Las Vegas home prices sink to 1997 level, Standard & Poor’s reports

Las Vegas-area home prices fell in November to a level last seen 15 years ago and will likely keep dropping through late 2013, new housing data show.

Debt rating agency Standard & Poor’s, which tracks home prices in 20 big U.S. markets, on Tuesday said prices in Las Vegas fell 1 percent from October to November, the 10th straight month of declines after a blip of an increase in January 2011.

November's prices were the lowest since February 1997 and represented a new post-recession low for Las Vegas, where prices peaked in April 2006 and then tumbled.

The city was hurt hard by the recession, which reduced visitation to the U.S. gaming capital, resulting in high levels of unemployment (now 12.7 percent) and foreclosures.

Standard & Poor’s also said prices locally in November were down 9.1 percent from November 2010.

These declines compare to a 1.3 percent price drop from October to November for the 20 cities tracked by Standard & Poor’s, and a year-to-year 20-city decline of 3.7 percent.

Nationwide, Standard & Poor’s said in its monthly S&P/Case-Shiller Home Price Indices report, prices continue to fall despite continue low interest rates and better gross domestic product growth in the fourth quarter.

"Weakness was seen as 19 of 20 cities saw average home prices decline in November over October," David Blitzer, chairman of the Index Committee at S&P Indices, said in a statement.

For Las Vegas, Tuesday’s S&P/Case-Shiller Home Price Indices included the discouraging statistic that the annual home price decline from November 2010 to November 2011 (9.1 percent) had widened from the 8.5 percent year-to-year decline seen in October.

On top of that, home price data collector Fiserv Inc. issued a report Monday forecasting that Las Vegas-area home prices would fall 14.2 percent from the third quarter of 2011 to the third quarter of 2012 — and then fall another 0.2 percent through the third quarter of 2013.

Fiserv, which contributes data to the Case-Shiller reports, predicted that average U.S. prices would decline 2.7 percent by the third quarter of this year before rising 3.8 percent by the third quarter of 2013.

Even the struggling Las Vegas market is expected to pick up after the third quarter of 2013, with Fiserv projecting prices locally in the third quarter of 2016 will be up 5.3 percent from the third quarter of 2011.

A "big story" nationwide is the continued improvement in housing affordability, Fiserv chief economist David Stiff said.

He said the monthly mortgage payment for the median-priced U.S. home had fallen to $640, nearly 45 percent lower than the housing bubble peak of $1,150.

"That represents the lowest level since 1994. Similarly, mortgage payments now account for only 14 percent of monthly median family income, as households made more progress in repairing their balance sheets," Stiff said in a statement.

This week’s reports on Las Vegas home prices follow the release of data from the Greater Las Vegas Association of Realtors showing the median price of single-family homes sold in December locally was $120,000, down 4 percent from $125,000 in November and down 9.1 percent from $132,000 in December 2010.

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  1. Las Vegas should get credit for being the Worst Planned City in the U.S. The Politicians are either The Most Corrupt or the Most Incompetent. Most of it looks like the Mill Housing you had in the South to support the Textile Mills, just substitute Casinos here.
    The Mortgage Market in the U.S. is destroyed. Banks only make money by Originating a Mortgage for Fannie or Freddie, (Quasi Government agencies where Taxpayers take all the Risks and Investors Take all the Profits), or Foreclosure Processing Fees. Since Fannie and Freddie are betting that Prices will continue to sink (with their help) they are making Billions for Investors by Trapping Honest Homeowners in their Higher Priced Mortgages.
    To Best them at their Scam, Homeowners can continue to live in their homes without paying the Mortgage and when Fannie or Freddie Finally has the Bank throw them out - they have the CASH to buy a house for the Price that these Mortgage Giants have pushed the prices to. Scam VS Scam and the Losers are those that continue to make Payments on a House will Never be worth what they owe or Paid for it.
    Talk to Your Lawyer and get Off this thread mill of House Payments that are draining you for nothing to show for it.

  2. Anyone who has been here since the late 90's is WELL AWARE of what happened to housing prices starting as early as 2002. The cost of construction did not significantly increase, the cost of raw land acquisition was driven through the roof (as high as $360,000 PER ACRE in 2006 at BLM auction - remember the Las Vegas Valley is landlocked by BLM land). Existing houses started climbing in price to just below new house costs, even though they were NOT ACTUALLY worth any more money. A house built in 1984 bought in 2002 for 175,000 DOES NOT BECOME a 495,000 house in 2007 (well it did along with many like it) - and there lies the root of the problem. The article states that prices are back to 97 levels. EXACTLY what the market needs, a complete and total reset to more representative values.

    Now for that portion of those 4.7 million cases where the robo-signers did their business for the lending institutions with people here in Nevada, it should be up to the bank to wipe the slate clean, give them fair market value for their houses that were wrongly evicted from. For those people that bought of their own free will when the prices were at ridiculous levels, am not sure you will ever realize the cost of your investment back, however if there were second and third loans attached to the initial mortgage, those are probably questionable loans, and should be eaten by the bank (make up for a bit of that 760 BILLION that came out of our pocket to them). Then the loans should be re-financed to a rate commensurate with your credit rating (factoring in the economic turmoil of the last 3 years). Your house might not currently be worth the 360K you paid for it, but if the banks correct and refinance, that will make a payment reduction of nearly 50%. The main objection to those under water with their primary residence is that the payments are not indicative of the worth of the asset. If I am paying 3000 a month in mortgage payment, my 140K house value looks way out of whack,,,,,,,but if I am paying only 1400 for the same 140K value, it is perceived as not being so bad. And since we are near or AT the bottom of the down-swing, the prices will begin to escalate, as soon as people have more confidence in the economy and their ability to remain employed for any long term period of time.

  3. I find it interesting that those that bought their homes in 1997 and sold them in 2007 are not complaining at all.

    Those that stepped up and agreed to the prices of a house in 2007 seem to be yelling a great deal today though.

    Can't have it both ways folks.

    You notice that home prices are back to 1997 rates and the Stock Market just had its best January since 1997? Are things evening out?

    If you could not afford to buy in 2007 maybe you can now if you played your cards right.

  4. This is good news for those who want to move here and retire, bad news for those who bought and want to sell. It will get worse before it gets better as all those who have mortgages re nig on them and the foreclosures go thru.