Nov. 30, 2006
Copyright © Las Vegas Review-Journal

New-home closings in LV down 22 percent during month

By HUBBLE SMITH
REVIEW-JOURNAL

Sales of new homes fell in October by the largest amount in three months, a fresh sign of the cooling taking place in the once-sizzling housing market.

The Commerce Department reported Wednesday that new-home sales totaled 1.004 million at a seasonally adjusted annual rate, a 3.2 percent decline from September. That was the largest drop since July, when home sales plunged by 9.2 percent.

Home prices, meanwhile, rose in October, after falling in September.

The median price of a new home sold in October was $248,500, up 1.9 percent from the same month a year ago. The median price is where half sell for more and half sell for less.

The 1.004 million pace of sales logged last month was slightly weaker than the pace of 1.05 million economists were forecasting.

Sales fell in all parts of the country, except for the West, where they rose.

In Las Vegas, local research firm SalesTraq reported 2,581 new home closings in October, down 22 percent from the same month a year ago. It was the fourth straight month of declining sales. For the year, new home sales total 29,646, off 3.6 percent from 2005.

New home prices, buoyed by the growing high-rise market, reached $330,000 in October, an 11.6 percent gain from last year.

October’s housing statistics suggest Las Vegas is at or near the bottom of its negative cycle, said Steve Bottfeld, a real estate consultant with Marketing Solutions.

“The future seems clear,” he said. “October is not the end of the buyer’s market in Las Vegas. But October data does tell us that the Las Vegas housing market is much closer to the end of the buyer’s market than most people believe.”

In the Northeast, sales fell 39 percent, the steepest drop since January 1996. In the Midwest, sales dropped 5.6 percent and in the South, they slipped 1.7 percent. In the West, sales rose 3.2 percent.

At the current sales pace, it would take seven months to exhaust the supply of unsold homes. That’s up slightly from a supply of 6.7 months for September.

The cooldown in the housing market figured prominently in the national economy’s 2.2 percent growth rate logged in the late summer, the slowest since the end of last year.

Builders cut spending on home building at an 18 percent annual rate, the most in 15 years, the government said in a separate report. That sliced 1.16 percentage points off third-quarter GDP, the most in nearly 25 years.

The Associated Press contributed to this report.