Land, Houses ‘Too Expensive’ In Las Vegas
The Review Journal reports on some changes in Nevada. “There’s probably no better indication that Las Vegas’ real estate market has cooled than the number of people who kept their wallet in their pocket at Wednesday’s BLM public land auction. Only nine of 61 parcels on the block were sold, a total of 27.5 acres out of 488 acres.”
“It was the smallest sale since the Southern Nevada Public Land Management Act of 1998 ordered the release of 27,000 acres of federal land. Some 2,800 acres sold for $754.5 million at the last auction.”
“‘I imagine it’s the market. It’s the prices,’ said Anna Wharton, land sales specialist for the Bureau of Land Management. ‘It’s likely developers are thinking values are too high. They also have a stock of property they’re trying to turn over and I’m not sure the market is ready for turnover.’”
“At one point early in the auction, after 10 consecutive parcels received no bids, someone in the audience shouted, ‘Too expensive.’ The land is independently appraised for the BLM and offered twice a year at public auctions, though bidding starts at minimum value.”
“Bill Fritchley, who went to the auction, said the parcels aren’t going to sell for what they’re asking. ‘All of a sudden, we had the market going up. Now we’re seeing a softer market. What we’ve seen is the market was overinflated,’ he said.”
“Bill Wilson of First National Bank of Nevada said a lot of the parcels were zoned residential. Land prices have leveled off and even retreated in some residential areas, said Travis Nelson, assistant vice president at Nevada Title Co.”
From Business Week. “More than most cities, Las Vegas has benefited from four years of low interest rates, a sizzling housing market, and explosive growth in jobs and population. With its heavy dependence on housing and consumers, Las Vegas may provide some hints of what a national slowdown might look like.”
“In Las Vegas, as in other hot markets, soaring real estate prices have driven spending on cars and other consumer goods. Since 2003 home price appreciation has generated more than $20 billion in paper and real wealth for residents. Although the median price of existing Las Vegas homes is still rising, the annual appreciation rate slowed to 7% in May. And the number of existing homes sold in May fell 18%. Like it or not, Las Vegas seems poised for a slowdown.”
“The housing market in the Las Vegas Valley has cooled down considerably from just a year ago. According to the latest real estate market condition report, there are more than 20,000 houses on the market in the valley.”
“Eyewitness News spoke with a number of homeowners Wednesday and they say they are lowering the price just to get people to look at their homes. Real estate experts say the problem is home prices went up too high too fast and now they’re starting to come down.”
“Investor and realtor Don Weimer has had a property on the market for about a month and hasn’t seen much activity on it. He says many homeowners are now rethinking the selling price of their home. ‘We’re going to have to further drop in prices. I’ll probably drop this in another week or so. I have a payment. I have association dues. I’m a big boy; I’m not going to get what I thought I would. It’s the function of the market. Real estate is not a liquid item,’ he said.”
“Weimer says the housing market is 15-percent off right now from the all-time high and we should expect to see resale home price come down further.”
Many here said the ’shortage of land’ around Nevada was a temporary illusion, and so it is. Also from the Review Journal:
‘Nevada senators have drafted a bill to encourage developers to build affordable homes in the Las Vegas Valley, including at least 5 percent of the units built on large parcels they acquire from the federal government. The new incentives for builders in Clark County were made part of a sweeping bill that reshapes the government’s holdings in White Pine County.’
‘The measure would make up to 45,000 acres in White Pine County available for controlled development through auction by the Bureau of Land Management. It also would remove 68,000 acres from wilderness study and make it available for multiple uses.’
‘I am certain that builders don’t like to be told what to do, but we also hear from the builders that even their own employees can’t find housing,’ Ensign said.’
We all knew this. However, all the RE shills kept saying “We will run out of land in a few years”. NO YOU WILL RUN OUT OF FOOLS!
It occurred to me today that real estate has gone the way of hula hoops and pogs. I was driving past an open house today (yes, even on Thursdays now) and the mood there just seemed depressing.
Thursday is a normal day for a broker’s/agent’s open.
I’m sure it was depressing, all the same.
