Las Vegas housing struggles

The Southern Nevada real estate market continues to struggle. In its latest report the Home Builders Research, a Las Vegas firm, registers 1,724 new-home permits in May, putting the year-to-date total at 7,934 that in turn tells us that there is 34% decline in the figure from the same time last year. A considerable drop, I must admit. What's surprising is that even though local builders are offering incentives in all shapes and sizes, the sales still remain sluggish.

Industry analysts are now saying that the new-home permits are likely to stay flat for this and most of next year, too. One important reason to that is the high existing home inventory, now over 24,000, and nearing an all-time record that was hit in October of 2006. The resale listings have to come down before it's realistic to expect the new-home sales to improve. So, the current slump seems to go on for another year, if not longer.

The national picture is equally worrisome. The Commerce Department announced just this week that construction of new homes and apartments fell 2.1% in May, which translates to a 24% drop from a year ago. Single-family applications alone were down 1.8% and have edged lower in four of the past five months. The South and West regions were harder hit than the Northeast and Midwestern areas, the latter two actually showed some modest gains.

I think we can stomach one more statistic. But that's it. The National Association of Home Builders also stops by to tell us that its survey of builder sentiment dropped, there is a lot of dropping nowadays, in June to 28 from 30 in May. All three indicators - sales, buyer traffic and sales expectations - headed south. This is the lowest level it has been in 16 years, which ought to tell us something.

Like I keep saying, there are some good news as well. Las Vegas is enjoying a bona fide buyer's market. Nothing more, nothing less.