“It’s Darwinist Times” In Las Vegas
The Deseret News reports from Utah. “The number of building permits issued for new houses, condominiums and apartments is falling across Utah, but in Utah County permits are skyrocketing, according to a new report.”
“Many Utah cities have seen the number of residential permits issued this year drop dramatically. Permits in St. George fell 43 percent in the first nine months of 2006, compared with that period in 2005. In Herriman, permits fell 50 percent. West Jordan was down 31 percent.”
“However, Chris Gamvourulous, president of biggest homebuilder said, the company remains concerned over the ‘investor presence’ in the Salt Lake market. ‘We think in our communities we are going to be OK, but it just depends on how individual builders and developers deal with it in their individual communities,’ Gamvourulous said. ‘If they refuse to sell to speculators and investors, then their communities will probably be OK.’”
“‘We’re optimistic, but we are very cautious,’ Gamvourulous said. ‘Just because things are transacting doesn’t mean they are real. It could be speculators. There are recisions.’”
“‘We’re still not building too many houses relative to the population and the numbers of jobs that we have,’ economist Kelly Matthews said. ‘But we have to be cognizant that clearly what’s going on nationwide and what’s gone on in Phoenix, Las Vegas and even St. George probably will have some bearing here along the Wasatch Front.’”
The Review Journal. “Developers of the 41-story Allure luxury condominium tower plan to build a second, substantially taller tower on the 5-acre site on Sahara Avenue, one block west of the Strip.”
“It’s been boom, bust, boom,’ (developer) Steve Fifield said. ‘In 2005, we were in a boom period with presales. It was too good to be true. Now we’re reporting a slowdown in sales and traffic. We all jump on the bandwagon and say it’s a bust. Public home builders are unloading land. They’ve got an unsold inventory of homes.’”
“‘Las Vegas does have an overhang of housing, but that overhang is coming down quickly. There’s only 280 (high-rise) units available for sale, so I think we’re at the end of the bust,’ he said.”
“Research firm Applied Analysis reported 95,647 existing or planned luxury condo units in Las Vegas as of October, including 1,152 existing units on the Strip and 4,795 under construction. ‘It’s Darwinist times,’ said developer Richard Worthington. ‘Only the well-positioned, well-located, well-capitalized are going to be successful in the near term.’”
“‘The hard thing about condo-hotel is it doesn’t pencil out from an investment standpoint,’ Applied Analysis principal Jeremy Aguero said. ‘It’s problematic from the consumer side. We’ve heard some buyers grumbling about the money they’re getting back (on condo-hotel rentals).’”
A letter to the editor from a Las Vegas realtor:
‘I have read several articles recently about the current state of the Las Vegas real estate market. I now know why the public is totally confused. After 18 years selling real estate both here and in Los Angeles, I have seen all the elements that affect a market. But never have I seen the problems facing us presently all coming together at the same time. It’s like a perfect storm.’
‘We have an affordability problem in this town. They say that 5,000 to 7,000 people are moving in every month. So why do we have so many homes unsold on the market? Unfortunately, the wages being paid for the majority of jobs new and old are not high enough for the people to buy a home.’
‘Many investors who helped drive the prices up thinking they would make a killing are simply dumping their homes on the resale market to get out from under a mistake they made. They simply bought too late in the game to flip and they did not realize the $2,000 monthly payment can’t be covered by a $1,200 monthly rental income. Because of the dumping of these properties on the resale market, the present inventory is more than 20,000 resale single-family homes and condos or townhomes. Fifty percent of the homes on the resale market are non-owner occupied. Who do you think is going to lead the market in pricing?’
‘Some owners who have had their properties for a long time had built up some nice equity. Then interest rates dipped and they refinanced, increased the amount of their loan, bought cars, paid for vacations, etc., and now are finding out that with the market in somewhat of a decline, the value of their home is less than their loans. These people are trapped. These homeowners are the foreclosures of tomorrow.’
‘Let’s talk about loan fraud, which is occurring at an alarming rate. As sellers get backed up against the wall, they will be willing to listen to the few who will try to get something for nothing. A seller has his home on the market for three months at $400,000 and has not had any offers, and along comes an offer of $460,000, but the buyer wants the seller to give him cash back of $60,000 after the close of escrow. Of course the lender won’t know about this. After the deal closes…here goes another one into foreclosure, and since this scam is a federal crime, whoever they catch is going down, including the seller and almost everyone who touched the deal.’