Crispy - drove by your new (under construction) building this cool morning in Bakersfield, and NO ONE was there. What’s up or down?
pismo bear:
Workers need to be paid. Subcontractors need cash to pay their workers……………………..SKREECH…#@$%@#%#%%
& hard money lenders want their 12% and collateral!
You do realize I share no affiliation with those guys.
Nothing going on over there? Huh?
I must have found another fool then; Got 98.7% of my asking. My engineer said I should be ashamed. My dependents, my x’s, asorted children said ,’go daddy’.'kick ‘em some more’.
So how does the mob handle a downturn? Can they strong-arm the comps? Do they dig a really deep hole?
Suzanne - they by XMI , OEX & S&P calls / futures, by Wall Street frims..I mean the mob!
So 45,000 acres plus 68,000 acres plus 27,000 acres.
That’s 140,000 acres right there.
No more land indeed! (sure, they aren’t making more land in LV, they don’t have to… it’s everywhere, and the gov’t is more than happy to rezone it.)
It just irritated me to no end to hear idiots spouting the “there’s no land” argument when you look and see nothing but empty land as far as the eye can see. Don’t crap on my head and call it a crown. Sheesh.
clouseau.
the problem isn’t land
i think it’s the lack of water.
And cheap electricity. Imagine LV in the summer when oil hits $150.
I think that LV gets their power from the Hoover Dam.
Right, LV gets a lot of power from the Colorado River. Here’s how the river’s usage is divided up:
California 50%
Nevada 50%
Arizona 50%
Q: Why did Colorado get the Californicators, and Houston got the New Orleans Katrina riff-raff?
A: Houston got first pick.
With all the Californicators moving in, and a seven-year drought, we may not be quite so generous about sharing the Colorado River with our downstream neighbors in the coming years.
Don’t tell me LV gets $0.02/kWh electricity while the rest of the US pays $0.50 next year? Or maybe those guys in black suits in Cadillacs actually gave the Hoover Dam operators an offer they couldn’t refuse?
As the venerable Mark Twain said:
“Whisky is for drinking and Water is for fighting.”
“Right, LV gets a lot of power from the Colorado River. Here’s how the river’s usage is divided up:
California 50%
Nevada 50%
Arizona 50%”
LOL. I got a good chuckle out of that one. Rivers in the desert - gotta love them. Of course, Mexico gets the remaining 50%.
Ohh, it’s the lack of somethin’, all right.
Well the problem for the BLM was :
When they made the list of dirt to sell, from the demand requested!!!…. only 9 pieces received the minimum bid!
NOW that is CRISIS…oh what was I thinking, “soft landing into a “more” normal market”
Across the country here in VA, this organization called the “Virginia Outdoors Foundation” has scarfed up 329,888 acres so far. Their acquisitions are growing exponentially, and they want more. It’s really not good for planning purposes. Just makes a crazy quilt of open land.
http://www.virginiaoutdoorsfoundation.org/stats_year.htm
“Weimer says the housing market is 15-percent off right now from the all-time high and we should expect to see resale home price come down further.”
Wow, didn’t think the market was that bad yet. He is probably referring to prices where a house will actually sell for today instead of the lagging median price a month or two ago. Looks like Robert Cote is going to be right with his -20% price drop prediction this year. The price at which a house will sell in Dec., 2006 is going to be quite a bit lower than Dec.,2005. Watch out below.
Thanks but remember to thank Ben. He does the work, I just bloviate.
And, Robert, you do it well.
Was it LVlandlord that used to go on and on about how Vegas was special because there really truly was a shortage of land? What a difference a little shift in psychology makes. Gee, there really is more land. And the gov’t can make more of it available any time they like. All those high rises going up, because Vegas is running out of land! Jeez…
Anyone who’s ever been to LV knows what a joke the land shortage is (was). It just happens that the BLM controls a lot of the land around LV, but there is still plenty of it.
Yes, that’s exactly what lvlandord and others used to claim…guess it’s not different there after all…LOL
-
where is LVLandlord and the others? Where is Lingus???
She should be in Debtors Prison by now!!
Lingus for everyone!
LV Landlord is living in her parents’ basement back in Iowa. You’d have to see “Leaving Las Vegas” to witness a more wretched departure from Tinsel Town.
