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This is the year end Las Vegas real estate report for 2007.
2007 finished in a fizzle Median Price of a home fell from $285K in 2006 to $275,000 in 2007 for most of the Las Vegas areas. Henderson was the only area that showed any gain in average sales price for the year with an average sales price of $444,000. The City of North Las Vegas showed the greatest decline of $29,000 for an average single family home. The City of Las Vegas showed almost no change from 2006.
Over all Las Vegas Re-sale homes showed a 4% decrease in Value from 2006 to 2007.
Average prices per square foot ranges from a high of $199 in Henderson to a low of $150 per square foot in North Las Vegas. Keep in mind that the specific neighborhoods and home sizes can vastly affect the pricing per square foot. These are only averages.
The total number of homes sold in 2007 fell 40% to only 23,956 units for the year.
Inventory level peaked in August at 24,341 units for sale and fell to 22,005 units in December.
Another view of the market can be seen by looking at the Listings by price for 2007 witch shows 10,768 units listed between $200K and $300K. Keeping in mind that the median sales price was $275K for the year.
Closings between $200 and $300K were only 5,671 units which is means that approximately 53% of the total listing were sold in this price category.
This chart shows the comparison of 2006 in white with 2007 in yellow showing the volume of homes sold at various price points. You will notice that in all price categories showed slower sales in 2007.
Much of the listing and sales volume for 2007 was caused by the heavy repossession rate here in Las Vegas and thousands of home owners found they could no longer afford their homes. Many of these homes were sold via the Multiple Listing Service which directly affects the median price of a home in Las Vegas.
Sales in 2007 were severely curtailed by the lack of ability for Buyers to qualify for loans to purchase homes. This percentage of households with median national income has fallen to 18% who can qualify for a loan with today’s underwriting guidelines. The melt down of the mortgage industry has both increased inventory and decreased the number of available buyers to absorb the inventory. This is causing further declines in home prices as more and more repossessions are placed on the market to be liquidated.
The Valleys Major New home builders slashed prices sharply in the last quarter of 2007. This is an effort to liquidate excess existing inventories of homes from their books.
For the year the average price of a new home fell for an average of $340,204 in 2006 to $309,730 in 2007 a 9% decrease in total pricing. This is a much steeper price cut than the 4% decline in re-sale homes.
In spite of the 4th quarter price cuts the 2007 total sales of new homes fell 45% from 35,383 in 2006 to 19,299 in 2007. Local builders are not looking for the new home markets to return until 2010.
Building permits are off 39% giving further evidence of this sluggish new home market. 20,999 permits were issued in 2006 while only 12,836 permits were issued in 2007.
Employment growth has slowed temporarily while unemployment has increased to 4.8% for 2007.
It is anticipated that very little will change in 2008 as construction continues on the mega resorts located on the Strip. The projected openings of each of the mega resorts show that the Strip will add 65,015 new jobs in late 2008 and early 2009. Hopefully the financial markets will stabilize making solid financing available for qualified Buyers. This should dry up any excess housing inventories and allow new construction to once again meet the excess demand.
Projected job growth in Clark County is over 218,000 new jobs between now and the end of 2012. This would require in excess of 100,000 residential units in the valley to house these workers.
From now until the end of 2012 it is estimated that Clark County will increase in population by approximately 483,000 people. At the current density ratio of 2.6 people per household this would require 186,000 residential units.
Weather the need is for 100,000 units or 186,000 units the result concerning our current excess inventories are the same. All available inventories should have no problem being absorbed into the inventory well in advance of the year 2012 and will probably occur by 2010.
And that’s the final 2007 Las Vegas real estate report along with a look to the future of real estate here in Las Vegas.
Copyright © 2007 Max Schmidt P.C
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