Mar. 01, 2007
Copyright © Las Vegas Review-Journal

Analyst sees little chance of sector rebounding this year

By HUBBLE SMITH
REVIEW-JOURNAL

Las Vegas mirrored the downturn in the national housing market as sales of both new and existing homes fell sharply in January.

New home sales fell to 2,052 in January, compared with 2,815 sales in the same month a year ago, Dennis Smith of Home Builders Research reported. It’s the lowest January since 2003 when only 1,541 new homes were sold in Las Vegas.

Excluding mid-rise and high-rise units, the number falls to 1,610. Panorama Towers led the month with 242 closings, followed by Manhattan with 81 and Platinum and Turnberry Towers with 59 each.

The median price of all recorded Las Vegas new-home sales in January was $334,945, a 10.3 percent increase from a year ago.

Nationally, new-home sales plummeted by 16.6 percent in January from the previous month, the Commerce Department reported Wednesday. That was the largest decline since January 1994, when sales slid by 23.8 percent.

The decline in January — much steeper than analysts expected — left sales at a seasonally adjusted annual rate of 937,000, the lowest level since February 2003, the U.S. figures show.

As sales cooled, so did home prices.

The median sales price of a new home — where half sell for more and half for less — dropped to $239,800 in January, down 2.1 percent from the same month last year.

In Las Vegas, the resale sector fell 25.6 percent in January to 2,423 recorded transactions, the lowest number for that month since 2001. Median price fell by $5,000, or 1.8 percent, to $280,000.

“We think this flat or below year-to-year comparison trend of resale prices will continue well into 2007,” Smith said.

With an inventory of nearly 20,000 homes for sale in Las Vegas and sales declining, home builders are cutting back on new permits for residential construction.

Las Vegas-based SalesTraq showed 1,002 new home permits in January, a 54 percent decline from a year ago. From September through January, only 4,422 new homes have been permitted.

“If we continue to see new home permits decline, will that impact the existing home inventory? The answer to that question is how much demand will there be in the second quarter,” SalesTraq president Larry Murphy said. “Watch new-home sales stats very carefully over the next few months to determine how good, or bad, 2007 will be.”

SalesTraq reported 2,135 new-home closings in January, down 26.2 percent, at a median price of $336,309, up 10.7 percent. Existing-home sales were off 14.3 percent at 2,770.

An article on Realtor.org said home sales are sluggish because prices are just too high for many buyers.

“Buyers are backing off — not because of a poor job market or high interest rates — but because the housing stock is out of their price range,” the article stated.

Dave Crete of Dave Crete & Associates GMAC Real Estate in Las Vegas said single-family home inventory is at its lowest level since July and represents less than eight months of supply. He counted 2,810 contingent and pending properties in escrow.

“The market continues to change and is not nearly as gloom and doom as everyone says it is,” Crete said.

The Associated Press contributed to this report.