New home sales up, but market remains fragile, analyst says

The home construction business keeps gaining speed in Las Vegas, but a local analyst is warning people not to get too excited.

A total of 1,633 new homes were sold in the Las Vegas Valley in the three months ending March 31, almost double the same period last year, according to a new report from Home Builders Research.

Local builders pulled 1,793 permits in the first quarter, also nearly double last year’s period. Moreover, the median sales price of new home closings in March was $227,081, up 13 percent from a year earlier.

U.S. housing markets with the largest price jumps also were the hardest hit during the recession, including Las Vegas. However, many people are questioning how sustainable the increases are, Home Builders Research President Dennis Smith said in his report.

He also noted that the valley’s housing market is still plagued with problems.

About 59 percent of local homeowners with mortgages were underwater — meaning their debt exceeded their home’s value — at the end of 2012, according to Zillow. That was down from 70 percent a year earlier but still highest among the country’s 30 largest metro areas.

“The Las Vegas housing market is still VERY fragile,” Smith wrote this week. “It is too early to suggest that we are out of the woods and on solid ground.”