11.14.2007 | 12:09 am | News, Real Estate Market, Uncategorized
Here are your Las Vegas numbers for this week. There seem to be a little disagreement on the way I calculate our months of inventory versus they way others do. But, regardless of how you calculate it, the window is open! IT’S TIME TO BUY, BUY, BUY, IN VEGAS AGAIN!!! Prices are almost back to “pre-boom” numbers! I received an email from a new home sales associate that I know. They are selling a 1612sf home for $185,000.00!!! It almost sounds crazy, but I think the buying window will be open for the nex 12-16 months. After that, there will still be good deals, but buyers will be behind the power curve again. Just my speculation.
Weekly MLS Market Snapshot
As of COB: Friday, November 9, 2007 @ 9:00 p.m.
Category Number Totals Vacant Percentages
SFR Inventory 21,978 10,140 46.14%
Condo Townhome Inventory 5,666 3,152 55.63%
Total 27,644 13,292 48.08%
Total Contingent & Pending 2,276 1,655 72.72%
Total 29,920 14,947 49.96%
Short Sales (EA/ER) 3,998 1,668 41.72%
Repos (estimated EA/ER) 1,969 1,889 N/A
Total Distressed 5,967 21.59%
Total Sold in last 30 Days 1,208 809 66.97%
Sold short sales 70 (46) 5.79%
Sold REOs 188 15.56%
Months of inventory at current rate of consumption (29,920 / 1208) 24.768
Lowell Caro, Jr
Your Real Estate Advisor
Comments (8)
10.27.2007 | 12:43 pm | News, Real Estate Market
Wow, in my last post, on Oct 26, I gave a prediction on the housing market. Well, you may or may not believe this, but the following article from our local paper, the Las Vegas Review-Journal, talks about what Larry Murphy, President of SalesTraq, said at his “Crystal Ball” seminar on Thursda, Oct 26 (just so happens). Unfortunately, I wasn’t able to attend this seminar AND I didn’t talk to anybody who went. But, I was right on the money with my prediction…according to Larry. Steve Bottfeld, an analyst with research firm Marketing Solutions, who wassaid he sees signs that the housing downturn has evened out. I would have to disagree with Steve though. Here’s the article as it was printed in the LVRJ…
Locals who have tired of real estate’s roller-coaster ride will have to hang on a little longer: Southern Nevada is at least several months away from stabilized home prices and sales, two analysts said at a housing-industry outlook Thursday.
Homeowners can expect a sustained slide in property values at least into early 2008, and perhaps into 2009, the 500 or so attendees at SalesTraq’s Crystal Ball seminar learned.
Larry Murphy, president of real estate research firm SalesTraq, said the current market is a reversal of the heady days of early 2004, when buyers lined up by the hundreds outside planned subdivisions to snap up the first few homes in each release.
Sellers who put existing homes on the market had numerous offers within hours, including bids well beyond their asking price.
Today, it’s much easier to buy a home, and much tougher to sell one.
Several builders, including Lennar Corp., Pulte Homes, Astoria Homes and Beazer Homes, have slashed prices on standing inventory.
Builders have offered October price breaks of as much as 20 percent, with up to $250,000 in markdowns on a single home.
New-home sales in September skidded 52 percent, while prices dipped 3.3 percent. Builders have a standing inventory of 2,500 to 3,000 homes.
Nor has the market’s downturn spared existing homes.
September’s median price sagged 8.9 percent when compared with September 2006, and sales tumbled 49.9 percent in the same period. Yet, inventory has swamped the market, jumping tenfold since spring 2004 to September’s supply of 27,417 properties. That inventory means local real estate values will have depreciated 5 percent to 10 percent by the end of 2007, Murphy predicted.
So, when will the market come back to life?
Give it 12 months to 18 months, Murphy said.
Based on September’s inventories and sales rates, Southern Nevada has about a 19-month supply of existing homes and a three-month supply of new homes.
The market will have hit bottom when supplies stop rising and prices stop declining, Murphy said.
Before that happens, expect the median price of a resale home to drop from $263,075 in September to around $240,000 or $250,000.
On the other side of that nadir, though, is another bounce in housing sales and prices, Murphy predicted, as a $33 billion building binge in the city’s resort sector comes online and generates thousands of new jobs.
Murphy said he expects the next market surge to start in the second half of 2009 or the first half of 2010, after the $1.8 billion Palazzo, the $2.2 billion Wynn Encore and the $7.4 billion CityCenter have opened.
“Trust me, there is another real estate boom coming,” Murphy said.
Another local real estate watcher said he expects the Las Vegas housing market to bottom out much sooner than Murphy anticipates, with a new market peak to come on the other side of today’s rough times.
Steve Bottfeld, an analyst with research firm Marketing Solutions, said he sees signs that the housing downturn has evened out. The market could leave the doldrums as soon as the first or second quarter of 2008, Bottfeld said.
Foreclosures fell 8 percent nationwide in September after reaching a 32-month high in August, according to data from California consultant RealtyTrac.
In Las Vegas, the foreclosure rate dropped from one for every 165 households, or 6,197 foreclosures, in August to one for every 185 households, or 5,504 filings, in September.
Countrywide Home Loans’ announcement this week that it would put $16 billion toward refinancing adjustable-rate mortgages scheduled to reset to higher interest rates will present a “strong hold against foreclosures,” Bottfeld said.
Plus, the inventory of existing homes, though historically high at more than 27,000 listings, is stable and hasn’t increased significantly this fall, Bottfeld said.