Lingus certainly overstepped some bounds about multiple political topics after being told by regular posters to knock it off.
I bet he is on the asked not to return list.
“At one point early in the auction, after 10 consecutive parcels received no bids, someone in the audience shouted, ‘Too expensive.’”
If we could listen to the thoughts of prospective homebuyers in unaffordable places like SD, LA, SF, DC, CHI, and so on, I am sure we would similarly hear a collective silent scream of ‘Too expensive’…
I am so glad someone finally shouted it. That was the “Emperor Has No Clothes” moment. EVERY prospective homebuyer should be saying that right out loud, right up in the faces of sellers and realtors. With as much scorn and disgust as possible. It is our moral duty. The time for manners is long past. Bring on the medicine!
That will go down as one of the Classic Lines. When Ben does his movie he needs to get footage of that auction!
Crispy, that should be the opening shot. And then flashback to the beginning of it all, then going forward through the auction to wherever it is that this ends.
The image in my mind makes me wish the Movie was out NOW! LOL!!
in medias res? I like it. This has all the makings of an epic Greek tragedy.
BLM a soviet sounding agency
set price first- big gov= stupid
it’s probably worked well in the past. they have a right to sell it for whatever they want.
you mean “we” have a right to sell it for whatever “we” want. Like Ronalus Maximus proclaimed, “I paid for this… BLM!”
Unless the US is a socialist country, the fedgov should not own ANY land, other than for their office space, nat’l parks and military posts.
Why can’t the gov’t lease office space just like all us poor citizens?
What part of “we the people” dont people understand…WE are the government. WE get what WE want and right now that appears to be borrowing money from the Chinese to kill brown people in the ME….oh and hate on gays. I think that about covers it.
“Weimer says the housing market is 15-percent off right now from the all-time high and we should expect to see resale home price come down further.”
BLASPHEMY!
The tide has turned. Just 3 months ago we never saw articles like this. As they continue, psychology will continue to shift.
LV is toast.
We especially never saw such statements from realtors, such as Weimer. And this is from not only a realtor, but one who has some skin in the game, as he is trying to find a greater fool to buy his property.
Las Vegas may not be different that the rest of the country, but Eureka, CA definitely seems so.
Housing inventory has actually dropped over the last six weeks. We’re down to 760 from a high of 793 recorded in late June. I’m not sure if it’s people pulling their houses off the market, or if there are enough greater fools still buying. I think it is the latter, judging by recent sales of homes in the neighborhood I rent in. Seems like there is no shortage of Santa Rosa equity locusts/speculators coming this way. Any observations from others in NW California?
I lived in Eureka some years ago. Maybe it’s changed, but it damn sure seemed different then. A certain type moves to Eureka, as it isn’t much of a destination for anything else, other than moving to. It always seemed to me that there is a group of people that want to be away from it all, and while I always liked Eureka ( ok, maybe not Eureka but King Salmon had great chowder at Pat’s Place) it’s a place you escape to, not really to go to find your life’s work.
zillow.com is showing price declines month after a month for most zip codes in Humboldt Co.
Eureka will eventually get their RE price whupping, just may have to wait for the Bay Area to get hit first.
Same here in NoVa - inventory skyrocketed, then leveled, and is now declining a little. Sales are off over 30% YOY, but people are still buying, but after price reductions. This will slowly push prices down, but I don’t expect a speedy decline.
in eureka, NoVa, and probably many other places: I think many listings expired 7/31 and either will be shortly relisted or else were withdrawn (not sold!) as sellers think maybe it’s best to wait until next spring when the market ‘turns around’.
after all, now that august is here, the selling season is, in effect, over for 2006.
sad thing is, it will probably be much worse next spring and they’ll regret not taking that ‘lowball’ offer that came in july ‘06.
same thing occuring here on long island, mls down slightly, and still a few GF’s left here…
Listen up! The July non-sales housing fugures, both new and resales will be releasedaround Aug 15. This will confirm the downward trend of prices, and Panic will set in. The ARM resets and the 120 a Notice of Defaults will bring the arrogant sellers to their knees. I predict crash by the final week of August. This reminds me of March 2000 dot.com. All the figures were there except for the talking heads on CNBC, and their followers quoted these paid goof balls, saying everything was just fine. History to repeat. Stay tuned
And I predict that the release date will be pushed back due to “technical” issues.
