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.