Las Vegas Existing and Distressed Properties Sales Drop

by on cities

At the start of this year, the housing market in Las Vegas showed a downward trend in terms of existing and distressed properties sales and an upward trend for new home prices. Based on the Home Builders Research report, there were only 232 new home sales and 3,098 existing home sales, down from 240 and 3,111 respectively.

On the other hand, median sales price of new homes is higher by $5,693, at $208,145 compared to one year ago. The increase in said prices can be attributed to the growing consumer interest on new-home villages and subdivisions for the last couple of weeks. Several home building companies decided to hold grand openings of these subdivisions to show off their new houses and, essentially, compete with the cheaper Las Vegas foreclosed homes.

The growing traffic could indicate that consumers are ready to look at innovative products or, simply put, they just want to see something new for a change. Many home builders decided to suspend construction during the market downturn. In fact, only 232 permits were taken out during the first month of the year. Of course, this figure will rise as the spring season approaches, when more people are inclined to make home purchases.

Meanwhile, median home price for existing and distressed properties for sale dropped by $10,000, 8 percent less than a year ago. During the last 19 months, home prices have been swinging between $119,000 and $126,000. Looking at the entire picture, experts think home prices for these properties will further decline, even up to $103,500. But this trend will not remain long as many investors would stir up sales activity by snatching up these bargain houses.

The number of bank foreclosures in Nevada continues to put the state in the list of states with the highest foreclosures rate. Experts believe 2011 could end with the local market overflowing with many of these inventory homes. Short sale properties are fast becoming popular and accounted for about 20 percent of the total January home sales. They also sold at $120,000, higher than the $110,000 median price of non-distressed properties.

It is also likely there would be more short sales houses than bank foreclosure homes for sale in the market in the next months, considering that 70 percent of homeowners is underwater, owing more in mortgage debt than what their home is worth in the market. Most of these homeowners will look into a short sale as a way out of foreclosure.

If Freddie Mac and Fannie Mae decide to unload their inventory of distressed properties, it is likely that home prices would drop dramatically. But until then, the Las Vegas housing market will definitely show marked improvement in terms of home sales activity.