Home prices in the US fell by 15.6%

 Las Vegas homes have reached a new median price not seen in many years. The median price of a Las Vegas home is hovering around the 140,000 mark. The real estate market in Las Vegas has been hard hit with foreclosures and short sales. A short sale is a pre foreclosure sale. The seller markets the property at current market value with an agent. The agent then negotitiates with the lenders to accept less than what is owed on the home. This enables homeowners to avoid foreclosure.

The Chicago-based realtors group National Association of Realtors reported that home prices fell by 15.6 percent from the previous year in the US. 

The realtors group reported that the biggest home price decline was in Cape Coral-Fort Myers metropolitan region where median home price dropped by 53 percent to $84,000 from the previous year.

 The second biggest home price decline, the National Association of Realtors said, was in Las Vegas where home prices dropped by 39.7 percent. One in every 85 households in Las Vegas received a foreclosure filing in July, this according to data aggregator RealtyTrac. Out of 230 metro areas tracked in July, the data aggregator said Las Vegas ranked No.5 in the metro foreclosure rate rankings.

 National Association of Realtors reported that the median price of existing single-family home in the US fell by $174,100–the most in record since 1979.

 The realtors group said home prices dropped in 129 out of the 155 metropolitan areas in the US from the previous year.

 Bloomberg reported that home prices are dropping even as economists forecast that the US is  recovering from the worst economic crisis since the 1930s.  

 According to the median of 53 forecasts in the monthly Bloomberg News survey, the US economy will improve by 2 percent or more in the next four straight quarters until June–the first to happen in more than four years. 

The National Association of Realtors reported that median price of existing home dropped by 9.7 percent in the northeast from the same period in the previous year to $246,000. Home prices dropped by 8.6 percent to a median of $146,800 from the previous year in the midwest. Home prices sank 10.3 percent to $158,600 in the south. In the west, home prices dropped by 26.6 percent to $212,600. 

Meanwhile, the biggest increase in home prices was in the Davenport-Moline-Rock Island area of Illinois and Iowa, where prices soared by 30.6 percent to $113,200 from the previous year. 

The second biggest increase in home prices was in the Cumberland metro area of Maryland and West Virginia where home prices increased 21.7 percent. The Elmira area in New York had the third biggest jump where prices increased by 11.3 percent.

$8.5 billion Las Vegas complex to showcase earth-friendly features

Developers of the CityCenter complex have pledged that the $8.5 billion, 18-million-square-foot complex will be the most earth-friendly thing to happen on the Strip, Reuters reported.

With this huge investment, this project has been closely watched, Reuters said. Amidst this huge investment, Las Vegas ranked No.5 in the US metro foreclosure rate rankings.

Las Vegas has been buffered from the lingering recession with income from convention travel, gaming and tourism, Reuters said.

A representative for the project told Reuters that sustainability has been the focus of the project from the beginning.

Las Vegas CityCenter aims to include 61-story, 4,004-room gaming resort; two non-gaming luxury hotels: the Vdara and the Mandarin Oriental; the Veer Towers residential building and a 500,000-square-foot retail and entertainment area. All these are expected to open late this year. Scheduled to open late next year is the 400-room luxury boutique hotel called Harmon.

Reuters reported that the project, which extends from Monte Carlo to the Bellagio properties, features the following earth-friendly features:
Specially designed water fixtures that cut as much as 39 percent of water used indoors and 60 percent used in landscaping, this in contrast to the water consumption at a conventionally built project of comparable size.

Energy savings is expected to be equivalent to the amount needed to power 7,700 homes. The exterior of the buildings include air-brows, reflective rooftops, specially coated windows and high-performance glass.

It features an 8.5 megawatt natural gas cogeneration plant that is expected to supply 10 percent of the heat requirement for the project.

The CityCenter project is a joint venture between the Infinity World Development Corp. and MGM Mirage. The Infinity World Development Corp. is a subsidiary of Dubai World, the corporation that manages the international investments of the emirate.

Reuters reported that financial disputes resulted to a lawsuit between Infinity World Development Corp. and MGM Mirage in the early part of this year. The lawsuit was however settled in spring with the joint venture partners agreeing to a new agreement and committing to the completion of the project to its target date.

The downturn of the real property market in Las Vegas has taken its toll on the local millionaires.

According to Capgemini, a consulting firm that publishes U.S. Metro Wealth Index, the percentage of Las Vegas millionaires decreased by 38 percent in 2008, second only to Orlando’s 42 percent. Phoenix was listed third, losing 34 percent of its millionaires.