‘The public keeps hearing these reports from the experts that prices are not going down, as a matter of fact, they are going up. Give me a break. What they don’t say is that more and more sellers are giving incentives to buyers by paying all or part of the closing costs. So if a seller sells his home for $400,000 and gives the buyer 3 percent of the sales price for closing costs (that’s $12,000), the seller really sold his home for $388,000. This is never mentioned when the experts report the real estate activity. The appraisers are required to make an adjustment for this incentive when they compare properties.’
‘As I mentioned, all these elements are presently at work in the Las Vegas market. It’s time for the media and the experts to take a day off and join an everyday working agent to see what all the facts are and report them accurately so the public can be well-informed and make good decisions.’
“Last month, there were just 357 condo/townhome sales valleywide, 45.2 percent fewer than in 2005, reports the Greater Las Vegas Association of Realtors. Condo/townhome listings, however, skyrocketed to 6,261 units in October, which is 128 percent more than a year ago.”
Well, they should talk to the great econoMISSED leslie appleton-young from the CAR…the same things were present in the desert communities, and she said things will only be slower for about 18 months, and that the fundamentals were still strong.
I covered her exact quotes in my post yesterday…
SoCalMtgGuy
http://www.housingbubblecasualty.com
357 condo/townhome sales and 6,261 condo/townhome listings. Hmmm, that looks like 17.5 months of inventory. Oh, and about 4,800 more are under construction. Nothing to see here. Move along.
And Doumani said “At this point I am not worried about saturation.” He must have some insight we all lack.
sarcasm off
One of the best summaries by an REIC “member” I have ever read. I think I will forward this to DL and Apple-Head Young!
Boy, that guy gets it. It is refreshing to see those in the industry give an honest view of what is going on in the LV market.
Great letter. The author hits the major issues which are raised time and time again on Ben’s blog. Looks like the message is getting out.
Strange thing (maybe not) is that it is a letter to the editor. Why aren’t journalists doing their job? If I was a lazy business journalist I would just lurk on Ben’s blog for the meat and major themes and then rewrite and edit for the conditions in my local market. A journalist would easily have major production with little or no sweat time involved.
“Strange thing (maybe not) is that it is a letter to the editor.”
It actually only looks like a letter-to-the-editor in the on-line version of the newspaper. In print, it appears as a column on the Opinion spread with a very prominent heading. Luckily, that makes it hard to miss, even by people who are just scanning the newspaper.
You don’t “piss in your own pool.” Meaning you can’t write bad articles about housing when a large percentage of your revenue comes from builders advertising.
‘Some owners who have had their properties for a long time had built up some nice equity. Then interest rates dipped and they refinanced, increased the amount of their loan, bought cars, paid for vacations, etc., and now are finding out that with the market in somewhat of a decline, the value of their home is less than their loans. These people are trapped. These homeowners are the foreclosures of tomorrow.’
But it was fun while it lasted?
Seriously, every cloud does have a silver lining.
I invited Mr. Scharwtz to visit us.
info@LasVegasHomePros.com
Hey Neil,
Great op-ed. You summed up the situation in fewer words than I could have. Kudos to you for describing the Emperor’s attire so accurately.
Can I invite you to visit http://thehousingbubbleblog.com/ ?
It would be great to get an insiders view of this mess.
Thanks.
more , everyone’s screwed excpt us”
“‘The hard thing about condo-hotel is it doesn’t pencil out from an investment standpoint,’ Applied Analysis principal Jeremy Aguero said.
This comes as a complete surprise!(Not) How anyone honestly thought these condotels would ever “pencil” out as an investment is simply an amazment. These turkeys are done and ready for carving.
Actually many were not sold as investments since they knew they could face legal troubles if they sold them as such. They are the modern version of timeshares only much more expensive!!! I believe they will be bought back by the company who sold them for 50 cents on the dollar. They will in effect get a building for half the cost it took to build the thing. The condo hotel was designed to reduce the capital necessary by the casino to be able to develop the land and get more people to their casinos to gamble. They also get a huge cut to manage the propety so it is a win win for them. the only loser is the people who bought into the idea without understanding what they were buying into.