He noted that today’s softening numbers of closings and prices represent a snapshot of the market as it was 60 days to 120 days ago. September’s data includes sales made before the Federal Reserve added $5 billion in cash to the economy and cut by half a percent the rate banks use to determine the mortgage interest they’ll charge.
Statistics from coming months and quarters should reflect the resulting boost in available credit.
What’s more, an unstable stock market could benefit housing, because uncertainty in financial markets has traditionally pushed investors to trade in paper wealth for the more-tangible asset of real estate, Bottfeld said.
A limited local supply of privately owned land will also push prices upward in the long term, as will construction of megaresorts along the Strip. The first of those new resorts, the Las Vegas Sands Corp.’s Palazzo, is scheduled to open in December.
“A boom in hotel rooms will precede a boom in real estate,” Bottfeld said. “We’re treading on the bottom of the market now.”
Other crystal ball observations:
• Nevada is tied with Hawaii at No. 2 for the share of its residents’ income that goes toward housing. Nevada homeowners spend an average of 46 percent of their wages on housing payments. California is No. 1, with an average of 52 percent of every paycheck going toward mortgages, Bottfeld said.
• The housing slump is generating lean times for sales associates.
The average sales rate per new-home subdivision in 2006 was five houses per month; today, that average is about two houses a month. With a standard two sales people per subdivision sharing the two sales and earning a commission of 1 percent, that means some agents can no longer afford the homes they’re selling, Murphy said.
• Affordable pricing hasn’t inoculated builders and sellers from a down market. Sales volume was down 53 percent in the third quarter among homes priced below $200,000, Murphy said.
By contrast, the number of sales among homes priced at more than $1 million was up 368 percent in the quarter, and some Realtors who specialize in luxury sales are having banner years, he said.
FROM A SELLER’S MARKET TO A BUYER’S MARKET
Both new and existing homes are worth less than they were a year ago thanks to a combination of increasing supplies and fewer buyers. Here are September’s inventory and sales numbers:
| NEW HOMES |
| |
Active
subdivisions |
Closings |
Median price |
| 2007 |
566 |
1,328 |
$312,639 |
| 2006 |
531 |
2,765 |
323,232 |
| EXISTING HOMES |
| |
MLS
Inventory |
Closings |
Median price |
| 2007 |
27,417 |
1,466 |
$263,075 |
| 2006 |
21,409 |
2,926 |
$288,750 |
| Source: SalesTraq |
Comments (5)
10.26.2007 | 7:00 pm | News, Real Estate Market, Uncategorized
Hi Susan, I’m in Las Vegas and my team and I do a number of short sales. I’m going to throw my own personal opinion out there. I would say that in Vegas, most 100% financed homes do NOT have PMI. I believe the majority of the 100% financed homes have 80/20 loans to avoid PMI. Out here, when a home is foreclosed on the second is wiped out completely. With the decline of housing prices out here in Las Vegas (from the peak, when a lot of people pulled the remaining equity out of their homes), taking that 20% off the top doesn’t even touch the amount prices have depreciated. So, when we go to the bank, we end up asking the bank to come down off the 80% portion of the loan and there usually isn’t PMI. The banks are willing to short sell the property because they don’t want to own the property and add to their portfolio of non-performing loans. The lenders do evaluate properties (by sending REO agents out to do BPOs) to determine if they should add PMI, but I think they are behind the power curve on that…and no, the homeowner doesn’t even know sometimes. But to get down to your question, a resounding YES, a call should be made to the lender to determine if they will accept a short sale. Unfortunately, many lenders won’t even talk to you until you have a complete short sale package, complete with an offer. Your other question, on what “loss” PMI will cover and will not cover is a great question. I will have to do some research to find that answer. I would like to know that myself. Of course their are exceptions to everything, and my answers are general answers and do not apply to EVERY single situation.
Comments (0)
10.20.2007 | 7:33 pm | News, Real Estate Market
There are currently over 28,000 single family residences, condos and townhomes on the market in Las Vegas as of today. With over 7,000 of those properties being short sales, in foreclosure or REOs, 25% of our inventory is comprised of distressed properties. Of course these numbers are higher in some areas and lower in others, but regardless, appraisers and BPO agents will soon be forced to take these properties into consideration when valuating properties for lenders and asset managers…if they are not already doing so. What does this mean? This means that property values will continue to decline for a while. With an excess of 20 months of resale inventory, the demand will not consume the supply for some time. Anywhere else in the world this would spell disaster for the housing market, but Las Vegas is resilient. We still have tremendous growth and our job market is always strong. So, we will continue to see a slow but steady decrease in housing prices for a while, but don’t wait too long, the Vegas market will bounce back. It may not bounce as high as it did when it went through the roof, but it will come back. In the meantime, you will see more short sales and REOs. If the banks are smart, they will start letting more properties go as short sales, so they have less REOs…if… In the mean time, let’s take advantage of the market!!! In every adversity, there is the seed of equivalent success!!!!!
Comments (1)
there are 28,239 SFR, condos and townhomes on the market. This equates to a 21.7 month inventory at the current absorption rate. Of those homes on the market (EA or ER), we have a 47.5% vacancy rate. There are a lot of good deals out there…go get those buyers!!! Also FYI, Lennar has some killer deals this weekend up in Providence. Just went into contract on a 1795sf home for $250k!!! Granite, stainless steel appliances, blinds and upgraded trim included! It’s getting good out there!