Las Vegas Area Home Sales See Biggest Jump in March in Six Years

Las Vegas Area Home Sales See Biggest Jump in March in Six Years

May 10, 2012

According to San Diego-based DataQuick, Las Vegas-area home sales rose to the highest level for in March in six years amid a record level of absentee purchases, the most new-home sales since mid-2010, and continued strength in the sub-$200,000 market. The median price paid for a home in the region edged up from February but fell short of the year-ago level by the smallest amount in a year and a half. In March, 5,020 new and re-sale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County). That was up 18.4 percent from the month before and up 1.4 percent from a year earlier.
A jump in sales between February and March is normal. On average, sales have risen 28.4 percent between those two months since 1994, when DataQuick’s complete Las Vegas region statistics begin. March sales were 2.0 percent above the average number sold during that month since 1994, and were the highest for a March since March 2006, when 8,486 homes sold.
In March, 4,426 homes resold (excludes newly built homes), down 1.8 percent year-over-year. That year-over-year decline was the first in 16 months.
March’s 594 sales of newly-built homes represented a 33.2 percent year-over-year gain, marking the ninth consecutive month to post an annual increase. It was the highest new-home total for a March since 2008, when 1,127 new homes closed escrow, and the highest for any month since June 2010, when 918 new homes sold.
Continuing a months-long trend, March sales were strongest in the lower price ranges. The number of transactions below $100,000 rose 5.6 percent compared with a year earlier and represented 41.6 percent of all deals, compared with 40.0 percent of all sales in March 2011. The number of March 2012 sales below $200,000 rose 2.4 percent year-over-year. March sales above $300,000 fell 3.3 percent compared with a year ago, while sales above $500,000 dropped 1.2 percent.
The median price paid for all new and resale houses and condos sold in the Las Vegas metro area in March was $115,000, up 2.7 percent from $112,000 in February and down 1.7 percent from $117,000 in March 2011. It was the second consecutive month in which the median rose month-to-month, but on a year-over-year basis the median has been falling for 18 consecutive months. However, March’s year-over-year dip was the smallest in that series. Last month’s median was 63.1 percent below the November 2006 peak of $312,000. The January 2012 median was $110,000 – the lowest since the median was also $110,000 in April 1994.
The median’s recent decline to levels not seen since the mid-1990s can be attributed to several factors: home price depreciation; robust sales of low-cost foreclosures; robust sales to investors, who mainly target low-cost properties; relatively low new-home sales (new homes tend to sell for more than resale homes); and higher-than-usual condo re-sales (condos tend to be the least expensive homes).
March's new-home sales represented 11.8 percent of all transactions, compared with a monthly average of about 28 percent of all sales over the last decade. March’s condo sales represented 18.8 percent of total Las Vegas sales, compared with a 10-year monthly average of about 14 percent.
An alternative home-price gauge—the median paid per square foot for resale single-family detached houses—held steady in March at $65, the same as the month before but down 7.1 percent from a year earlier. (This January’s $64 median per square foot was the lowest since at least 1994.) The March figure was 65.8 percent lower than the peak $190 paid per square foot in May and June 2006.
Absentee buyers—mainly investors and vacation-home buyers—purchased a record 51.2 percent of all Las Vegas-area homes sold in March. That compares with 48.2 percent in February and 49.9 percent a year earlier. Absentee buyers paid a median $95,000 in March, up from $90,000 in February and down from $99,750 a year earlier. Absentee buyers are those who indicated at the time of sale that the property tax bill will go to a different address.
Cash buyers purchased 54.4 percent of the Las Vegas-area homes that sold in March. That was up from a cash-buyer share of 52.9 percent of total sales in February and 54 percent a year earlier. The peak was 56.7 percent in February 2011. Cash purchases are where there is no sign of a corresponding purchase mortgage in the public record. March’s cash buyers paid a median $87,000, up from $84,500 in February and down from $88,450 a year earlier.
Distressed property sales—a combination of foreclosure re-sales and short sales—continue to make up close to two-thirds of the Las Vegas resale market.
Foreclosure re-sales—homes that had been foreclosed on in the prior 12 months—accounted for 48.9 percent of Las Vegas resale activity in March. That compares with 48.6 percent in February and 57.3 percent a year earlier. Foreclosure re-sales peaked at 73.7 percent of the resale market in April 2009. Last month’s figure was the second-lowest for any month since July 2010.
Short sales—transactions where the sale price fell short of what was owed on the property—made up an estimated 13.9 percent of the resale market last month. That compares with an estimated 14.8 percent the prior month and 11.6 percent a year ago.
In the wake of a new Nevada law that creates additional requirements for lenders trying to foreclose on properties, the number of notices of default (NODs) filed in Clark County has plummeted in recent months. In March, lenders filed 1,262 NODs, up 38.1 percent from the prior month and down 73.4 percent from a year earlier. The notice of default is the first step in the formal foreclosure process.
In March lenders foreclosed on 1,395 homes in the Las Vegas region, down 19 percent from the month before and down 58.1 percent from a year earlier. Between January and March this year, lenders foreclosed on 5,078 single-family house and condo units, down 39.1 percent from the same three-month period last year.

Originations, Residential, Marketing, Trends