Las Vegas Valley – Continuing to Grow The Las Vegas metropolitan area continues to be a growth story with some of the largest private investments in the world. Multiple cranes rise over the Las Vegas Strip while concrete and steel make daily increases in height. Over $6 Billion of hotel and resort construction is expected to be completed in 2008 followed by over $20 Billion in completions in 2009. Population continues to surge with 5,000 to 6,000 drivers licenses surrendered each month through the Nevada DMV. This migration creates a very organic demand for housing which will serve to alleviate the excess in the overall housing supply. Experts predict strong job prospects on the horizon. Forbes.com ranked Las Vegas one of the top ten best cities in the U.S for jobs. Mark Zandi, chief economist for Economy.com stated that Las Vegas, along with Phoenix and Riverside, “are good fundamentally solid economies and should rebound strongly.� Although our city has great growth and prospects, the existing home inventory still needs to be absorbed. As of the end of June 2008, existing home inventory on the multiple listing service was 20,554. If Las Vegas grows by 50,000 residents this year, a significant amount of the existing supply should be absorbed. At 2.3 persons per household , approximately 22,000 homes are required to support this incoming population. Some proportion will fill into existing apartment, single family home and condominium vacancies as renters while it is likely that many others will choose to become or remain homeowners. Las Vegas has typically enjoyed a homeownership rate of about 60%. The choices for new home buyers are decreasing. As of June, we estimate that only 800 single family homes are complete and unsold, while new condo/townhome inventory is estimated at about 1,500, which includes condominium conversions and high-rises.
1 3
Las Vegas Convention and Visitors Authority Hotel/Casino Development Construction Bulletin. 2 Center for Business and Economic Research. Forbes.com, Best and Worst Cities for Jobs, April 10, 2008. 4 Calculated from the 2006 American Community Survey.
Selling Your Home
HOME RE-SALES (LESS THAN $1M) 2002 THROUGH JUNE 2008 50,000
Knowledge of the neighborhood, an analysis of
45,000
competitive new and re-sale home prices and sales rates are
40,000
fundamental in formulating a list price. The best option in
35,000
the current market is to find experienced Realtors® who
30,000
have strong knowledge of particular neighborhoods and
25,000
are immersed in the market on a daily basis. In the first
20,000
half of 2008, Coldwell Banker Premier Realty listings sold
15,000
for an average of 96% of list price. 14% sold above list
10,000
THRU Q2 07
5,000
price with 30% selling at or above the listed price.
2002
2003
2004
2005
2006
2007
2008
SOURCE: MLXCHANGE
Existing Home Sales Re-sale homes have seen declines in yearly sales since 2004, with 2007 sales falling below that of 2002. So far in 2008, re-sales have already matched 60% of what was sold in all of 2007. Many buyers are recognizing the great values found in scores of Las Vegas homes and seizing the opportunity to acquire a great property. We also took a look at differences between the average days homes spent on the market in the first half of 2007 and 2008. What is noteworthy is that in the ranges below $400,000 where the majority of homes were sold, the days on market have not changed significantly. This is likely a reflection of the price decreases made to get these properties sold in a time acceptable to the owners and lenders.
SINGLE FAMILY DAYS ON MARKET COMPARISONS FIRST HALF 2007 VS FIRST HALF 2008 $800,000 – $1,000,000
$600,000 – $800,000
$400,000 – $600,000
$250,000 – $400,000 2008 2007
$150,000 – $250,000 50
100
150
200
250
300
DAYS ON MARKET CONDOMINIUM DAYS ON MARKET COMPARISONS FIRST HALF 2007 VS FIRST HALF 2008 $800,000 – $1,000,000
$600,000 – $800,000
$400,000 – $600,000
$250,000 – $400,000 2008 2007
$150,000 – $250,000 50
100
150
200
250
300
DAYS ON MARKET SOURCE: MLXCHANGE, COLDWELL BANKER PREMIER REALTY
New Home Sales New home closings are substantially lower in the first half of 2008 compared to the same period last year, as homebuilders compete with existing inventories. In recent months, closings have become more stable. There are some exciting opportunities in the new home market. Many communities offer varied lifestyle options and amenities and builders are offering homes at prices more competitive than many of the existing homes. NEW HOME CLOSINGS & PERMITS
NEW & EXISTING HOME PRICES
2,500
$400,000
$300,000
1,500
SALE PRICE
NUMBER OF PERMITS/CLOSINGS
$350,000 2,000
1,000
$250,000 $200,000 $150,000 $100,000
500
n -0 8 Ju
8 r -0
r -0 8
y -0 8 Ma
Ap
b -0 8
Ma
n -0 8 Ja
New Home Closing Price (median)
Fe
7
c -0 7 De
t -0 7
v -0 No
p -0 7
Oc
Se
g -0 7
l-0 7
New Home Permits
Au
n -0 7
Ju
Ju
7 r -0
r -0 7
y -0 7 Ma
Ap
b -0 7
Ma
n -0 7 Ja
Fe
n -0 8 Ju
8 r -0
y -0 8 Ma
r -0 8
New Home Closings
Ap
b -0 8
Ma
n -0 8 Ja
Fe
7
c -0 7 De
t -0 7
v -0 No
p -0 7
Oc
Se
l-0 7
g -0 7 Au
n -0 7
Ju
Ju
7 r -0
r -0 7
y -0 7 Ma
Ap
b -0 7
Ma
Ja
Fe
n -0 7
$50,000
Existing Home Closing Price (median)
SOURCE: SALESTRAQ, CLARK COUNTY, CITY OF LAS VEGAS, CITY OF NORTH LAS VEGAS, CITY OF HENDERSON
Price Guarantees Several home builders are adapting to the market by offering some type of a price guarantee, with various programs available. For instance, some builders will protect buyers from decreases in prices on the same floor plan on future construction stipulating if the price of the floor plan that a buyer is purchasing decreases within a set timeframe before they close escrow, they will offer the homebuyer the lower price. While other home builders are bolder and will guarantee that in the event they lower prices within a certain time frame after the home buyer closes escrow they will send them a check for the difference.