In the national level, the number of US millionaires decreased by 18.5 percent in 2008, Capgemini added.

Millionaires are defined by Capgemini as those with $1 million or more in investable assets, excluding primary residences.

In the report of Capgemini, those millionaires who invested heavily in Las Vegas real estate have been badly affected. This, as housing prices decrease by more than 50 percent since the peak in 2006 and commercial property and land values have dropped as well.

Applied Analysis reported that home inventory in Las Vegas or the number of homes on the Multiple Listing Service has fallen during the fourth week of July to 12,939 or 89-unit decrease from the previous week.

The firm said home inventory decreased by 9,400 units or 42 percent in the previous year. Home inventory has not been this down since 2005, the firm added.

Applied Analysis reported that the units listed are less than number of pending sales. The Multiple Listing Service has 6,405 units listed as short sales and 13,650 units listed as contingent or pending.

In Las Vegas, medical offices performed best compared to the rest of the commercial market during the second quarter, this according to CB Richard Ellis.

The average vacancy rate of medical offices was down from 16.5 percent at the end of the first quarter to 16.1 percent at the end of the second quarter, CB Richard Ellis reported.

According to Bruce Follmer, medical office expert at CB Richard Ellis, landlords of medical offices offered increased tenant improvement allowances and free space to attract tenants.

Follmer added that medical office buildings fared best as the medical profession is very stable. He said office buildings near hospitals are preferred.

July home sales in Las Vegas second-best on record

Greater Las Vegas Association of Realtors reported that 4,602 homes, condominiums and townhomes were sold in Las Vegas last month. That’s down one-hundred from June but still the second-best showing on record, the association of realtors said.

Of the 4,602 homes, condominiums and townhomes sold in Las Vegas last month, the association of realtors said bank-owned foreclosure sales dominate. Bank-owned properties account for about 73 percent of all home, condo and townhomes sold in July, the association of realtors said.

In a statement, Sue Naumann, president of Greater Las Vegas Association of Realtors said, “We didn’t set another sales record in July, but we came close. This shows that the demand for homes in the Las Vegas area right now remains very strong.”

According to the Greater Las Vegas Association of Realtors, last month, the median price of single-family homes in July was $138,800; while the median price of condominiums and townhomes was $67,000. In contrast with the data from June, this represents a 0.9 percent decrease in the median price of homes and a 1.5 percent rise in the median price of condominiums and townhomes.

Greater Las Vegas Association of Realtors report also showed:
Median home price of $138,800 decreased by 36.9 percent from $220,000 in July 2008;

Median price for condos and townhomes was $67,000, a decrease by 50.4 percent from $135,000 the previous year;

Single-family homes sold last month was 3,738, a 1.2 percent decrease from 3,785 in June, but a 44.2 percent increase from 2,592 sales in July 2008;

Condos and townhomes sold last month was 864, a 5.8 percent decrease from 917 in June, but 141 percent increase from 358 in the previous year;

Single-family homes listed for sale last month was down 0.9 percent to 20,423, in contrast to 20,613 homes listed for sale in June; and

Condos and townhomes listed for sale was down in July, a 0.7 percent decrease from 5,416 in June to 5,378 in July.

1 in every 85 Las Vegas households received foreclosure filing in July

One in every 85 households in Las Vegas received a foreclosure filing in July, this according to data aggregator RealtyTrac. Out of 230 metro areas tracked in July, the data aggregator said Las Vegas ranked No.5 in the metro foreclosure rate rankings.

Zions Bank chief economist Jeff Thredgold reported that the continued rise of foreclosures contributes to the record plunge of home prices, which in turn contributes to the increase in short sales.

According to RealtyTrac, Cape Coral-Fort Myers, Fla. posted the highest foreclosure rate among the 230 metro areas tracked in July. The RealtyTrac report showed that one in every 64 households in Cape Coral-Fort Myers, Fla. received a foreclosure filing during the month of July, more than seven times the national average.

Three more cities in California followed in the July metro foreclosure rate rankings. These include Merced at No.2 whereby one in every 73 households received a foreclosure filing; and with Stockton and Modesto taking the next two spots whereby in each cities one in every 82 households received a foreclosure filing in July.

Three additional California cities followed Las Vegas in the No.5 spot. These include the cities of  Riverside-San Bernardino, Bakersfield and Vallejo-Fairfield. Fort Lauderdale, Fla. took the No.9 spot; while Phoenix took the No.10 spot in the metro foreclosure rate rankings.

