The last 5 weeks have shown the first significant bump up in prices in over 6 years. The median selling price of a free-standing home 5 weeks ago was $120,000. The median price now is $128,000. The last time I showed prices this high was February 2011. Inventories of homes for sale are down 40% from just two months ago. As I was running the numbers for the various local planned communities I was shocked by the lack of inventory in some of the most previously active communities. Silverado Ranch closed more homes last month than are on the market there today. Mountain’s Edge, probably the leading community in terms of home sales for some time, also has only around a one month inventory.

When I was doing the planned community updates it was also apparent that in almost every case the median price for homes currently listed for sale was increasing. Factoring in the increase in asking prices with the huge continuing reduction in inventory, I think that I can safely suggest that at least in the short run, prices here will increase.

In 2005, in the small gated section of the community I live in, Sun City Anthem, there were at one point 58 homes for sale out of a total of 226 inside the gate. At that point, for reasons that I really fail to understand, we all thought the party was never going to end for this market. Now in the entire community of over 7,000 homes there are only 93 on the market. Get ready for some higher prices. This will affect sellers probably more than buyers in that sellers are much more likely now to take a “wait and see” position much the same as buyers have taken for the last several years waiting for the bottom. The problem with identifying the bottom is that you can only identify it after the fact and that may well be where we are right now.

The high was a median price of $319,000 in July 2006. As of February 2012 that had fallen off to $120,000. That is better than a 62% decrease.  Per the chart below the steepest drop off was from around June 2007 to June 2009. For the last 12 months the drop off has been just over 8%.

How low will it go? Anyones guess. When prices were going up the sky seemed the limit. That was of course, wrong.  Now it seems that there is no bottom. That is of course wrong also. We may be at it or very close. Inventories of available properties continue to shrink. The number of free-standing homes available right now is 7,135. That figure was over 8,800 two months ago and was over 13,000 in May 2009.

Henderson in 2011 was rated by Forbes Magazine the 3rd safest mid-size city the country. This, along with good news for Henderson, illustrates the fact that there are areas inside the valley that are very safe.

The local area police departments have tools online to evaluate any given area, address or zip code as to safety. I have used all three sites and they are great. Here is a link back to the page on my web site with additional crime information as well as links to the above mentioned police departments crime search tools.

Crime search tools.

The last four years have resulted in over 100,000 foreclosures. By most estimates there will be another 100,000 over the next four years. That will result in 36% of all privately held homes in this area lost to foreclosure over that 8 year period. How the foreclosures have been distributed is another matter.  Below is a graph showing all the local zip codes. In each zip code you will see two numbers. The first is the percentage. The second is the number of actual homes lost to foreclosure. The zip code with the highest foreclosure rate is 89086 at 33%. The zip code with the lowest foreclosure rate in 89134.  89134 is predominately Sun City Summerlin where most of the residents are retired and many paid cash for their homes

This graph is courtesy of SalesTraq.

Homes  range from smaller condos to large customs. At the time of this writing, prices range from $40,000 to just under $2,000,000.  The older villages include The Pueblo Village, The Hills Village and The Trails Village.  Homes range in age from 15 years old to around 23 years old.  Due to the rather strict CC&R’s in Summerlin, all of the neighborhoods look amazingly good.

The below photos was taken along Hills Center Dr. This tree-lined street is one of the most beautiful in the valley, in my opinion.

Below is a photo of the mid morning coffee crowd at Starbucks in the Trails Village Center.

Pueblo Park in The Pueblo Village is regarded by some as the best “desert” park in the Las Vegas area.

The areas described are just south of Lake Mead Blvd. on both sides of Rampart avenue.  Access to the rest of the valley is good, usually by the way of Summerlin Parkway, just a short distance to the south.  If you are considering a move to this area I would recommend that you at least give ”old” Summerlin a look.

Yep, that’s true, according to Forbes. The primary reason they use is that there has been such a dramatic drop in home values. Phoenix, our neighbor, is on the same list and even ranked worse!  I am usually interested in the Forbes top this or that, but I find the latest publication poorly researched and silly at best.  Question, do you think that the Las Vegas area was a better place to live when the median price for a free-standing home was $319,000 or now when the median price is $122,000?