Valley Home Type Composition Home prices are popular citations in the current discussion of real estate. We look at what types of homes formulate those figures. Based on sales in the first half of 2008, we summarize some basic home characteristics so we know what to expect in the listed price ranges. In the first half of 2008, the greatest amount of single family and attached homes transacted in the re-sale market was in the $150,000 to $250,000 range. Some of these homes were purchased at bargain prices. The average re-sale single family home within this $150,000 to $250,000 range was 1,699 square feet, which is a great opportunity for first time home buyers or even for those moving up. With a good sized initial investment and the ability to secure a home loan, this market holds great opportunities many have been waiting for.
SINGLE FAMILY HOME
CONDO / TOWNHOUSE
BASIC CHARACTERISTICS
BASIC CHARACTERISTICS
PRICE RANGE
AVERAGE SQUARE FEET
AVERAGE YEAR BUILT
AVERAGE # OF BEDROOMS
PRICE RANGE
AVERAGE SQUARE FEET
AVERAGE YEAR BUILT
AVERAGE # OF BEDROOMS
$150,000 – $250,000
1,699
1997
3
$150,000 – $250,000
1,335
1997
2
$250,000 – $400,000
2,399
1999
4
$250,000 – $400,000
1,398
2000
2
$400,000 – $600,000
3,188
2000
4
$400,000 – $600,000
1,213
2003
2
$600,000 – $800,000
3,573
2000
4
$600,000 – $800,000
1,341
2003
2
$800,000 – $1,000,000
3,904
2001
4
$800,000 – $1,000,000
2,113
2005
2
$1,000,000 – 1,500,000
4,383
2000
4
$1,000,000 – 1,500,000
2,337
2005
3
$1,500,000 – $2,000,000
5,201
2001
5
$1,500,000 – $2,000,000
2,435
2003
3
$2,000,000 – $2,500,000
5,455
2004
4
$2,000,000 – $2,500,000
4,055
2003
3 SOURCE: MLXCHANGE
CBPR DEEMS INFORMATION RELIABLE BUT NOT GUARANTEED.
FORECLOSURES LAS VEGAS HOME FORECLOSURES
The Las Vegas market is being driven by bank-owned properties. 64% of closed sales for the month of June were
6,000
banked owned, while 52% of the sales placed in escrow
5,000
were bank-owned. The good news is that the listing
4,000
inventory slid for the 10th month in a row dropping from
3,000
28,200 to 20,554. The number of foreclosures dipped for
2,000
the first time since the fall of 2007. Full recovery requires
1,000
a substantial decrease in inventory; it’s called supply and demand and our supply is decreasing. With approximately nine months of inventory, we are moving back towards
J 07
F
M
A
M
J
J
A
S
O
BANK ACQUISITIONS
a “normal” market.
N
D
J 08
F
BANK DISPOSITIONS
M
A
J
BANK OWNED Source: SalesTraq
short sales The Short Sale market is comparable in numbers to the non-foreclosure sector at approximately 28% of the total listings and sales. Although the difficulty of negotiating with lender mediation departments has increased the workload for Realtors, skilled Short Sale specialists have contributed to the increase in the number of Short Sales closing since January of 2008.
53% of property on the market is vacant This figure has increased 9% over last year’s report but has remained steady for nearly a year. The majority of these are obviously foreclosures but there are still investor and second homes factoring into this number as well.
