Home sales, median prices rise in valley, according to the GLVAR

The good news that Single-family home sales continued to post big numbers in October and median prices rose for the second straight month, the Greater Las Vegas Association of Realtors reported Monday.

There were 3,535 home sales during the month, a 5.3 percent increase from September and a 30.1 percent increase from the same month a year ago.

The median price climbed to $139,100, up from $138,000 in September and from $135,500 in August. It’s down 26.8 percent from a year ago.

Inventory remained steady at nearly 21,000 units, though most of the listings are contingent or pending sale, the Realtors group said. Only 8,075 units are available without offers.

The recent extension and expansion of the federal tax credit will probably keep home sales strong in the coming months, association President Sue Naumann said.

“This has been a big boost to our economy and our local housing market,” she said. “I think we can see the increased values more because of the $8,000 homebuyer tax credit and the extension of that has really helped the market quite a bit. People were getting frantic wondering if they were going to be able to close before the deadline, so that gives a little bit of breathing room for everyone.”

Realtors across the country are happy to see a tax credit of up to $6,500 extended to first-time buyers and also to “move-up” buyers, Naumann said.

Home prices in Las Vegas are being dragged down by foreclosures, which have a median price of $116,900, according to Las Vegas-based SalesTraq research firm.

Naumann said the percentage of bank-owned home sales declined to 64.5 percent in October, compared with 67 percent in September.

Recent data show the dismal housing market making a turnaround, but there are still supply and demand issues that will hamper the recovery, said Whitney Tilson of T2 Partners investment firm in New York.

Low interest rates, falling home prices and the first-time homebuyer tax credit have all contributed to a seasonal upturn in housing. However, total inventory is triple what’s actually being reported, Tilson said. He estimates there are twice as many homes in foreclosure or near foreclosure yet to be listed for sale with a wave of losses still to come on prime loans and jumbo loans.

“The rebound has been stronger than we’ve anticipated,” Tilson said. Still, he remains confident that this is the “mother of all head fakes.”

Statistics from the Greater Las Vegas Association of Realtors are based on data collected from the Multiple Listing Service and do not necessarily account for sales by owners, homebuilders and transactions not involving a Realtor.

Contact Michael Campbell from Keller Williams if you have any Real Estate Questions at 702-277-4605

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 For any information about housing in the LAs Vegas Market, please contact Michael Campbell from Keller Williams  @ 702-277-4605 or visit www.campbellrealestatelv.com 

Nationwide, housing prices have their ups and downs

Forrest Barbee is convinced he is reliving the 1849 Gold Rush.

Barbee, a residential real estate broker with Prudential Americana Group in Las Vegas, sees a constant stream of prospectors hoping to strike it rich snapping up homes on the cheap.

Now, a new study reveals fresh data on the downward spiral that spurred the buying bonanza, tracking the city’s three-year journey from expensive to affordable.

Coldwell Banker Real Estate’s 2009 Home Price Comparison Index placed Las Vegas squarely in the middle of the nation for housing affordability, with an average price of $213,120 for a 2,200-square-foot property with four bedrooms, 2.5 baths, a family room and a two-car garage.

Compare that to an average sales price of $361,250 in 2006 and $359,500 in 2005. Not only have local prices dropped precipitously from their bubble days, today’s average approaches the preboom 2003 average of $204,975.

“This is true affordability,” said Bob Hamrick, chief executive officer of Coldwell Banker Premier Realty in Las Vegas. “For people who are up-and-coming in the world and making income, this is an absolutely tremendous buying opportunity.”

Barbee said roughly 42 percent of his closings each month are cash transactions. The high cash volume comes partly from the number of investors, and partly from the large proportion of foreclosure properties in need of so much rehab that banks won’t lend on them, he said.

Grayling, Mich., ranked as the nation’s most affordable market, with an average price of $112,000. La Jolla, Calif., topped the roster of priciest communities, with an average of more than $2.1 million.

About a third of the markets surveyed boast an average price below $200,000, the highest number in the past five years. Nationally, prices are down 30 percent from their peak in mid-2006.