It’s always Darwinist, survival of the fittest.
Anyone see the article today in the Union Tribune?
Perfume, pig; apply liberally the first to the second.
Josh
If he/she would have taken some blame as a realtor I really would have been impressed. Instead they tried to pass the buck.
Hunh??
You’re kidding right?
not in the least
After reading it again just how exactly is he passing the buck.
Not once does he not the complicity of realtors in it. He himself is realtor. Hence passing the buck.
Actually I don’t blame the realtors. If every sale was FSBO the end results would be the same. It’s the idiot buyers, and the idiots who loaned them money, who are responsible. Realtors are just trying to make as much business for themselves as they can, like anyone else. They didn’t force anyone to buy.
I don’t believe every realtor is to blame but many of the joined in on the practice of appraiser shopping which makes them culpable in this.
Then logically, all people involved in the mortgage business are to blame for this mess as well….right Ken?
Well, MDMORTGAGE GUY …Nobody is saying that everybody in the business was a creep . Based on alot of posts for months it is apparent that a certain % of mortgage agents did not care what they said to sell a loan and did not care if the final bagholder lender got a bad loan in spite of the pretty package .
Also the easy money was a big factor in the mania run-up .
There is no question that many buyers and seller jumped into the uptick real estate market out of greed or fear .
It has been documented on this site how alot of these mortgage people sold loans to people who could not really qualify for the adjusted up payment .
The real estate industry in general was making alot of money ,so I’m sure that made it easier to justify the BIG
BLACK LIES that were told .
I never said every person in every aspect of the RE bubble is crooked but every aspect (lenders, developers, realtors, appraisers & even buyers) had unscrupulous people. The fact that this guy failed to hold realtors culpable at all and the fact that he is one himself makes this letter ring hollow to me.
MDMORTGAGEGUY:
I’ve seen your posts here, and I know you claim to be one of the few good mortgage brokers who are/were trying not to overinflate appraisals. Here is why Ken is really saying realtors and mortgage borkers are culpable, and yes even most of the “good” ones: you’ve come along for the ride. I’m not saying you have knowingly let falsified and overinflated appraisals determine your lending standards, but as the bubble mania fueled speculation, you have still been writing mortages based on the inflated values. Had there been a dedicated group of realtors or mortage lenders fighting the hype, making sure the newspapers were reporting on the overinflation of housing, and had you been a part of this group fighting the fraud rampant in your industry, then you could say you’re not culpable, as could the realtors in such a group. But the simple fact is, you went along for the ride. I would be willing to bet that during these times of inflated mortgages, you weren’t cutting your brokerage rebates back to the client, or reducing points fees either. It’s fine to say you weren’t trying to fuel the speculation, but you certainly took advantage of it.
I live in Vegas, and from my perspective, this realtor told it like it is. I don’t think he passed the buck at all.
I think what Ken is trying to say is that the realtors helped fuel the mania that pulled alot of investors to Las Vegas, that ran up the prices and priced the locals out .
I found this realtor to be very honest about the current situation however ,and I liked how he was trying to warn sellers not to engage in the inflated appraisal fraud .
Geesh Guys!! It is a bubble!!! All kinds of stuff happens during bubbles. If people committed outright fraud, or were unethical, that is one thing. Here, however, you are basically asking anyone in the RE industry to leave their careers once a bubble appears. That will never happen, so you should ease up a bit.
Paul
LV Landlord Where are you? What is the address of that trash can you NOW live in? I thought LV was immune to ANY downturn? Hello?? I can’t hear you??
Vegas Gal is on the wsj blog bragging how she extracted equity from her rentals to leverage into 2 more investment properties.
Southern California home prices hold as sales continue to slow
By Annette Haddad, Times Staff Writer
10:31 AM PST, November 14, 2006
Southern California home prices remained in a holding pattern last month while sales continued to decline, albeit at a slower pace, data released today showed.
The median price of all types of homes sold in October was $484,000, which was the same as in September, and 2.3% higher than a year ago, La Jolla-based research firm DataQuick Information Systems reported.
