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Friday, May 24, 2013

Lawler: Vegas Housing Market: “Sizzlin’ Hot,” and Yet So Cold

by Calculated Risk on 5/24/2013 03:06:00 PM

From housing economist Tom Lawler:

Dataquick released its April report on Las Vegas home sales based on property records in Clark County, Nevada, and the report portrayed “mixed” news on the health of the Vegas housing market. Here are some summary stats on home sales and median prices, as well as various shares of sales in the report.

Selected Share of New And Resale Home Sales, Las Vegas
Absentee Buyer Share of Total Sales50.5%53.1%
All-Cash Share of Total Sales53.6%56.6%
Foreclosure Share of Resales43.7%12.2%
Estimated Short-Sales Share of Resales29.4%30.3%

Las Vegas-Paradise, Nevada Home Sales
Number of salesApr-12Mar-13Apr-13YOY % Change
Resale houses3,2332,9983,3092.4%
Resale condos8078038485.1%
New homes51068471239.6%
All homes4,5504,4854,8697.0%
Median sale priceApr-12Mar-13Apr-13YOY % Change
Resale houses$122,000 $155,199 $160,000 31.1%
Resale condos$60,000 $79,995 $84,948 41.6%
New homes$197,320 $220,000 $234,981 19.1%
All homes$119,000 $155,000 $160,000 34.5%

The report also included some stats on buyers of multiple homes, as well as median home prices for absentee-buyer and all-cash home sales.

Based on the share and other data in the report, here are some “derived” stats for home sales by various “cuts.” Also included are partial data for April 2011 based on last year’s report. (Note: The short-sales share for April 2011 is not available, because Dataquick revised its methodology for estimating short sales in the latter part of last year but has not released historical revisions to the public.)

From several perspectives the data suggest that the Vegas market has been “sizzlin’ hot,” mainly reflecting increased buying from investors despite huge declines in the number of “distressed” properties for sale. To others, however, the lack of any growth in homes purchased by folks who plan to live in the purchased home suggests that the Vegas market is disturbingly “cold.”

April Home Sales, Las Vegas RegionApril 2013 vs
Absentee Buyer2,1282,2982,58521.5%12.5%
Primary Residence2,3622,2522,284-3.3%1.4%
Mortgage Financed2,0652,1112,1132.3%0.1%
Foreclosure Resales2,2791,765507-77.8%-71.3%
Short-Sales ResalesN/A1,1881,260N/A6.1%
Distressed ResalesN/A2,9531,767N/A-40.2%
Ex-Foreclosure Resales1,8122,2753,650101.4%60.4%
Ex-Distressed ResalesN/A1,0872,390N/A119.9%
Ex-Foreclosure Total2,2112,7854,36297.3%56.6%
Ex-Distressed TotalN/A1,5973,102N/A94.2%
Multi-Home BuyersN/A454813N/A79.1%
10+ BuyersN/A81360N/A344.4%
Median Sales PriceApril 2013 vs
Resale Home$125,000 $122,000 $160,000 28.0%31.1%
Resale Condo$61,000 $60,000 $84,948 39.3%41.6%
New Home$190,000 $197,320 $234,981 23.7%19.1%
All Homes$117,000 $119,000 $160,000 36.8%34.5%
Absentee$99,000 $96,000 $136,000 37.4%41.7%
All-Cash$90,000 $89,900 $135,000 50.0%50.2%

The numbers that have gotten the most attention, of course, are the median sales prices, which are way up from their lows. This partly reflects the huge decline in foreclosure resales, but also reflects continued increases in “absentee” buyer (mostly investor) purchases of homes in Vegas, despite the plunge in the number of foreclosure (as well as overall “distressed”) home sales.

From the standpoint of overall home sales, the recent sales increase despite the sizable drop in “distressed” home sales -- “ex-distressed” home sales this April were up 94.2% from last April – seems rather remarkable. In addition, the sizable jump in new home sales both this year and last year – albeit from extremely low levels – is “encouraging.” What is equally remarkable but less encouraging (at least to some) is that purchases by buyers for their primary residence last month were virtually unchanged from last year, and down from two years ago. Homes purchased by absentee buyers (identified by buyers who indicated that the property tax bill would go to a different address than the property purchased) continued to increase, with the biggest increases coming from buyers who purchased one or more homes, with homes purchased by “entities” that purchased 10 or more homes jumping sharply. (Dataquick notes that some “individuals and partnerships” purchase homes under multiple names, so the “multi-home” buyer numbers may be understated).

CR Note: This was from Tom Lawler.