For homeowners looking to move up, though, it’s a buying opportunity only if they can sell their existing property. And that’s where consumer frustration dwells in today’s market, Hamrick said.

The Coldwell Banker numbers compare move-up homes — properties for buyers who already own their first place. The market there is struggling, because owners don’t have the equity that would make a sale and a subsequent move-up possible.

But the first-time homebuyer tax credit of up to $8,000 has spurred sales of homes in the lowest price ranges, allowing sellers to become move-up buyers. Buyers are getting more for their money because of low prices and attractive mortgage rates.

The newest Coldwell Banker figures also show a striking drop in the affordability divide between Reno and Las Vegas.

Reno has always claimed higher home prices than Las Vegas has experienced. But the difference has fallen big-time. Reno’s average price was more than $80,000 above the Las Vegas average in 2004 and 2005, but that discrepancy fell to $59,189 in the latest Home Price Comparison Index, an indication Reno’s housing market has taken at least as bad a beating as the real estate market in Las Vegas has. Plus, Reno is even closer to its preboom average. It’s at $272,309, almost even with $270,424 six years ago.

“I don’t think any part of the state has been completely insulated from the upside-down market,” Barbee said.

Known as a solid second home market, Grayling took a hit after the troubled economy, particularly the U.S. auto industry, led owners to sell off property in their recreation destinations.

Sales lagged until recent months, and prices are starting to stabilize at affordable levels, said Laurie Jamison of Coldwell Banker Cornell Realty in Grayling. For about $200,000, a buyer can get a four-bedroom home on the AuSable River.

Joining Grayling in the five least expensive markets were Akron, Ohio, with an average price of $121,885; Fayetteville, N.C. ($130,875); Canton, Ohio ($131,867); and Detroit ($132,000).

La Jolla residents are paying a premium for its proximity to a big city, access to the Pacific Ocean and sunny weather. Other California markets like Beverly Hills and Palo Alto have similar qualities, and also are in the study’s five most-expensive markets.

While La Jolla also experienced a slight downturn, the area has seen sales improve by about 6 percent year-over year, said Rick Hoffman, president of Coldwell Banker San Diego.

California claimed eight of the top 10 most expensive U.S. housing markets. Completing the top five were Beverly Hills ($1,981,750); Greenwich, Conn. ($1,519,250); Palo Alto ($1,489,726) and Santa Monica, Calif. ($1,460,912).

California also had the largest difference between its most and least expensive markets. Lancaster, Calif., had an average sales price of $165,205, more than $1.9 million lower than La Jolla.

Oklahoma had the smallest difference, with about $9,400 separating Oklahoma City ($164,250) and Tulsa ($154,800).

For buyers wondering what a 2,200-square-foot house with four bedrooms, 21/2 baths and a garage would cost overseas, Coldwell Banker surveyed 57 markets in 29 countries.

The most expensive market is Singapore, where the sample home averages $1.9 million. The least expensive is Salinas, Ecuador, on the Pacific coast. The average price of the sample home is about $69,000.

The Associated Press contributed to this report.

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For More Information about Las Vegas Real Estate, Please contact Michael Campbell From Keller Williams at 702-277-4605 

No doubt, a big tax break for first-time homebuyers is good politics.

The $8,000 tax credit, enacted this year when Congress passed the $800 billion stimulus program, helps families looking to buy a house for the first time, as well as real estate agents and developers, who are ailing in the face of the worst housing market since the Depression.

Nevada more than just about any other state could use help for its beleaguered construction industry; unemployment in construction in Clark County has climbed into the high 20s and could reach 50 percent this year, according to labor union officials.

So it’s not surprising that Nevada’s congressional delegation has signed on to a plan to extend the credit and even make it more generous.

“It’s working,” says Rep. Dina Titus, the 3rd District Democrat. “You can see the positive impact of it. It really is stimulating the economy, helping Realtors and developers and homebuilders and individual homebuyers.”

Although the politics are a surefire winner, especially here in Nevada, some economists across the political spectrum question whether the tax credit is good policy.

“It’s terrible policy,” says Mark Calabria of the libertarian Cato Institute.