If we’re talking about the NAR figures, I think we get them on or about the 25th of each month, not the 15th.
“I’m a big boy; I’m not going to get what I thought I would. It’s the function of the market. Real estate is not a liquid item,’ he said.”
I think ole Donnie boy is gonna take one right between those 2 fat hairy cheeks of his. You know what I’m talkin about…his brown round. This moron trying to act cavalier about his little RE problem while actually pissing BB’s. Add this schmuck to the list of FB’s.
*fake Irish accent*
“Oh Donnie boy, . . .”
*/fake Irish accent”
“those 2 fat hairy cheeks of his. You know what I’m talkin about…his brown round.”
can’t we just have out ass-poundings back?
- the annual appreciation rate slowed to 7% in May. And the number of existing homes sold in May fell 18%.
Very soon the appreciation rate will be - 7% and sales ‘fell 36%’
Anyone familiar with Silver Stone Ranch in LV? sister inlaw is putting her place up for sale for $700K. She continues to claim builder is asking for 850K for a comparable place. I just laughed. House on market over a month, and no a single looker. Told her that’s a sign of over priced. Keep dropping 5% every two weeks until it’s sold. Btw, she’s moving into another new place..double mortgages in the meantime.
Stupid is what Stupid does………
I thought LV was land-locked?
No, sand locked!!
I don’t think many posters are left from the X-locked joke days.
Probably, but it might be a good time to revive a few…LV is now condo-locked.
Here’s another article from the RJ on the current state of the Vegas economy. ‘The number of new residents moving to Las Vegas dropped 7.9 percent to 6,819, visitor volume fell 2.4 percent to 3.75 million and passenger count at McCarran International Airport was flat at 3.9 million.’
http://www.reviewjournal.com/lvrj_home/2006/Aug-03-Thu-2006/business/8826202.html
how many hookers, strippers, drug dealers, casino workers, and realtors can the town support?
Maybe a better questions is how many flippers can it support?
Remember, this only counts the incoming residents, not outgoing.
DHOM reports after hours:
http://biz.yahoo.com/bw/060803/20060803006000.html?.v=1
Q2 2006 vs Q2 2005:
So, revenue down 28%, sales down 46% (number of homes), backlog down 38%. Profit of 2005 turned into loss of 2006.
The only good news is that sales expenses are down 23% (but not enough to offset other losses).
So what are the cancellation rates?
DHOM (Dominion Homes) reports after hours: [sorry if this double posts]
http://biz.yahoo.com/bw/060803/20060803006000.html?.v=1
Q2 2006 vs Q2 2005:
So, revenue down 28%, sales down 46% (number of homes), backlog down 38%. Profit of 2005 turned into loss of 2006.
The only good news is that sales expenses are down 23% (but not enough to offset other losses).
So what are the cancellation rates?
Cancellation rates aren’t that important. Look at the backlog. Once the backlog disappears, the incentives will stop, and the real price war starts. Resales won’t even know what hit them.
um
are lower sales expenses really a good thing? I know how you can completely eliminate sales expenses, and I’m not even an MBA.
lasvegasrealtor.com released their housing numbers today. A total of 2,501 units sold in July, down from 3,937 a year ago, a 36% drop YoY. Also, the median SFR was $310,000, down from $315,000 last month, but up from $306,950 a year ago (FYI - the median was also $310,000 last September).
The meltdown in underway!
http://www.lasvegasrealtor.com/stats/statindex.htm
SF sold 2005 vs. 2006 from 3240 to 1996. Ouch!!
As I said with respect to Phoenix a couple of months back;
That yowling in the distance you can sometimes hear of an evening isn’t from coyotes any more.
Total the May, June, July figures for SFR sold. 9500 in 2005 vs. 7000 in 2006….a trend is more than 1 month, so how about 3 months. Haven’t checked the number of listings for these 3 months in 2005 vs 2006.