Meanwhile, sales in the six-county region fell 22.4% to 22,117, DataQuick said. It was the worst showing for an October in a decade, but the rate of decline was the slowest since July.
1. The median home price is a misleading stat at best.
2. That stat doesn’t figure in all the seller concessions such as closing costs, cash back at closing, cars, kitchens, pools, etc.
3. EVEN if that stat had substance…with the increasing inventories, and declining sales pace…what is the next logical step???
This ain’t rocket science people….it just takes time! 2007 will be the year things REALLY get interesting.
SoCalMtgGuy
http://www.housingbubblecasualty.com
http://www.housingbubblecasualty.com/forum
2007 will be the year things REALLY get interesting.
Yep. About 2Q 2007. Very interesting.
The first quarter will be the warmup. The start of the second quarter I expect a return of seller optimism (spring selling season). By the end of the 2nd quarter and the missed selling season and inventory buildup… the bottom starts to fall out.
This is pretty classic. Sales always drop when the expected appreciation rate declines. Cest la vie. It wouldn’t matter… except for the inventory…
Neil
Is there a particular reason to expect a specific time lag between inventory buildup and price declines? Not arguing with anyone, just asking.
Because home prices are “sticky”.
Really, it just takes time to sell a house combined with the exact reasons stated above. As it gets warmer/past the holidays people there will be a bit of a bounce, with the reduced inventory pulled waiting for spring… causing sellers to hang on in the hopes of getting the 2005/6 fantasy price. And then the 2006 cycle repeats itself even worse… HIGHER inventory, FEWER buyers, MORE foreclosures. Wash, rinse, repeat.
Yes…
Real estate is not an ‘instant’ transaction like a stock. Not only that, that increase in inventory will eventually induce competition for the sellers that want OUT of their particular situation. Many are still clutching appraisals from 10-24 months ago, and thinking that is what their property is still ‘worth’.
Unlike the stock market, you don’t have a central ‘market maker’ putting buyers and sellers together. You have a bunch of individuals making unrelated transactions. The data is slower recording and reaching the public as data.
All of these things are why it takes time. First step is houses on market longer. Then more houses coming on the market. Then people realize that things have turned, then they start to adjust prices accordingly after they see that ‘waiting for the perfect buyer’, or ‘burying a statue of St. Joseph’ isn’t working.
All in due time. It took 5-8 years to get here…it will take more than a few quarters to sort things out. 2007 will be the year when things really get interesting. Especially once we get 5-6 months into it.
SoCalMtgGuy
http://www.housingbubblecasualty.com
http://www.housingbubblecasualty.com/forum
Well said.
Even knowing the facts and such… at times it is like watching paint dry. We have to wait for foreclosures to build up, enough of them sell to depress other home prices, and have another round of foreclosures hit the market. Considering it takes 5+ months to get to REO after the start of the foreclosure process… We’re in for a long wait.
Then again, I’ve seen prices drop $250k for the homes I like in my area in 9 months… that’s $1k/day for my patience!
The wait is obviously why I bought a wine fridge; so I have something else to occupy my time.
Neil
Neil,
I think just as everyone in the industry remarks about how quickly - like a switch was flipped - the market turned south we will look back at a point when prices just started falling like they were pushed off a cliff.
The reason being is that there is absolutely no savings for many of these bagholders to bleed off as they try to hold on to their properties and just as soon as the credit card companies start cutting people off we will see prices plummet as the towel is thrown in on a national level.
Unlike the stock market, you don’t have a central ‘market maker’ putting buyers and sellers together. You have a bunch of individuals making unrelated transactions. The data is slower recording and reaching the public as data.
You also have a cartel that controls a substantial portion of real estate transactions, and engages in practices that make it very difficult for any independent observer to gauge the market data accurately.
Seeing the Southland numbers come out today made me wonder something. Please, gang, let me know if I’m wrong on this one, but aren’t all reported sales numbers (even the ones they take down at the county recorders’ offices) provided by Realtors (TM)? Is there anyone checking these?
In other words, if Realtors wanted to make things seem better than they were, what prevents them from erroneously reporting sales prices as higher than they actually were? Just curious how the reporting process works since all data seems to be based on either NAR or county recorder numbers.
“Fifty percent of the homes on the resale market are non-owner occupied.”