“It’s awful policy,” says Andrew Jakabovics, associate director for housing and economics at the liberal Center for American Progress. “It’s incredibly expensive. It’s not well targeted.”

Home sales have risen dramatically in the past year, but most economists don’t attribute the increase to the tax credit. August single-family-home sales in Southern Nevada, for instance, hit 3,229, up more than 25 percent from a year earlier.

But economists attribute most of the rising sales to the plunge in prices, not the tax credit. The median sale price of single-family homes was off more than 35 percent from a year earlier.

“A heck of a lot of people would have bought the house anyway,” says Ted Gayer, an economist at the Brookings Institution.

According to an estimate by the National Association of Realtors, of the 2 million new homebuyers since the credit was instituted, 350,000 say they would not have bought a house without the tax break.

“We paid $8,000 to at least 1.5 million people to do something they were going to do anyway,” Jakabovics says.

The tax break, due to expire at the end of November, is on track to cost $15 billion, twice what Congress had planned. In other words, it will cost $43,000 for every new homebuyer who would not have bought a house without the tax break.

Gayer also questions whether moving people from renting to owning is really all that useful:

“Sure, the people in my rental house buy the empty house next door. Then the house next door is no longer vacant, but my rental property is.”

Economists derisively call this rush to get people to buy homes “reinflating the bubble.”

Government policy for decades has favored owning over renting because policymakers always believed homeownership created stable neighborhoods and offered a safe investment for the middle class.

Plus, as Calabria notes, “we give homeowners massive subsidies because they vote more often.” For Calabria, the policy amounts to taking money from the pockets of renters and stuffing it into the pockets of owners, and to robbing young Americans because it is adding to the national debt, which will have to be repaid eventually.

The housing bust has called the long-standing policy of favoring homeownership into question, as millions of Americans owe more on their homes than they are worth, leaving owners trapped and unable to move to another city to find a better job.

Economists say even with brisk sales of late, encouraged in part by the tax credit, the real problem — excess supply of housing stock — remains.

Economists say the glut of housing can be mitigated only by creating more households, and, thus, demand for housing.

A survey by respected pollster Peter Hart for the AFL-CIO found that one in three workers younger than 35 lives with his parents. With young workers living with Mom, apartment vacancies hit a 22-year high nationally during the second quarter and climbed to 9.5 percent in the Las Vegas Valley, according to Applied Analysis, an economics research firm.

The tax credit is one, albeit very expensive, way to create more households, but rental vouchers to get people out of their parents’ basements should also be considered, economists say.

Economists also question whether more money could be used to lower monthly mortgage payments.

Finally, they say the Federal Reserve should keep interest rates low, which would guarantee affordability for the life of a loan.

Walter Molony, a spokesman for the National Association of Realtors, counters that without the credit, sales would have been 6 percent lower, which would have pushed prices down further and encouraged more people to walk away from their homes.

With so many new foreclosures every month, buyers are needed to soak up the new inventory, he says.

Finally, Molony says, with every home purchase, there’s an additional $63,000 pumped into the economy, as buyers tend to make purchases after the sale, on big-ticket items such as carpet and appliances.

Andres Carbacho-Burgos, an economist for Moody’s Economy.com, said that the tax credit might have had some effect in boosting demand.

Economy.com expects home prices in Nevada to decline for three more quarters.

Indeed, some economists think the situation is so dire that the shock therapy of the tax credit, even if expensive and inefficient, is worth it. Elliott Parker, an economist at the University of Nevada, Reno, calls the tax credit a “blunt instrument” but said anything that encourages confidence and convinces potential buyers that we’ve hit bottom can be defended as sound policy.

Housing and construction have historically led the U.S. out of recession in every single one since 1960, and some economists worry that until that sector returns, the recovery will be tepid at best.

Whatever the arguments, an extension of the tax credit is gathering momentum. The entire Nevada delegation supports it, for instance.

And as with the wildly successful — and expensive — “cash-for-clunkers” program, the visible increase in home sales will likely encourage Congress to extend the break, especially as unemployment and foreclosures keep rising.

