I found this new story in Business Week concerning real estate prices in the 16 largest cities certainly interesting that you can read here - merely for the fact that it gives the median Asking Prices.

The majority of the real estate articles we see are based on the median sold prices from a previous given month, etc. such as the Case/Shiller Index. (Which by the way is actually reporting on data that is over two months old by the time it’s released to the media.)

Here is the information that Business Week had for Las Vegas:

Las Vegas Real Estate Asking Prices

Annual asking price change: -18.95%
April, 2008, asking price: $284,188
April, 2007, asking price: $350,627
Annual inventory change: -23.38%
Listings with price reductions: 50%

Now, compare it to the Median Prices of Sold Homes in Las Vegas for March of 2008 as reported by the Local Las Vegas real estate analysts that were just released in the Las Vegas Review Journal that you can read here.

Existing home closings were down 62.8 percent in March to 980 and their median price dropped 13.9 percent to $247,000.

As Reported by Salestraq:

Las Vegas-based SalesTraq reported 1,076 new-home closings in March, a 40.3 percent decline from the same month a year ago. The median new-home price has dropped 10.2 percent to $276,292.

Below, we have a chart provided by Home Builders Research just to break this up and give you some visual entertainment:

Very interesting numbers when you compare the median asking price for a Las Vegas home to actual sold prices for Las Vegas Homes.

“Like I’ve been saying, it looks like we’re close to the bottom,” Smith said. “I’m talking about sales. The price is not a reflection of whether the market is turning around. It’s a lagging indicator. You have to have better demand.”

Hmmm… Supply and Demand is a big factor in Price. If you take all of the numbers above, what we have is an average asking price (what sellers want) in April (according to Altos Research and reported by Business Week) higher then the most recent median sold prices (what buyers want to pay) for Las Vegas homes in March.

There is nothing scientific about average asking prices. On any given day you can have Las Vegas homes priced higher then market value or lower then market value. Some sellers determine the price for their Las Vegas homes for all the wrong reasons. Just like buyers, emotions can be a big factor that influences decisions when it comes to residential real estate.

However, what the average asking price for a Las Vegas home does show is that sellers have reduced their asking prices significantly in a year. The effects of this will eventually create more demand which leads to lowering the supply to reach the levels of finding an equilibrium in the market.

Which ultimately will create a healthy real estate market where the current emotions of fear being experienced by buyers of falling real estate prices after they purchase is not the main factor in their decision to not buy real estate.

Paul Francis, ABR,CRS
Coldwell Banker Premier
Las Vegas Real Estate
702.592.3058

P.S. – In case you did not catch it, the above quote of the 62.8% decline with 980 closings in March does not match up with the chart. In the same article they have:

The resale segment continues to improve with 1,899 recorded closings, the fourth straight monthly increase.

Interesting to say the least.