Not only that, but many of the non-owner occupied homes that I’ve seen on the market here in Vegas are vacant and already in need of some repair.
Ben, I just looked at the slide show and this is going to get real ugly. Who was the genius that decided to build all this? There are going to be a lot of empty houses for the next several years, if not a full decade, esp. at the wishing prices of some of these developers. I can’t believe all the areas that have been built up. All I can say is that during the next 20-30 years we are going to see alot of pissed off commuters. I used to live in Fontana and drove to South OC for 3 years. I can’t imagine anyone for any amount of money or house driving from darn near Redlands to LA or the OC, let alone living out there in the desert. AS I always say, there is a reason it is the desert and not just because it is derserted. Crikey, is all I can say.
I don’t get why people would want to live in Vegas anyway ! Sure, its got the strip but other than that its just a city in the desert. Or am I missing something ? Doesn’t gambling and the strip get old after a while ?
Everyone is moving to Vegas because there are so many jobs there building houses for the people who are moving to Vegas, and these new people need houses, so more houses are built by the people who are moving to Vegas to build houses for the people who are moving to Vegas.
Get it?
There is a certain nugget of likely demand arising from NV’s having 0% personal income tax. A corollary, though, is that people who live in LV are LESS likely to need to bury their assets in real property !
I ask myself that question everyday. I live here because of a good union job which 3 years ago was difficult to find. Although I’m finding it harder and harder to stay and justisfy living here.
Cost of living increasing every year, homes no longer an option unless you want to live on ramans, increased pollution and traffic, lack of progressive municipal projects and activities, same tired video poker bars, overpriced entertainment, tourists, unbearable heat 6 months out of the year, Californicators, extremes of wealth distribution, and my favorite lots of rednecks. Should I go on? So in essence what holds me here is a fairly good job and low taxes. But as I get older and more experienced I start to yearn for a nice small to mid sized city. Either that or if I’m gonna rent a nice scenic city.
For the people who grew up there like me, the attraction is in its uniqueness. It is one of those towns – and I don’t know of any other – where you live in a mid-size city with the mid-size feel, but have access to the metropolitan lifestyle that is the Strip. The Strip has evolved over the years into the glitz and prestige of the NYC or LA with its extensive list of restaurants, celebrities, high priced stores, nightlife, etc. Then you go home to your suburban setting in matter of minutes, with all the conveniences of walking your dog in safety, wide open streets, strip malls, and gas stations around the corner. That is something you can’t get anywhere else. I happen to still like Vegas, although I can certainly do without the heat.
Was oil discovered under one of the WCI towers? The stock went up 12.5% today. The HB’s are the stockmarket equivalent of Weebles.
Weebles wobble but they don’t fall down… cheery! I wish I was building houses for a living!
P’cola Popper, WCI went up because Carl Icahn bought a large share in the company. From a quick google search:
About this article:
Shares of WCI Communities are up some 15% today on news that Carl Icahn has taken a 1.6-million-share stake in the company. This would represent about 3.8% of the outstanding shares, which is below levels that require making a public filing of the holdings. That being said, no one seems to be trying to keep the purchase a big secret, which makes sense. Now that Icahn wears the “activist” hat, his approach has been to make a noisy entrance full of proposals and intentions without necessarily committing to implantation. Then once the stock gets a lift and he gets some concessions, he quietly walks away with a nice profit. Plenty of people like trying to ride his coattails to relatively short-term gains and have been piling into WCO calls. The most popular strike has been the March $17.50 call which has seen open interest quadruple…
Thanks for the info - I wondered. My ‘08 puts didn’t go down by a proportionate amount, so I guess nobody is thinking of this as having long-term impact. I mean really, what is a shareholder activist going to do? Force them to take out twice as many loans to buy back twice as many shares and then bust the loan covenants twice as fast?
Thanks for the info bubbleboi!
How is this any different than a pump & dump scheme?
I like how all the homebuilders quote the median prices thinking that people won’t notice how much stuff they are throwing in to sweeten the deal.
Isn’t that mortgage fraud ? When a bank writes a RE deal for $500K, don’t they have to write it as $450K of house and $50K of vehicles, trips, interest concessions, etc ?