As Sen. John Ensign said last week on the Senate floor in support of the measure, “Clark County, where Las Vegas is, has over a 13 percent unemployment rate. I don’t think folks living there think the recession is over.”

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HOUSING: Race is on to qualify for credit

First-time homebuyers hitting market before tax break expires, observers say

FOR MORE INFORMATION ABOUT THE LAS VEGAS HOUSING MAREKT, PLEASE CONTACT MICHAEL CAMPBELL FROM KELLER WILLIAMS AT 702-277-4605 or visit my website at: www.camppbellrealestatelv.com!

Las Vegas Realtor David Brownell is telling first-time homebuyers they need to be under contract within the next 30 days to take advantage of the $8,000 tax credit set to expire Dec. 1.

The tax credit, authorized by the American Recovery and Reinvestment Act of 2009, is fully refundable for taxpayers who have not owned a home in the past three years.

Most first-time buyers use Federal Housing Administration loans, which accounted for only 28 percent of home sales in August, Brownell said. It’s unfortunate that banks aren’t focused on this group with time running out on the tax credit, he said.

“Many first-time buyers are scrambling to get an offer accepted,” Brownell said. “You have all these first-time homebuyers out there and if they don’t get a home before Nov. 30, what if they say, ‘I’ll just keep renting.’? This is getting first-time homebuyers off the fence.”

To claim the refund, the close of escrow and transfer of title to the new homeowner must be recorded no later than Nov. 30. A typical home sale transaction takes about 30 to 45 days to complete.

“It takes a little longer than it used to,” said Sue Naumann, president of Greater Las Vegas Association of Realtors. “I’m working with three or four groups looking to get the tax credit. Since housing is affordable now, we’re working diligently to find a home to take advantage of this.”

Brownell of Keller Williams Realty wants to see banks follow the tack of Fannie Mae with foreclosed homes. That is, for the first 15 days of the listing, they take offers only from owner-occupants, or people who will be making the home their primary residence. Investors can come to the table with cash offers after that, he said.

In August, 42 percent of escrow closings were cash transactions, 23 percent were conventional loans and 5 percent were Veterans Affairs loans, Brownell reported. Also, 80 percent of the closing prices were less than $200,000 and 12 percent were between $200,000 and $300,000.

Short sales, or homes sold for less than the mortgage owed, represented 12 percent of all resale closings in August, reported Applied Analysis, a Las Vegas-based business advisory firm. That’s up from 8.8 percent a year ago.

Although short sales in Las Vegas are not significant in absolute numbers (545 in the past month), they represent the largest share in recent history. Also, nearly 7,800 short-sale units are under contract, either contingent or pending lending approval, but have yet to close.

“Short sales aren’t even a consideration in this unless they already have approval,” Naumann said. “They take 60 to 90 days or more for approval and then you have to work through the normal escrow.”

Buyers are better off making an offer on a bank-owned home or with an individual seller who’s capable of making a timely decision and getting it into escrow, she said.

Not all short-sale contracts will obtain lender approval, so financial institutions clearly play a significant role in the number of transactions, Applied Analysis principal Jeremy Aguero said.

With median existing home prices in Las Vegas less than $135,000, an $8,000 tax credit is a huge consideration for individual buyers, he said.

“A lot of those buyers may fail to qualify or may not have the incentive to close once that expires,” Aguero said. “If you look at the ramping up of existing sales, it’s a very close correlation with the government program. Of course, it has to go away sometime. It can’t last forever.”

Naumann said the Realtors association has lobbied Sens. Harry Reid, D-Nev., and John Ensign, R-Nev., and U.S. Rep. Shelley Berkley, D-Nev., and they all suggested they’re pushing for an extension of the tax credit, though nothing has come of it yet and there’s no guarantee anything ever will.

National Association of Realtors lobbyist Jerry Giovaniello said there was at least a 50-50 chance of getting Congress to extend the tax credit past Dec. 1 when he visited Las Vegas in July. He’s also pushing to raise the tax credit to $15,000 and expand it to all homebuyers, though that will take a lot more work, Giovaniello said.