In its July 2008 U.S. Foreclosure Market Report, RealtyTrac announced that foreclosure filings, which include default notices, auction sale notices and bank repossessions, were registered on 272,171 US properties during the month of July or 8 percent increase from June and a 55 percent increase from July 2007. RealtyTrac report also showed that one in every 464 US households received a foreclosure filing last month.

Survey finds more US home sellers reducing prices

One in every homes for sale in the US from June 1 to August 1 had their prices reduced at least once since being placed on the market, this according to the latest survey conducted by Trulia.com.

The Trulia.com survey showed that 24.4 percent of US homes for sale had their prices reduced in July, a  23.6 percent increase from the previous month.

According to CNN, properties sold through foreclosures and short sales are mostly sold at reduced price of at least 15% in contrast with traditional sales. 

The average price reduction was 10 percent from the original price or $40,173 average discount, the survey revealed.

The survey added that in the national scale, close to $28 billion has been reduced for the homes for sale on August 1. This number has soared by $700 million during the previous month, the survey showed.

The survey also showed that there has been a 25 percent price reduction on luxury homes or those homes priced $2 million or more.

The survey data further showed that non-luxury homes, those for sale less than $2 million, has seen a 25 percent price reduction from its original asking price.

Pete Flint, Trulia co-founder and CEO, told Reuters that one of the factors for the price reduction was competition, this as more inventory enters the market.

As a result of this price reduction, more and more Americans are buying homes, Flint said.

Flint added that homes with prices reduced are the ones which are selling the prevailing market.

The co-founder and CEO of Trulia told Reuters that he expects price reductions on luxury homes as inventory levels of luxury homes grow.

Trulia reported that cities which showed a significant increase in the reduction of prices of homes for sale include Fresno, California and Colorado Springs, Colorado for the period of June 1 to August 1.

Trulia added that the cities of Dallas, Texas and Las Vegas, Nevada showed a decline in the percentage of listings with price reductions for the same two-month period.

Condo prices in Las Vegas fell by 54.1%

CNN reported that condo prices in Las Vegas fell 54.1% compared with the second quarter in the previous year and dropped 11.7% between the first and second quarters of this year.

The median price of condo units in Las Vegas now stands at $66,400, CNN said. Nationwide, the news agency, said condo prices fell 19.8% year-over-year.

CNN added that the price drop can be  attributed to the increase of foreclosures and short sales. Nationwide, foreclosures and short sales represent 36% of all transactions during the quarter, CNN said.

Properties sold through foreclosures and short sales, the news agency said, are mostly sold at discounts of at least 15% in contrast with traditional sales.

CNN said that due to the sinking home prices, buyers were able to buy homes in places they could not previously afford.

According to the National Association of Realtors or NAR, out of the 61 metro areas surveyed, only four showed a year-over-year increase in condo prices. NAR reported that this increase in condo prices only happened in the following areas: Virginia Beach, where prices increase 2.8%; Wichita, Kan. (2%); Dallas (0.7%) and Colorado Springs (0.2%).

NAR added that the most expensive condo market was San Francisco, where the median price was $405,700, down 22.5% from the previous year.

The realtor association said prices of homes also sank, as median home prices dropped by a record 15.6% during the three months ended June 30, compared to the same period in the previous year.

In majority of metro areas; that is, 129 out of 155, median home prices dropped year-over-year, the realtor association reported.

In terms of home prices, NAR said the Cape Coral metro area in Florida recorded the largest drop decline: 52.8% or $84,000.

The realtor association added that the lowest priced home market in the US now is Saginaw, Mich., where the median home sold for $55,700 during the quarter, a 30.6% drop over the previous year.

 If you are looking to purchase a condo in Las Vegas, please call Jeff and Lee Ann Mix of i Realty. If you are facing foreclosure, Jeff and LeeAnn Mix can help you through a short sale of your home. A short sale is when your lender accepts less for the home than what is owed.

Rising unemployment placed downward pressure on real estate market

Loss of jobs, as well as the decrease in demand, placed downward pressure on Las Vegas real estate market, this according to Applied Analysis, a Las Vegas business advisory firm.

With the rising unemployment, Las Vegas leads the nation in foreclosure. 

The Greater Las Vegas Association of Realtors reported that 20,613 homes in Las Vegas, including foreclosures and short sales, are active or pending with offers. Industry observer Applied Analysis; meanwhile, reported that there are only 13,028 homes available for sale in Las Vegas.

According to Department of Employment, Training and Rehabilitation Chief Economist Bill Anderson, in the state of Nevada, 83,700 individuals lost their jobs over the year. Anderson said that in Las Vegas Metropolitan area alone, 60,000 individuals lost their jobs.