Can you imagine being the bank and repossessing the $500K home to find that its really worth $450K or less and that $50K was consumed as a new vehicle, a trip and a kickback.
Funny nobody and certainly not the press is saying anything about this.
If a car was part of the house purchase and the bank subsequently forecloses on the property, does the bank get the car as well? I’ve never been clear on this.
I’d be shocked if the car was actually “part” of the mortgage. The whole point of this is to inflate the loan value with a kickback. To think about it another way, what if the car were simply cash? I can’t see how a bank would accept a 500k mortgage which actually said it was for a 450k house and 50k cash.
This has been a pet peeve of mind for a long time . IMHO if you give 50K in incentive kickbacks your appraisal value must be lowered to account for that . As long as the builders have their “special lenders’, God knows how they are writing up these incentive deals .There are many reasons why these incentive deals might come back to haunt the industry .
Some suggestions below :(Course it all depends on how people are disclosing these deals to the lender ).
(1)Possible fraud to the lender by over inflated appraisals to cover incentives .
(2) Possible IRS liability on the gift of a car etc.
(3) Lack of appraisal being lowered because of incentives ,thus fraud to the final bagholder lender on real risk ,forcing lender without knowledge to give a higher loan amount than warranted .( also violation of RESPA and Truth in Lending )
(4) Possible IRS problems on a purchase money loan in that personal property items ,(like a car ) are included in purchase price ,thus ,inflated values based on non-real property items .
(5) Possible false inflation of property taxes ,causing the whole community to pay higher taxes than warranted .
IMHO , I agree with you that Lenders would not accept this and I just would like to know how the builders etc. are getting away with it .
I don’t know how that that little yellow circle man got on my post ,I didn’t put it there .
See, first of all, I don’t get how these kickbacks work and get recorded. We’ve all read the stories of sellers throwing in a new car to sell their house. So lets say the house price is $500K. The buyer has $50K cash and goes to the bank for a $450K mortgage. Lets say the car is worth $25K. How does the car get recorded in the transaction, or does it just appear in the driveway ? Hmmm…
Secondly, when the real estate brokers association collects the stats for that sale, did the house sell for $475K or $500K ? If I read this situation correctly, the throw ins are being done to avoid the appearance of dropping prices, which kill comps.
: ( with no space =
only the house is collateralized.
Please consult Casey Serin on the details and myriad benefits of such a cash-back transaction. I am sure for a consultant fee he will share his infinite wisdom with you. I understand he needs the money, so you can probably negotiate him down. Oh, wait a second, that’s right, he shares in excruciatingly painless detail on his own “Look at me I’m a criminal, read all about it.” website. Just go there.
sorry. PainFULL detail. It certainly is not painless.
tweedle-dee…It’s just that the appraiser and underwriter for the loan needs to know about the 25k car incentive to determine what the appraised value of the property would be without the incentive . Usually if a person has to give away a 25K item to get someone to buy ,the buyer would not of bought without that kickback of a car or 25k cash value.
So the lender might lower the appraisal by 25K ,(the value of the car ), and give a lower loan amount . Than the issue come in about why should the purchase price be 500K in your example because effective the buyer is paying $475k for the house ,considering the car kickback . It inflates the property taxes as well as the comps for the area ,( if it’s recorded as a 500k sale it’s a effective inflated appraisal to cover the incentive ).
So if it’s recorded as a 500k sale , the next lenders appraiser looks at the comp on the record ,(and doesn’t know about the incentive kickback ,and doesn’t know the area has declined in value ),so that lender gives another borrower a higher refinance than they deserve or what the final bagholder lender would of liked to of risked .
So really it depends on how the deal is written up and how it is recorded and what is disclosed to the lender as to what the sales price is . You can see that deals like this can give a very false impression of what the market comp value of a area is .
Regardless of what these people do, there are still way too many houses that were built. If 50% of the houses for sale are unoccupied in LV, the prices will have to go down for them to sell. And even some might never sell.
