SalesTraq, a research firm that tracks the Las Vegas housing market, reported Monday that 2,177 homes were repossessed in January, surpassing the 1,962 sales in the new and existing home markets.

"This market has to shake out, and we were expecting it," said Mike Krein, president of Nevada Real Estate Services and head of the National REO Brokers Association, whose members handle foreclosure properties for lenders.

The record foreclosure numbers date back to homeowners who stopped making their mortgage payments 12 to 18 months ago, and Krein said the numbers will continue to be elevated for the next couple of months before starting to decrease. Foreclosures have put downward pressure on prices as lenders look to list them at prices at which they can be sold.

Many homeowners have been facing higher mortgage payments on their adjustable rate mortgages this year, but falling interest rates means those sticker-shock jumps aren't likely to occur, Krein said.

Sales usually outnumber foreclosures by a large margin but that changed in January when foreclosures more than doubled from the 988 in December. The previous high was 1,560 in November. In 2007, Las Vegas ranked third in the nation among metropolitan areas in foreclosures, according to California-based firm RealtyTrac.

In contrast, the 901 sales of new homes in January was a 28 percent drop from December and the fewest sales since the mid-1990s, SalesTraq reported. In the existing home market, the 1,061 sales was 27 percent lower than December and 56 percent below the amount recorded in January 2007.

Home prices continued to tumble in January, according to SaleTraq. That's bad news for homeowners and builders and good news for those looking for dropping prices.

The median price of homes sold in January was $247,000, a drop of $6,000 from December. Prices of existing homes have dropped nearly 15 percent in the last 13 months. It was $289,500 in February 2007.

The median price of new homes and traditional condos was $268,000 in January, a drop of $4,500 from December. Prices have fallen 25 percent since the new-home market set a record of $355,435 in April 2006.

SOURCE: Sales Traq IN BUSINESS LAS VEGAS

The price drops may be bad for those wanting to sell their homes at this time, but Krein said the drop below $250,000 is a threshold that's starting to generate more offers on homes. The closings recorded are two to three months behind the market, he said.

Krein suggested that prices may drop another 5 to 10 percent in the coming months before they start appreciating again by mid-summer.

When factoring in new-home prices that include high-rise condos, the median price was $275,000 in January, up more than $1,600 over December. That's the third consecutive monthly increase for that category.

There were 235 closings of mid-rise and high-rise condos in January. That's the most closings since there were 446 in August.

The prospects for new-home construction remained bleak in January. Builders took out permits for 358 homes. In 2007, builders pulled permits for 12,836 homes. If that pace hold steady the rest of the year, there will be fewer than 5,000 permits issued.

The inventory of exiting homes on the market in January fell for the fourth consecutive month. There were 23,803 available listings on the Multiple Listing Service in January, SalesTraq reported.

Analysts have predicted the housing market won't recover until the inventory declines.

Brian Wargo covers real estate and development for In Business Las Vegas. He can be reached at 259-4011 or at wargo@lasvegassun.com