“We are working hard on extending the tax credit,” Giovaniello told the Review-Journal recently from Washington, D.C. “Many people in the pipeline might not get closed on the purchase of their home by Nov. 30 when it ends.”

The group is urging members to send a message to Congress to extend the date. Giovaniello said there are “good signs” on Capitol Hill and that Reid has expressed interest in the issue.

Homebuyer interest and housing sales increased almost as soon as the ink was dry on the tax credit legislation. Lower prices and interest rates appeal to consumers, but it’s been the tax credit that has attracted people to open houses and to homeownership, Realtors said.

Existing-home closings in Las Vegas increased 63 percent through July to 26,038, local research firm SalesTraq reported.

Aguero said any further increase in Las Vegas home sales depends on “banks coming to play.”

“Certainly, the premature expiration of those (tax) incentives will have negative effects nationwide and more so in Nevada,” he said.

Another threat to homebuyers is the tenuous status of FHA financing, which will likely be the next shoe to drop, California-based real estate consultant John Burns said.

Claims against the FHA insurance fund have climbed, with roughly 7 percent of all FHA-insured loans now delinquent, and the fund is likely running dry, he said. According to a report from mortgage finance experts, FHA will not meet its minimum requirement as of its fiscal year-end.

This financial reality will come to light about the same time that other market forces run out of steam — just as the $8,000 tax credit expires and more of the stalled real estate-owned homes now held on banks’ balance sheets come to market.

Although most observers believe that Congress would support the FHA if necessary, Burns wonders whether FHA officials will be under pressure to continue tightening their lending policies, which now allow 96.5 percent loan-to-value mortgages for people with 600 FICO scores. Already, FHA has contracted its own standards to require a 10 percent down payment for those with credit scores below 500.

“The culmination of all these factors means housing could see another leg down later this year or early next year,” Burns said.

Contact Michael Campbell from Keller Williams Realty at 702-277-4605

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 There are many buyers and sellers are finding out that in today’s down market, houses aren’t worth what they thought they were. At least not in the eyes of appraisers, the professionals hired to tell lenders what the places could sell for on the open market if borrowers failed to make their payments.

In a perfect world, the value of a property is what a ready, willing and able buyer will pay for it. But the housing market is imperfect at best. For one thing, values rise and fall with the tides — maybe not on a daily basis but over a period of several months. And in the appraisal world, valuations are based on previous sales, so appraisers are always a step or two behind the market — going up and going down.

Moreover, the art of appraising is just that — an art, not an exact science. And even though those who practice it hold the fate of sellers, buyers and refinancers in their hands, they are not gods. Indeed, they are fallible, just like everyone else.

That’s important to keep in mind, especially in today’s world of housing finance, where more and more lenders are turning to third-party appraisal-management companies to hand out assignments instead of hiring appraisers directly, or allowing loan brokers from ordering appraisals directly.

The idea is to protect appraisers from pressure to inflate their valuations. That’s the theory, anyway, and it may indeed stop any schemes to compel appraisers to bump up their findings. But at the same time, many sellers contend that the use of such middlemen has caused all sorts of problems.

With that in mind, here’s how to appeal your appraisal if you honestly believe it is too low.

Start by finding out whether yours is a full-blown appraisal or an electronic one. More lenders are using automated valuations, particularly in the home-equity sector, to speed up the process and cut costs. But they are notoriously inaccurate.

Automated valuation models are good enough to give lenders a 30,000-foot view of local housing values. But they just won’t do on a house-by-house basis. Neither will so-called drive-by appraisals in which the appraiser never leaves his car to actually go inside. Rather, he simply drives by the place to make sure that it is really there.

If your lender is relying on an AVM or a drive-by, ask to have your place valued by a human being who actually looks at your specific house, compares it to others in the neighborhood, checks out the community, and does all the things an appraiser is supposed to do. In most cases, lenders will agree, especially if you are willing to write the check to cover the several hundred dollars that a full appraisal will cost.

