to 272 – a figure not seen in this decade.      

            Perhaps the only negative in the inventory situation is that new home permits reached their highest level of the year in July: 452. That number is still 30% less than the same month last year.

 

            For the first time since February 2007, existing home prices increased. 

The median price of an existing home in July inched up .7% to $124,900. That may not seem like much, but to a market that has seen nothing but falling prices for nearly all of the last 30 months, it is a statistic to celebrate. And, because prices have been traveling in a narrow $1,000 range for the last three months, it suggests that existing home prices may be in the process of stabilizing. 

Foreclosures accounted for 59% of existing home closings in July, with a median closing price of $112,000. Non-bank owned homes boasted a median closing price of $140,000.

            The median price of a new home also rose in July, edging upward .5% from the previous month to $210,000. Looking back over the last three months, Las Vegas new home prices also appear to be in the process of stabalizing.

            Again, one or two or three months do not make a trend. But, these statistics are, at worst, a pleasant reversal what has been a monthly nightmare for Las Vegas real estate professionals.

 

            For the second consecutive month, existing home sales reached a record level. July’s existing home sales total of 4,675 is a 42.6% increase over the same month last year. 

            New home sales continue to stagnate, but July was only the third month this year to boast a total of more than 400 (409). Sales are 43% below the moribund levels of last year.

            The reason for lack of new home activity up to this point is simple: Despite a 31% decline over the last 19 months, the $105.44 average price per square foot of a new home is at a significant sales disadvantage to the $76.08 average price per square foot of an existing home.

 

            The third quarter is shaping up to be one of the most important periods in this economic/real estate cycle. The avalanche of foreclosures projected for July failed to materialize. The question is: Will the second wave of foreclosures impact the residential market as much as it does the commercial market?

            Even with all of these forward looking statistics, it is too early to declare this July the turning point. But six or seven months from now, we may be able to look back and say, “Wow, things got hot in July!”