Q3 Condominium Sales - Las Vegas - North Las Vegas - Henderson Nevada
General Overview of the 3rd Quarter 2009 Multiple Listing Service Condominium data for greater Las Vegas/North Las Vegas/Henderson and unincorporated Clark County, Nevada:
The MLS information presented here removes all high-rise units from the mix but includes, predominately, stacked-flat units as well as mid-rise units (e.g. Manhattan Condos, Park Place, etc.).
There were 1,578 condo sales through the MLS for the 3rd quarter - a nearly 4% increase over the 2nd quarter with July and September sales approaching the peak reached in June. Median prices continued to fluctuate during the quarter ending at $59,900 for September but remaining relatively flat since April. While the jury is still out on single family prices the floor for condominiums seems to have been reached.
Analysis Note - The analysis looked at 1,215 REO sales (77%), 193 short sales (12.2%) and 170 ‘normal' sales (10.8%). The graphs aggregate the REO and Short Sale transactions together because, unlike single family, there is less difference in REO and Short Sale transactions than the difference between Normal and Short Sale and I felt that including Short Sale with Normal as I have been doing for single family would skew most figures downward.
Days on Market continues is similar to single family with the median for all transactions at 22 days,19 days for REOs, 20 days for Normal and 56 days for Short Sales. I anticipate the DOM for Short Sales to drop as they have for single family and the number of REO properties dwindles.
I continue to believe rental rates will start to noticeably decline beginning in the 4th quarter but with prices of a 2/2 unit in the $50,000 to $60,000 range it will take healthy reduction in rents from current levels to eliminate any positive cash flow from these units.
I also continue to think the properties closest to the Strip, McCarran and other employment centers throughout the valley will fare the best since renters as well as owner occupant purchasers in this market have traditionally looked to be within 5 miles and preferably 3 miles of their work location. There is a Zip Code table as an exhibit located at the end of this report showing the distribution of sales. I'm not a big fan of using Zip Codes in any serious analysis, however, it provides crude support for that contention.
| Avg | Median | Median $ Chg | Transactions | MoM Chge | Jan-2009 | $82,553 | $70,000 | | 290 | | Feb-2009 | $79,180 | $69,900 | -1.4% | 295 | 1.7% | Mar-2009 | $71,629 | $61,450 | -12.1% | 376 | 27.5% | Apr-2009 | $64,518 | $60,000 | -2.4% | 453 | 20.5% | May-2009 | $66,678 | $60,000 | 0.0% | 475 | 4.9% | Jun-2009 | $69,072 | $61,000 | 1.7% | 593 | 24.8% | Jul-2009 | $65,837 | $60,000 | -1.6% | 538 | -9.3% | Aug-2009 | $69,055 | $62,000 | 3.3% | 498 | -7.4% | Sep-2009 | $67,978 | $59,900 | -3.4% | 542 | 8.8% |
|
After the hefty drop in value ratios (price per square foot) in the 1st and 2nd quarters prices have rebounded slightly and seem range bound but remarkably far lower than replacement cost. As with single family I do not believe we will see a return to normalcy until there are some reliable and consistent arm's length land transactions. Until that occurs current prices are discounting the land component to nearly $0 - truly remarkable. For a new condominium community to be built in most of the master plans the master developer would have to pay a merchant builder to take entitled land off their hands!
For Normal condos: Median Sales Price for the 3rd quarter was $78,250 and a median of $74.69 per square foot. Prices ranged from $21,000 (Las Brisas near Sunrise Hospital) to $469,281 (Fairway Hills in Summerlin) with sizes ranging from 500 square feet to 2,826 square feet.
Normal properties were on the market for an average of 48 days with the median of 20 days before contract.
Slightly more than 32% included a garage and 22% of the units were occupied by either a tenant or owner.
The median Sales Price to List Price was 96.5% and 22% of the transactions offered some seller concession ranging from $500 to $8,500; the median concession was $3,299.
For REO condos: Median Sales Price for the 3rd quarter was $58,500 and a median of $59.07 per square foot. Prices ranged from $9,000 (Rosewood, on Bonanza near MLK) to $299,000 (Tramonto at Lake Las Vegas) with sizes ranging from 408 square feet to 2,469 square feet.
REO properties were on the market for an average of 46 days with the median of 19 days before contract.
Slightly more than 22% included a garage and, not surprisingly only 0.2% of the units were occupied by a tenant - this figure could also be a result of input error although the banks are supposed to be seeking arrangements with both owners and tenants to keep them in the properties even after the Trustee sale.
The median Sales Price to List Price was 101% (average was 104%) and 16.5% of the transactions offered some seller concession ranging from $200 to $10,000; the median concession was $1,860.
For Short Sale condos: Median Sales Price for the 3rd quarter was $62,000 and a median of $59.84 per square foot. Prices ranged from $29,000 (Pirates Cove near Summerlin Parkway & Buffalo) to $210,000 (V at Lake Las Vegas) with sizes ranging from 636 square feet to 1,695 square feet.
Short Sale properties were on the market for an average of 98 days with the median of 56 days before contract.
26% included a garage and almost 48% of the units were occupied by either a tenant or owner.
The median Sales Price to List Price was 100% and 24% of the transactions offered some seller concession ranging from $500 to $10,000; the median concession was $1,650.
Terms of Sale: No longer surprising is the percentage of cash transactions. When Fannie Mae altered many of the funding terms for condominium communities they drove a stake through the heart of any new or resale projects.
With so many communities suffering from high HOA delinquencies and many with a large amount of investors it is nearly impossible to obtain any conventional or FHA/VA financing.
So while the single family market has been beaten pretty badly, the feds jumped onto the windpipe of condo sales. Never the favorite real estate product purchase (single family, then townhouse, then condo) I expect prices on condominiums to remain depressed long after the single family market starts to rebound.
Additional graphs may be found at the end of this narrative.
For further information on this or Northern Nevada (Reno/Sparks and Fernley/Fallon) or for a quote on custom analysis please contact:
Frank Nason, President
FrankNason@ResidentialResources.com
702-597-2855 Office or Toll-free 866-597-2855
5520 South Fort Apache Road
Las Vegas, Nevada 89148
Residential Resources provides services in the following areas:
- ! New home sales, marketing and product recommendations. We have the finest team of experienced professionals in the Mountain and Pacific Southwest. If we can't improve your sales we will refund our management and consulting fees.
- ! Individual buyer representation - it's a minefield out there and if you want to be successful at purchasing a home in this market you need experienced representation who understands the current crazy market.
- ! Individual seller representation - our team has been experiencing ever greater success in managing short sales even for investor-owned properties and obtaining far higher (than REOs) prices for normal sales without appraisal issues.