Las Vegas-area home sales fell year-over-year for the third consecutive month in August as sub-$200,000 transactions declined 20 percent and the foreclosure resale level dropped to a nearly five-year low. In- and out-of-state absentee buyers continued to snap up nearly half of all homes sold, while the median sale price edged up to a 17-month high amid strong demand and a continuing shift toward fewer low-cost distressed sales and more mid- to high-end activity, a real estate information service reported.

In August, 4,795 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County). That was up 11.6 percent from the month before and down 11.4 percent from a year earlier, according to San Diego-based DataQuick. The firm tracks real estate trends nationally via public property records.

On average, sales have risen 6.6 percent between July and August since 1994, when DataQuick’s complete Las Vegas region statistics begin. This August’s sales were 6.3 percent below the average number of homes sold during all months of August since 1994, and were the lowest for that month since August 2010, when 4,283 homes sold.

August’s sales tally was below average because new-home sales remained extraordinarily weak – about 57 percent below average for the month of August. Resale activity was 19.7 percent above average for an August. The number of houses and condos that resold in August rose 8.9 percent from the prior month and fell 16.9 percent from a year earlier. Though low in an historical context, sales of newly built homes in August rose 39.2 percent on a year-over-year basis.

In the overall market in August, the higher price categories continued to post the largest year-over-year sales gains, while activity declined sharply in the lower price segments. The total number of homes that sold for less than $100,000 fell 34.5 percent in August compared with a year earlier. The number of homes that sold for less than $200,000 declined 19.9 percent year-over-year, while the number that sold above $300,000 rose 44.1 percent. The number of sales above $500,000 rose 56.3 percent compared with a year earlier. (The over-$500,000 market only accounts for about 2 percent of total sales).

Increased affordability thanks to super-low mortgage rates and years of price declines has spurred more demand in the mid- to higher-end markets this year. In the lower price ranges, demand among first-time buyers, investors and vacation-home buyers has been robust, reducing the supply of homes on the market to the point where it has hampered sales (i.e. if there were more homes listed then the sales volume would be higher). Why isn’t inventory rising to meet the demand? Many who would like to sell can’t because they owe more than their homes are worth. Other potential sellers are holding off on a move-up purchase because of uncertainty over the economy, or because they’re waiting for higher prices.

The median price paid for all new and resale houses and condos sold in the Las Vegas metro area in August was $133,000 – the highest since the median was $139,000 in June 2010. August’s median rose 3.1 percent from the prior month and rose 18.2 percent from a year earlier.

August was the seventh consecutive month to post a month-to-month gain in the median, and it was the fifth in a row with a year-over-year increase. Prior to this April, the median hadn’t risen year-over-year since June 2010. August’s 18.2 percent annual rise in the median was at least in part a reflection of the substantial drop in the share of all resales that were foreclosed properties, which tend to carry significant discounts and be concentrated in lower-cost areas. The pickup in mid-to high-end deals also helps push the median higher.

The August median sale price remained 57.4 percent below the November 2006 peak of $312,000. In recent months the median has been rising off a cyclical low point of $110,000 this January – the lowest level since the median was also $110,000 in April 1994.

An alternative home-price gauge – the median paid per square foot for resale single-family detached houses – rose again to $73 in August. That was up 2.1 percent from the month before and up 8.2 percent from a year earlier, marking the third consecutive month with a year-over-year gain. (This January’s $64 median per square foot was the lowest since at least 1994.) The August figure was 61.9 percent lower than the peak $190 paid per square foot in May and June 2006.

Sales of foreclosed properties continued to decline in August, while short sales increased.

Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 21.9 percent of Las Vegas resale activity in August – the lowest level since October 2007. August’s figure was down from 25.8 percent the month before and 57.2 percent a year earlier. Foreclosure resales peaked at 73.7 percent of the resale market in April 2009.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 38.2 percent of the resale market in August. That compares with an estimated 38.1 percent the prior month and 22.7 percent a year earlier. The estimated short sale level has exceeded the foreclosure resale level for the past two months.

Absentee buyers – mainly investors and vacation-home buyers – purchased 48.7 percent of all Las Vegas-area homes sold in August. That was down from 50.9 percent the month before and up from 47.1 percent a year earlier. The peak was 51.2 percent this March. Absentee buyers paid a median $110,000 in August, up from $108,000 the prior month and up 19.6 percent from $92,000 a year earlier. Absentee buyers are those who indicated at the time of sale that the property tax bill will go to a different address.

In August, 56.4 percent of all absentee buyers were based outside of Clark County, either in another part of Nevada or in another state, according to public records. About 44 percent of all absentee buyers in the Las Vegas region were from Nevada, while about 56 percent were based in other states. Topping the list of states where these out-of-state investors and second-home buyers came from were California (29.8 percent of all absentee buyers), Arizona (3.1 percent), Hawaii (2.1 percent), Utah (2.0 percent) and New York (1.6 percent). Absentee buyers from California accounted for nearly 14 percent of Clark County's total home sales in August.

Cash buyers purchased 50.9 percent of the Las Vegas-area homes that sold in August. That was down from a cash-buyer share of 53.4 percent of total sales the month before and down from 52.3 percent a year earlier. The peak was 56.7 percent in February 2011. Cash purchases are where there is no sign of a corresponding purchase mortgage in the public record. Cash buyers paid a median $105,000 in August, up from $104,900 the prior month and up 25.0 percent from $84,000 a year earlier.

Home flipping by investors has been on the rise and has returned to levels not seen since the housing boom. In August, 6.6 percent of all homes sold on the open market (excludes foreclosure auction sales) had previously sold within a six-month period. That's up from a flipping rate of 5.6 percent the month before and 4.2 percent a year earlier. The August flipping rate was the highest for any month since it was 7.1 percent in January 2005.

Meanwhile, foreclosure activity remains far below last year’s level.

In the wake of a 2011 Nevada law that creates additional requirements for lenders trying to foreclose on properties, the number of notices of default (“NODs”) filed in Clark County has plummeted. In August, lenders filed 2,025 NODs, up 25.1 percent from the prior month and down 62.3 percent from 5,368 a year earlier. The notice of default is the first step in the formal foreclosure process.

Lenders foreclosed on 793 homes in the Las Vegas region in August, down 8.2 percent from the month before and down 68.0 percent from a year earlier. Between January and August this year, lenders foreclosed on 10,021 single-family house and condo units, down 60.1 percent from the same period last year.

A form of low-down-payment financing that’s popular with first-time home buyers – government-insured FHA loans – accounted for 35.0 percent of all home purchase loans in August. That was down from 35.9 percent the prior month and down from 40.6 percent a year earlier. This June’s FHA level of 34.9 percent was the lowest since April 2008, when it was 31.9 percent. The current cycle’s peak for FHA use was 55.1 percent of all

Las Vegas-Paradise, NV

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