The November residential real estate indicators for Southern Nevada were recently published by Home Builders Research and SalesTraq, two local industry research shops. In general the numbers are down, an altogether familiar pattern for the past several months.
In the new home category sales are off by 47.5% from last year and the median price declined 20.2% , to $271,228. The drop in the price is meaningful, as it now reached over 20% year over year, a moderately high number. Resale house sales decreased 42% and the price was cut back 10.5%, to $257,000. During the boom years in Las Vegas the new home prices were racing well ahead of the existing stock and now the reverse is taking place, the new homes having given up roughly double the amount of value in comparison to the resale sector.
According to SalesTraq, builders in November filed for only 343 new permits, a dismal total. For the future, though, that will translate into a fewer homes being built which will predictably lower the supply and moderate the price structure. That is exactly what this market needs to turn itself around, less inventory and pricing closer to the lagging median household income.
The once-thriving condominium conversion market has also suffered a significant downturn. Prices in this sector can go well under $200,000. In December of 2005 when the segment was cruising on all cylinders it sold over 1,000 condos and this November just 67 homes were closed. The lack of availability of subprime mortgage money for the marginal borrower and the disappearance of the investor have clearly put a crimp on the buyer traffic.
All in all, the news for buyers remain very positive as the marketplace offers them plenty of inventory and soft prices. Mortgage rates are still low, although the market continues to search for a higher level of confidence.