Las Vegas, one of the most vibrant cities in America, has always been an attractive retirement destination. After nearly doubling from 2002 to 2006, real estate values in Sin City have since plummeted by 57 percent. But the area's glitzy casinos, abundant golf courses, and 320 days of sunshine a year continue to make life enjoyable for retirees.
This is the latest Las Vegas Real Estate Market Report from www.NARREIA.com (National Association of Residential Real Estate Investment Advisors). For the week of February 22, 2011, data is obtained from the Greater Las Vegas Association of Realtors MLS & the University of Nevada Las Vegas.
The national housing market continued to post mixed signals in the second quarter of 2010. On the one hand, national foreclosure filings were down 4 percent from the previous quarter.1 One in 144 housing units filed for foreclosure in the second quarter of 2010, compared to 1 in 138 units in the first quarter of 2010. On the other hand, foreclosure filings were up 8 percent in the first half of 2010, as a total of 1.65 million properties received foreclosure filings between January and June 2010. Meanwhile, sales of new residential-housing units in second quarter of 2010 were down 5 percent, on a seasonally adjusted basis, relative to the previous quarter. 

Nevada remains the top state in foreclosure rate by a large margin. Roughly 3.3 percent of Nevada housing units received a foreclosure filing in the second quarter of 2010, compared to 1.6 percent in Arizona, the number two state in foreclosure rate. Nevada was the only state to experience a quarter-to-quarter increase in foreclosure activity among the top 10 U.S. foreclosure states. The only good news for Nevada was that the year-over-year foreclosure activity was trending down, as foreclosure filings fell 12 percent relative to the second quarter of 2009. Nevada also led the nation in negative equity mortgages, in the second quarter, with 68 percent of existing mortgage borrowers owing more on their mortgages than their homes were worth.  

The Las Vegas area housing market continues to struggle as the area experiences record unemployment rates. Las Vegas remained the top metropolitan area in the nation in terms of negative equity mortgages, with roughly 73 percent of the area's mortgage properties underwater in the second quarter of 2010.4 CBER estimated an excess housing supply of 9,600 units for second-quarter 2010, an increase of 4.5 percent from the previous quarter estimate. Meanwhile, the Las Vegas area S&P/Case-Shiller Home Price Index has remained virtually flat since the fourth quarter of 2009. See Figure 1. Residential-building permits were down on both a quarterly and year-over-year basis. The median sale price of a single-family home was $150,000 in second-quarter 2010, down from $165,000 in the second quarter of 2009. These statistics suggest that the fundamentals of the Las Vegas area housing market remained weak in the second quarter of 2010. 

Increasing housing affordability in Southern Nevada has led to a reduction in the time spent on the market for housing units sold. Fifty-nine percent of single-family residential units sold in the third quarter spent less than 30 days on the market. This represents an increase of 3 percentage points from the previous quarter and a year-to-date increase of 17 percentage points. The continued trend toward increasing housing affordability and decreasing time on the market is a sign that market forces are at work and that the excess housing supply is being absorbed. This trend needs to continue in order for the Southern Nevada housing market to reach the recovery stage. 

Constant Tra, Ph.D.
Associate Director, CBER  

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