“Although the median price of existing Las Vegas homes is still rising, the annual appreciation rate slowed to 7% in May.”
I love the way they try to make it look like houses are continuing to appreciate by citing year over year numbers. Houses are depreciating as we speak, but the rest of the world won’t have a clue until the YOY numbers go negative. Of course NAR will pobably change to decade over decade reporting at that point!
From the RJ link posted earlier:
‘The local economy retreated in July as seven categories contributed negatively to an index of leading indicators, UNLV economist Keith Schwer said. The housing market in Las Vegas shows a 30.8 percent decline in new home permits in June from the same month a year ago and a 25.9 percent decline in existing home sales. The number of new residents moving to Las Vegas dropped 7.9 percent to 6,819, visitor volume fell 2.4 percent to 3.75 million.’
‘As for the housing bubble that some analysts say has burst, Schwer said we need to define ‘burst.’ ‘Prices have come down and they’re on the market longer,’ he said. ‘There’s not as many transactions because the flippers have left. The bubble is a qualitative assessment and it varies significantly from person to person.’
SF sold 05 vs. 06from 3240 to 1996. Ouch!!
“The bubble is a qualitative assessment and it varies significantly from person to person.’”
What’s so qualitative with 30% declines?
Simmssays…10 Wayt to REALLY Piss Off Your Woman
http://www.americaninventorspot.com/relationship_advice
“Too Expensive” in Las Vegas?
You can think the CA Equity Locusts…..equal opportunity infestors.
The degree of speculation behind the bubble is much larger than anyone suspects. The reason everything has “hit the wall” is because of the sudden pullout of the educated “infestors”.
Comment by sleepless_in_seattle
2006-08-03 16:44:55
Anyone familiar with Silver Stone Ranch in LV? sister inlaw is putting her place up for sale for $700K. She continues to claim builder is asking for 850K for a comparable place. I just laughed. House on market over a month, and no a single looker. Told her that’s a sign of over priced. Keep dropping 5% every two weeks until it’s sold. Btw, she’s moving into another new place..double mortgages in the meantime.
Yes, my husband and I are quite familiar with Silverstone Ranch. Its where hubby’s favorite golf course is.
We’ve been eyeing the place, waiting for home values to drop a minimum of $100K before we even consider making any offers on anything. And we’re looking at small townhomes and single family homes, not McMansions. We’re not interested in flipper properties with granite countertops, since we plan on gutting any place we buy next. (That’s how we take care of some of our energy bills out here in Vegas…by improving the insulation of the homes).
Maybe we’ll rent there when our lease is up at this current house. That way we can live in the area until housing prices go down, save money, and hubby gets to walk to his favorite golf course everyday.
And the majority of the builders are already undercutting the home flippers in that area. Nothing funnier than to see a standard flipper home being sold for $50K less by the actual home builder!
Hahah, shortage of land in Vegas. I can see maybe an out of towner who has never left the airport and the LV Strip maybe being duped into thinking this, but any LV local that believes in a “land shortage” is insane. Or a deluded realtor.
There are homes in foreclosure in Silverstone Ranch that have dropped $100,000. You just need to find an agent who tracks foreclosures, and makes offers $100,000 below asking price when there is equity in the house in foreclosure. You can also make a bid at the trustee sale, except this requires “all cash”. This new breed of real estate agent is out there, and the chances are they are not the ones with their picture posted everywhere, and with the most signs in the neighborhood. They will be one step a heard of the heard today, and one step ahead tomorrow. If you are serious, I suggest you start interviewing your next agent and
find out what they really know about foreclosures. There a 120 new Notices of Default being filed every working day in Las Vegas. Ask your agent to see the list
OT,
found this link this morning…
“”We’ve thought about getting the big RV and touring the country: ‘This is the Homelife family coming to town.’”
Why reduce your price when you can sell that warm and fuzzy feeling in addition to your speculative property to the unsuspecting FB…
http://heraldtribune.com/apps/pbcs.dll/article?AID=/20060804/BUSINESS/608040702
ot but worth reading
http://www.markettradersforum.com/forum1/1389.html
“rate hike worth than al kida attack /australia”
from germany jmf
http://www.immobilienblasen.blogspot.com/