I think you are right, smf. There are going to be a lot of houses, nationwide, not just in LV, that will never sell. There just isn’t enough demand for the exotic loans it takes for one to buy these babies. All the GFs are in the game now. Only those with common sense or somehow can’t get a loan are on the sidelines, other than those who own free and clear title. Now, if some of these homes were going for say, 100K, I think they would seriously move. It’s like the last entry Ben made. Who on earth is buying 500K homes in Arkansas. I’ve benn there. It is beautiful country, but 500K in Arky should get me a mansion w/pool, spa, butler, maid, cleaner, housekeeper, personal chef, and tutors for my children. Who are these developers building for, anyway?
Oh they’ll sell all right. If not by the “owners”, by the banks, cities, or IRS. Barring places like Buffalo or Detroit (or their future counterparts), if a house is worth living in somebody is going to pay something to live in it. All it takes is a seller who is willing to face reality.
“‘Las Vegas does have an overhang of housing, but that overhang is coming down quickly. There’s only 280 (high-rise) units available for sale, so I think we’re at the end of the bust,’ he said.”
Uh, Mr. Fifield, did you not notice the 6,261 condo/townhomes currently on the market, or the 4,800 currently under construction, or the 95,647 existing or planned luxury condo units? No, the end of the bust is still quite a ways off in the distance. But go ahead, build some more condos that will look great through your rose-colored glasses. The rest of us see the reality.
Immediately before your quote, he states:
Public home builders are unloading land. They’ve got an unsold inventory of homes.
Doesn’t sound like the public home builders believe we’re at the end of the bust. He’s whistling past the graveyard.
Is http://www.dqnews.com down or what? Any reason? Did Dataquick go out of business?
Low functioning members of the REIC should stay away from high concepts such as “Darwinist” or “supply and demand” and stick to meaningless business speak like “synergy”.
Although I had a great time in Vegas (I love kitsch) I would hesitate to invest in real estate there. The city needs a tremendous amount of electricity just to function, much less attract tourists. What if there was a severe energy shortage? And what about a water shortage down the line?
I just returned from Vegas and was driving around Summerlin. I noticed several homes for sale that were built in the last year or 2 and I would say about 20% were a for sale by owner or a flat fee broker. I don’t think the numbers people are quoting accurately reflect the situation. I also looked in some of the homes and many were empty. I spoke to several locals and they all say the market is tanking and especially in the high end. Most jobs that have been created lately can’t afford but the most basic home there at the current prices that are being asked. many ads state $50 thousand under appraisal or priced below market. All part of the the marketing ploy to get buyers to buy when everyone knows that they are better off waiting. 2Q-3Q 2007 is when the price stickines breaks. Vegas is still kicking on all cylinders when it comes to the Strip so until people stop coming to Vegas to gamble it should weather the storm quicker then most but I think the storm will be more buital while it lasts.
The Strip has evolved over the years into the glitz and prestige of the NYC or LA with its extensive list of restaurants, celebrities, high priced stores, nightlife, etc.
The Strip will never match the culture of NYC
But Las Vegas does have the Nevada Test site 60 miles away, where the trash from hundreds of above groung atomic bomb tests still litters the ground. I love the road signs in the test site that say” Do not Touch metal on the ground”. Oh yeah, Yucca Mountain is about 90 miles from the LV airport, this is where we will be storing all of our High level radioactive waste in the near future. Remember “the Atomic Cafe”? It still exists in Mercury Navada about 65 miles from the LV airport. I love the picture on the wall of the world famous “welcome to Las Vegas ” sign with a mushroom cloud behind it.
Folks wake up, LV is an old radioactive waste dump and every time it rains more washes into the Colorado river, no one gets drinking water from there do they?
Sure, no one gets water from the Colorado. Just the ENTIRE FREAKING SOUTHWEST.
http://en.wikipedia.org/wiki/Colorado_River_Compact
‘The hard thing about condo-hotel is it doesn’t pencil out from an investment standpoint,’ Applied Analysis principal Jeremy Aguero said. ‘It’s problematic from the consumer side. We’ve heard some buyers grumbling about the money they’re getting back (on condo-hotel rentals).’
LOL. I bet they’re grumbling.
Didn’t they know that LV is the center of gambling?
They should know that the house always wins.
In a few years when we review the transcripts of Ben’s blog through this current period, two main themes will emerge:
1) Many REIC spinsters tried very hard to ignore the elephant in the room.
2) The elephant in the room was inventory, and it just kept growing and growing and growing, no matter what anyone said or did.