Anderson added that unemployment rate in June in Southern Nevada reached 12.3 percent, or nearly times two to the number in the previous year. Anderson said this marks the highest rate of unemployment in the history of Clark County. He said the sectors of construction and hospitality have been affected the most.

Applied Analysis reported that the rising unemployment and diminished demand pushed the apartment occupancy rate to an all-time low of 90.5 percent.

According to Whitney Tilson, principal of New York-based investment firm T2 Partners, the next wave of foreclosures will come from prime loans. Tilson said homeowners-borrowers will default on their loans due to job losses. Tilson added that the decline in home prices which left one-fourth of homeowners nationwide underwater–when the amount owed exceeds the current value of the home– will also drive homeowners-borrowers to default.

Data aggregator RealtyTrac reported that over 6 percent of the homes in Nevada; that is, one in every 16 homes received at least one foreclosure filing in the first half of 2009. RealtyTrac said close to 69,000 homes in Nevada received a foreclosure filing from January to June. This was a steep rise by 23 percent from the previous six months and an increase of 61 percent from the first half of 2008, the data aggregator said.

90% Las Vegas borrowers may find themselves underwater

Deutsche Bank reported that 90 percent of Las Vegas borrowers may find themselves underwater.

A homeowner with a mortgage may find himself underwater when the amount he owes exceeds the home’s current value.

At present, more than half of Las Vegans homeowners-borrowers are already underwater. Just as Las Vegans are already underwater and finding themselves surrounded by foreclosures, Las Vegas are selling their houses through short sales. 
 
In addition to Las Vegas, Deutsche Bank, reported that 90% of the borrowers in Fort Lauderdale and Miami, Florida; Merced and Modesto, California may also find themselves underwater. 

Nationwide, Deutsche Bank reported that close to half of US homeowners may find themselves underwater before the housing recession ends.

Underwater loans may rise to 48 percent, or 25 million homes, as prices drop through the first quarter of 2011, this according to Karen Weaver and Ying Shen, analysts in New York at Deutsche Bank.

As of March 31, Deutsche Bank said, 26 percent, or about 14 million properties in the US were already underwater.

The bank said borrowers will default due to  unemployment, divorce, disability, or other financial challenges. The bank added that even without such life events, borrowers may ‘ruthlessly’ or intentionally default.

According to Zillow.com, since June 2006, the median price of homes sold in Las Vegas has fallen more than 50 percent. Zillow.com said that 67 percent of Las Vegas homeowners are already underwater.  Eighty percent of homes that are underwater in Las Vegas were bought from 2005 to 2007, Zillow.com added.

A recent study showed that underwater Las Vegas homeowners are more likely to walk away.

According to the study by the University of Chicago Booth School of Business and Northwestern University, 17 percent of borrowers-homeowners  would default even if they could afford to pay their mortgage if the amount they owed is more than the value of the current value of their homes.

The study also found out that 26 percent of all mortgage defaults nationwide were intentional; that is, homeowner can still afford to pay.

Sales in luxury homes stalled

Gone is the time when sellers of smaller houses graduate into the million-dollar homes. Sellers of smaller houses are not moving up because most of these sellers are distressed sellers in short sales.

CNN reported that demand in million-dollar homes or luxury homes is specifically down in Las Vegas–a place where foreclosure is rampant.

Due to the low demand in luxury homes, the news organization reported that realtors are advising sellers to reduce their selling prices.

According to the National Association of Realtors, right now, luxury homes–those  priced more than $750,000–would take 16.8 months to sell, in contrast to about 14.5 months in the previous year.

CNN reported that the oversupply of luxury homes is caused by the following:
• First, buyers who earn more than $75,000 annually are not qualified to avail to the  government’s $8,000 tax credit for first-time homebuyers;
• Second, the loans for homes priced more than $417,000 remain tight; and 
• Finally, as an aftereffect, Americans are buying smaller homes.

CNN said there is a tax policy gap. While the government’s $8,000 tax credit for middle-income, first-time buyers aided in cleaning out inventories of small homes, wealthier buyers have not been afforded comparable credit, the news agency said.

According to Lawrence Yun, chief economist for NAR, mortgage laws passed early this year did not help the wealthier buyers as these buyers are not covered by Fannie, Freddie, or the FHA.

A survey conducted by the real estate agents of NAR showed that 73% of buyers decided not to buy luxury homes due to difficulties in getting credit.

According to mortgage-bond analysts from J.P. Morgan Chase, luxury homes prices may not bottom out until 2012, when prices will be down 60% from their peaks.