M
Luxury Home Re-Sales On a yearly basis, re-sales have been declining since 2005. Re-sales of luxury single family homes (over $1 million) decreased 53% from the first half of 2007 to the first half of 2008, which was a substantial decline. However, when reviewing the details, some price ranges saw nearly an equivalent amount of transactions. The $3,000,000 and greater range actually fared quite well. Luxury condominiums fared similarly between the first half of 2007 and 2008. Overall, the trend in sales between single family and condominium are comparable. At the end of June 2008, the multiple listing service had approximately 1,200 homes priced above $1 million listed for sale.
LUXURY SINGLE FAMILY HOME RE-SALES 2002 THROUGH JUNE 2008
luxury SINGLE FAMILY HOME sales
700 600 500 400 THRU Q2 07
300 200 100
2002
2003
2004
2005
2006
2007
50 40 30 THRU Q2 07
20 10
2004
2005
2006
2008
152
67
$1,500,000 – $2,000,000
57
19
$2,000,000 – $3,000,000
27
16
$3,000,000 – $4,000,000
11
13
$4,000,000 – $5,000,000
2
1
$5,000,000 – $6,000,000
3
3
$6,000,000 +
3
1
TOTAL SALES
255
120
luxury SINGLE CONDOMINIUM sales
60
2003
2007
2008
LUXURY CONDOMINIUM RE-SALES 2002 THROUGH JUNE 2008
2002
PRICE RANGE
$1,000,000 – $1,500,000
2007
2008
PRICE RANGE
2007
2008
$1,000,000 – $1,500,000
2
9
$1,500,000 – $2,000,000
9
5
$2,000,000 – $3,000,000
9
4
$3,000,000 – $4,000,000
3
0
$4,000,000 – $5,000,000
0
2
$5,000,000 – $6,000,000
0
1
$6,000,000 +
0
0
TOTAL SALES
23
21 SOURCE: MLXCHANGE
SOURCE: MLXCHANGE
When evaluating the re-sale activity in some of the Valley’s most notable areas, an overall decline in the number of transactions is apparent. However, some areas saw notable luxury single family home re-sale activity, such as Southern Highlands and Summerlin. Movement also continues in the high-rise projects of Turnberry Place and Park Towers, which remain desired properties for urban living.
luxury high-rise sales CONDOMINIUM RE-SALES BY DEVELOPMENT 2007
2008
REGENCY TOWERS
3
0
PARK TOWERS
3
2
TURNBERRY PLACE
15
11
THE DISTRICT
1
0
PANORAMA TOWERS
1
0
SKY LAS VEGAS
0
3 SOURCE: MLXCHANGE
PROPERTIES SOLD
PROPERTY FEATURES
The luxury buyer is discerning and sophisticated and requires highly
130
BEDROOM DOWNSTAIRS
amenitized properties. A greater number of bathrooms, pools and increased garage
127
4 PLUS BATHS
space are typical requirements. Gated communities and homes within golf course
120
GUARD GATED
Luxury Home features
communities are still popular choices in the Las Vegas market. The table
78
3 CAR GARAGE
details some major features of Las Vegas re-sale luxury homes sold
69
COMMUNITY TENNIS
in the first half of 2008.
53
GOLF COURSE VIEWS
52
COUNTRY CLUB
Most Expensive Homes Sold by Coldwell Banker Premier Realty
49
POOL
39
GATED COMMUNITY
36
FIRST LEVEL MASTER
28
4 CAR GARAGE
For three consecutive years Coldwell Banker Premier Realty has been proud to represent the clients of the most expensive properties purchased either in the single family or high rise categories.
•
$9,000,000 – 2005-2006 Park TowerS Penthouse
•
$9,000,000 – 2006-2007 TOURNAMENT HILLS Estate
•
$19,000,000 – 2007-2008 MacDonald Highlands Estate
This year’s property was sold by one of our luxury agents in the Green Valley office. The $19,000,000 sale is the single most expensive residence sold during the last four years.
LAS VEGAS…An Improving Market Unlike many markets in the country, Las Vegas’ real estate market is showing signs of improvement and is in recovery. The number of sales has been climbing every month since January and outpacing sales numbers from 2 years ago…during a very strong market. The listing inventory has been diminishing and the downward trend on sale prices is slowing. Buyers are getting excellent values on homes and sellers are realizing that they must price their property in line with the market to compete effectively to sell. This trend will continue for a time, but not for the long haul. The old adage for acquiring wealth “sell when everyone is buying and buy when everyone is selling” is truer now than ever. Our economy is still strong and with our continued increase in population, Las Vegas remains the best bet for businesses and families to thrive. For market data and information specific to your neighborhood, call your agent.
Bob Hamrick – Chairman of the BoarD
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CBPR DEEMS INFORMATION RELIABLE BUT NOT GUARANTEED.