Las Vegas new home sales hit 30-year low in 2011
16 January 2012
Vegas Inc. coverage
The Las Vegas-area home-building industry likely bottomed out in 2011, when new home sales fell to a 30-year low of 3,894, an analyst says.
“2011 was the most difficult year the home building industry has ever been through,” Dennis Smith, president of Home Builders Research Inc., said in his monthly “Las Vegas Housing Market Letter” issued over the weekend.
Smith’s year-end tally of 3,894 sales locally compared to sales of 5,379 in 2010 and of 38,957 at the peak of the market in 2005.
Smith said the 3,894 sales is the lowest he’s seen since he started tracking the market in 1987.
VEGAS INC research shows the 3,894 sales was the worst showing locally since 3,576 single-family building permits were issued in 1982, when the nation was mired in recession and the Las Vegas market was much smaller.
Clark County’s population was 507,510 people in 1982. By 2010, it had risen to 1.97 million people.
During the current recession, Las Vegas new home sales have tumbled because of high unemployment, which is now at 12.5 percent, and lower prices driven by competition with foreclosed homes.
New homes sold locally in December at a median price of $212,250, down 2.7 percent from December 2010, Smith reported.
More than half of Las Vegas homeowners remain underwater in their mortgages — they owe more than the properties are worth — and are therefore unable to buy new homes, Smith noted.
With modest local economic improvements expected, Smith said, he expects new home sales locally to rise slightly but to remain well below historical levels. They should come in at about 4,000 this year and at about 4,200 in 2013, he said.
“So, the bottom of this mess certainly seems behind us. But, any quick, dramatic recovery appears to be out of the question,” he wrote in his new market update.
Smith’s report follows last week’s issuance of reports on existing home sales showing that while they soared during 2011 in Las Vegas, prices fell year-over-year in December by 9.1 percent to a median of $120,000.
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