If a real, live appraiser is responsible for a valuation you think has come in too low, your appeal becomes a little more problematic — if only because you are dealing with human beings who have feelings. So to keep your appeal from becoming an exercise in futility, do it with as much finesse as possible.

Of course, you can always ask for a second opinion from another appraiser. But you’ll have to pay the freight a second time, too. Moreover, to stand any chance of winning your point, the second valuation must be more than 5 percent higher than the first. In the appraisal game, anything less is considered an acceptable difference.

Besides, even if the second appraisal is far above the first, it’s the lender, not you, who gets to pick the appraisal on which the loan is based.

While this may seem as if the cards are stacked, you can even the playing field by suggesting, firmly but nicely, that the appraiser assigned by the lender erred and requesting — again, nicely — that he or she be asked to take a second look. And you can do some of the appraisal work on your own. It may take time and effort, but it could pay off in the long run.

Your job is to search out comparables that the appraiser may have missed the first time around. A comparable is a property of the same size and style in the same location and with the same features as the one being appraised. To determine a fair-market value for the subject property, an appraiser looks for recent sales of several comparable properties.

Normally, they limit their search for comps to the multiple-listing service operated by the local real-estate association. And when they do that, they may not be looking at the entire market.

Even though enough sales pass through the typical MLS that an appraiser should have little trouble finding comparables, not every deal goes through the system. Independent brokers who are not MLS members make many of them, and some are made without the help of an agent, MLS member or not. Then, too, some MLS members don’t put all their listings into the system.

As a result, in some major markets as many as half of all transactions occur outside the MLS. Your job is to find them. And to do that, you’ll have to comb the land records at the local courthouse.

If you have any questions about REAL ESTAATe in LAs Vegas, Nevada, feel free to contact me at 702-277-4605

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Sales up as prices competitive with foreclosures

With foreclosure sales continue to drag the median existing home price down in Las Vegas, the new home market is starting to show progress, housing analyst Dennis Smith of Home Builders Research said Wed.

The median resale price dropped $3,000 in August to $122,000 and is down 39 percent from a year ago, Home Builders Research reported.

Sales of existing homes declined to 3,833 closings in August from 4,371 in July. Resales for the year are up 52 percent at 28,468 units.

Smith said he’s hearing that Realtors still have interested buyers and investors looking at real estate-owned, or bank-owned properties. However, good homes are difficult to find and they continue to have multiple offers written on them, he said.

That’s driving some buyers to look at new homes, many of which offer floor plans under $100 a square foot, competitive with foreclosures.

“After looking at foreclosures, Realtors will take their clients to view the possibilities in the new home segment,” Smith said. “It is usually a much easier escrow, less stressful than going through foreclosed houses and, in certain instances, they get a higher commission.”

Home Builders Research reported 426 new-home sales in August, compared with 407 sales in the previous month. New-home sales have decreased 57 percent to 3,167 for the year.

The median price of a new home rose for the third straight month to $210,00. It’s up $3,451, or 1.7 percent, from July, and down $46,000, or 18 percent, from a year ago.

Smith said the new home segment is moving forward, albeit very slowly.

“Forward, meaning stabilizing,” he said. “To most in the industry, or those who used to be in it, it couldn’t be much worse. Our read from home builders is they feel stuck in a vacuum and can’t find a way out.”

Homebuilders have cut overhead more than anyone thought was possible, Smith said. He knows people who were let go after 20 years or more working for homebuilders, contractors, title companies and mortgage lenders.

Larry Murphy, president of Las Vegas-based SalesTraq, said the summer sales rush is coming to an end, and he wouldn’t be surprised to see prices come down another $2,500 to $3,000.

“We seem to have a steady supply of repos coming on the market every month,” Murphy said. “I said earlier this year we could hit $100,000 (median price) and we’re not that far away.”

The housing market in California is also stabilizing, according to a September survey of 269 home building executives by John Burns Real Estate Consulting. That’s usually a good sign for Nevada.

“For the first time since we began our home builder executive survey 15 months ago, more California builders reported raising prices than those who reported prices were flat or down,” said Jody Kahn, vice president of Irvine, Calif.-based John Burns Real Estate Consulting.