The graph below represents the median home prices in several areas of the west. Also included is the housing cost/income ratio, showing the amount spent on housing as a percentage of the average income for the various areas. Note that this graph represents the median price for all homes, condos, townhomes and well as free-standing homes.

This area still offers the same advantages that have attracted so many new residents over the last several years. Lots of sunshine, no cold winters, no state income tax, no state inheritance tax and plenty to do, including proximity to several national parks are examples. The primary difference is that now you can live here for a fraction of what it would have cost you just a few years ago.

Sales of homes in the Las Vegas area market have increased greatly over the last few years. The fourth quarter of 2007 was the low point with only around 4,500 housing units sold. The second quarter or 2011 shows around 15,000 unit sold. See graph below.

Prices way down!

Prices have been in a free fall for several years. Below is a graph that illustrates this. I have personally documented the decline for free standing homes since July 2006 when the median selling price was $319,000.  In July of this year the median price was $122,000. The above graph shows even steeper declines as it factors in condos, townhomes and manufactured homes as well as free standing homes.

What is happening?

Too much supply, even for the high demand. This is likely to continue for a few more years with more foreclosures and short sales coming on the market.

Want to look like  genius?

Homes are considerably undervalued, priced well below replacement cost in most cases. I have no crystal ball, but my strong feeling is that anyone who buys as much real estate as they can today now will look like genius 5 years from now.

Summerlin -  The above photo was taken in Summerlin, my choice for best local walking community with over 150 miles in walking trails and over 100 parks. It gets my first place vote by a wide margin.  Not only are there extensive walking trails, but from many locations in Summerlin you can walk to  lunch, do some shopping or have a picnic.

Desert Shores -  This is another great community for walking. The three lakes at Desert Shores plus the beautiful tree lined streets make this my second choice for best walking community.  In the center of the community there is shopping with resturants and other services that can also provide a walking destination. Desert Shores is often overlooked with all the newer construction, but it is still a clear favorite of mine and also a favorite of many other local Realtors.

Seven Hills – This Henderson community has some of the best walking trails I have seen locally.  As it is in the foothills and at some elevation, many of the trails also provide city/strip views.  Add in what I consider some of the best parks of any local planned community and it is easy to give Seven Hills my vote for third best walking community.

Green Valley Ranch -  Green Valley Ranch, also in Henderson, has less in the way of dedicated walking trails than any of the above communities. What sets it apart and makes it my 4th choice are its two large beautiful parks and its beautiful tree lined streets. In addition, from Green Valley Ranch you can walk to the Henderson Multi-Generational Center with all of its recreational facilities or to The Districts for some great shopping.

Tie for 5th place – Several other communities offer some great walking. Los Prados, Peccole Ranch, Green Valley, Anthem, Southern Highlands, Rhodes Ranch and Tuscany are all communites that I would consider great communities to go for a walk in.

Visit my web site MillieFine.Com when you get a chance.  I have over 400 pages of local real estate information and over 200 photos.  As always, feel free to contact me with any questions you may have.  My toll free number is 1-888-449-3463 and my local number is 1-702-363-5599.  You can also email me at
millie@milliefine.com

I have previously used a newsletter format to stay connected to and give current information about the Las Vegas real estate market to those individuals who have contacted me for information.  This blog should, over time, replace my newsletter.

Short Sales

Over 50% of current listings in the Las Vegas area are short sales.  These represent an opportunity as well as many potential problems for prospective buyers.  They are most commonly listed without any previous contact with the lender or lenders in place who will ultimately make the final decision  as to whether or not to approve the sale.  I have done considerable research on short sales and have found that, on average, only around 1/3 that go into escrow eventually close.  That has been the case for some time now.

Short sales tend to be priced very well.  Keep in mind though that these list  prices are determined by the seller and the sellers agent, not the entity that will actually make the final decision, the lender in place.  They also tend to be in better condition than say foreclosures.  They are very seductive and can work out well for those with patience and those that are willing to take the risk of a long wait and a very possible bad result in the end.

This is not to discourage those interested in short sales, only to prepare them for the reality of the current marketplace.  Many of my clients, no matter how I try to prepare them for the short sale experience, are surprised as to how long and difficult the process is.