The survey’s commentary underscores the positive effect of federal intervention, though most builders also expressed concern about their prospects for the next six months as the Nov. 30 expiration of the federal tax credit approaches.

Other challenges cited include competition from foreclosures, appraisal problems, lack of job creation and a void in financing for future projects.

Robyn Yates, broker and owner of Windermere Prestige Properties in Henderson, said Fannie Mae loans are getting more difficult for approval. Tougher underwriting guidelines are geared to prevent mortgage fraud, she said.

“It’s just more of the same restrictions and making sure people really qualify,” Yates said. “It’s one more indication that it’s going to be challenging for buyers to get a loan.”

The biggest change for Las Vegas homebuyers is verification and documentation of tip income, she said. Also, stock options can no longer be counted for reserves and relocating families can’t use the “trailing” spouse’s projected income.

If you have any questions about Real Estate What so ever, please Contact michael Campbell @ 702-277-4605 or visit www.campbellrealestatelv.com

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Home sales nearly tripled in December from the same month a year ago, though median prices declined 32.7 percent, the Greater Las Vegas Association of Realtors reported Thursday.

The inventory of homes for sale remained relatively stable, up 0.6 percent from a year ago at 22,144 units.

It’s the fourth straight month of dramatic sales increases for both single-family homes and condos and townhomes. The 2,498 home sales are up 184.2 percent from 879 in December 2007, while the 455 condo sales are up 172.5 percent from 167 a year ago.

Sue Naumann, the Realtors association’s president, said she’s encouraged to see the jump in monthly sales during a challenging time in both the local and national economies.

December is traditionally a slow time of the year in real estate because of the holidays and colder weather, she said.

“This shows that buyers are realizing that this is a great time to buy a home,” Naumann said.

She stopped short of predicting when local home prices may rebound, but continued to emphasize that the market presents opportunities that “can’t last much longer.”

Amid predictions that home values will decline further, some real estate skeptics are saying it’s better to hold off a few months for that “smokin’ deal.”

“It’s a tough situation,” Frank Nason of Residential Resources said. “Some of my agents represent investors scooping up deals. They don’t really care if they’ve found the bottom. They’re getting homes below replacement cost, they’re holding them for three to five years and they’re getting cash flow. So to them, it’s a no-brainer.”

Nason said most of his buyers are owner-occupants and they’re in the same situation. They understand interest rates are at historic lows for 30-year mortgages and they’re going to live in the home for five years or more.

“Yeah, prices are still declining, but it’s like buying a stock. Do you try to pick the bottom? Again, they understand they’re buying a home at below-replacement cost,” he said.

Median home prices dropped to $175,000 in December, the lowest level since 2003. Condo prices are down 51.4 percent from a year ago at $89,900.

Bank-owned properties, or foreclosures, accounted for 41 percent of all listings in December and slightly more than 75 percent of all closings, Nason reported. Short-sale properties, offered at less than the mortgage owed, accounted for 31 percent of listings and 11 percent of closings.

The percentage of vacant listings continues to increase, Nason said. He found 65.2 percent of single-family listings vacant in December, compared with 44 percent in the beginning of 2007. Condo vacancies rose to 74 percent from 57 percent during the same period.

Greater Las Vegas Association of Realtors statistics are based on data collected through the Multiple Listing Service, which does not account for new homes sold by builders, sales by owners and other transactions not involving a Realtor

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The Wall Street Journal - OPINION

The Housing Crisis Is Over

By CYRIL MOULLE-BERTEAUX
May 6, 2008; Page A23

The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.

How can this be? For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won’t happen for another 15 years. It just means that the trend is no longer getting worse, which is the critical factor.

Most people forget that the current housing bust is nearly three years old. Home sales peaked in July 2005. New home sales are down a staggering 63% from peak levels of 1.4 million. Housing starts have fallen more than 50% and, adjusted for population growth, are back to the trough levels of 1982.

Furthermore, residential construction is close to 15-year lows at 3.8% of GDP; by the fourth quarter of this year, it will probably hit the lowest level ever. So what’s going to stop the housing decline? Very simply, the same thing that caused the bust: affordability.

The boom made housing unaffordable for many American families, especially first-time home buyers. During the 1990s and early 2000s, it took 19% of average monthly income to service a conforming mortgage on the average home purchased. By 2005 and 2006, it was absorbing 25% of monthly income. For first time buyers, it went from 29% of income to 37%. That just proved to be too much.

Prices got so high that people who intended to actually live in the houses they purchased (as opposed to speculators) stopped buying. This caused the bubble to burst.

Since then, house prices have fallen 10%-15%, while incomes have kept growing (albeit more slowly recently) and mortgage rates have come down 70 basis points from their highs. As a result, it now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house. In other words, homes on average are back to being as affordable as during the best of times in the 1990s. Numerous households that had been priced out of the market can now afford to get in.

The next question is: Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do.

In the past five major housing market corrections (and there were some big ones, such as in the early 1980s when home sales also fell by 50%-60% and prices fell 12%-15% in real terms), every time home sales bottomed, the pace of house-price declines halved within one or two months.

The explanation is that by the time home sales stop declining, inventories of unsold homes have usually already started falling in absolute terms and begin to peak out in “months of supply” terms. That’s the case right now: New home inventories peaked at 598,000 homes in July 2006, and stand at 482,000 homes as of the end of March. This inventory is equivalent to 11 months of supply, a 25-year high – but it is similar to 1974, 1982 and 1991 levels, which saw a subsequent slowing in home-price declines within the next six months.

Inventories are declining because construction activity has been falling for such a long time that home completions are now just about undershooting new home sales. In a few months, completions of new homes for sale could be undershooting new home sales by 50,000-100,000 annually.

Inventories will drop even faster to 400,000 – or seven months of supply – by the end of 2008. This shift in inventories will have a significant impact on prices, although house prices won’t stop falling entirely until inventories reach five months of supply sometime in 2009. A five-month supply has historically signaled tightness in the housing market.

Many pundits claim that house prices need to fall another 30% to bring them back in line with where they’ve been historically. This is usually based on an analysis of house prices adjusted for inflation: Real house prices are 30% above their 40-year, inflation-adjusted average, so they must fall 30%. This simplistic analysis is appealing on the surface, but is flawed for a variety of reasons.

Most importantly, it neglects the fact that a great majority of Americans buy their houses with mortgages. And if one buys a house with a mortgage, the most important factor in deciding what to pay for the house is how much of one’s income is required to be able to make the mortgage payments on the house. Today the rate on a 30-year, fixed-rate mortgage is 5.7%. Back in 1981, the rate hit 18.5%. Comparing today’s house prices to the 1970s or 1980s, when mortgage rates were stratospheric, is misguided and misleading.

This is all good news for the broader economy. The housing bust has been subtracting a full percentage point from GDP for almost two years now, which is very large for a sector that represents less than 5% of economic activity.

When the rate of house-price declines halves, there will be a wholesale shift in markets’ perceptions. All of a sudden, the expected value of the collateral (i.e. houses) for much of the lending that went on for the past decade will change. Right now, when valuing the collateral, market participants including banks are extrapolating the current pace of house price declines for another two to three years; this has a significant impact on the amount of delinquencies, foreclosures and credit losses that lenders are expected to face.

More home sales and smaller price declines means fewer homeowners will be underwater on their mortgages. They will thus have less incentive to walk away and opt for foreclosure.

A milder house-price decline scenario could lead to increases in the market value of a lot of the securitized mortgages that have been responsible for $300 billion of write-downs in the past year. Even if write-backs do not occur, stabilizing collateral values will have a huge impact on the markets’ perception of risk related to housing, the financial system, and the economy.

We are of course experiencing a serious housing bust, with serious economic consequences that are still unfolding. The odds are that the reverberations will lead to subtrend growth for a couple of years. Nonetheless, housing led us into this credit crisis and this recession. It is likely to lead us out. And that process is underway, right now.

Mr. Moulle-Berteaux is managing partner of Traxis Partners LP, a hedge fund firm based in New York.

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