A “Continuing Correction Of Supply And Demand”
In Business Las Vegas reports from Nevada. “The price of new homes has tumbled nearly 10 percent this year, the inventory of existing homes has reached an all-time high and bank repossessions accounted for a greater percentage of existing home sales in Las Vegas, according to the March housing statistics. The median price of new homes sold in March was $308,471, down nearly 10 percent from $341,990 in December.”
“The new-home market rebounded slightly in March with 1,771 sales, up 330 from February, but sales were down nearly 51 percent from March 2006.”
“Dennis Smith’s HomeBuilders Research reported Tuesday that there were 5,204 new-home sales in the first quarter, the fewest since 2001. ‘The first quarter of 2007 will go into the archives as one that most in the homebuilding industry would like to forget,’ Smith said.”
“Don Boettcher, an area VP with Pulte Homes, said the price reductions are a reflection of the softening housing market. In a competitive market, it’s part of a ‘continuing correction of supply and demand.’”
“Since January, Smith said the price of new homes has dropped nearly $29,000 or 9 percent. He attributes part of the decrease to sales of condos on Las Vegas Boulevard South, with 37 at one project selling for less than $300,000.”
“On the existing home market…402 or 13 percent of those 3,175 sales were bank repossessions, the first time that figure has reached double-digits in Las Vegas in history, SalesTraq reported.”
“Bank repossessions accounted for 9 percent of the existing home closings in January and February.”
“The drop in new-home prices isn’t surprising given the large number of existing homes on the market, said Monica Caruso, spokeswoman of the Nevada Home Builders Association. SalesTraq reported the 22,970 existing homes on the market in March was the highest in history and represents a 13-month supply.”
“‘It is having a tremendous impact (on new home sales and prices) because there are a significant number of existing homes that are essentially brand new homes,’ Caruso said. ‘They have never been lived in. Homebuilders are competing against that housing. This has to do with supply. If new homes are sitting on the market and not selling, prices have to come down.’”
“That competition is borne out because 44 percent of homes listed for sale on the MLS remain vacant, SalesTraq reported.”
The Record Courier from Nevada. “As the hot, summer, home-selling season approaches, builders and agents are confident that decreasing prices will draw more buyers to Carson City.”
“Average home prices have stayed in the mid-to-low $300,000 range. Median prices reveal a market that has dipped back under the $300,000 mark.”
“Last year, Carson City’s housing market saw the fewest number of homes sold in 18 years, at the largest average sale price ever recorded by the city assessor’s office, which has tracked all home sales since 1988.”
“Residential home building will increase in the next few months, said Rick DeMar, CEO of the Builders Association of Western Nevada.”
The Arizona Republic. “It’s now been one year since work stopped on Elevation Chandler, the forlorn skeleton of a high-rise hotel next to Chandler Fashion Center.”
“Last April, workers walked off the job because they weren’t getting paid by developer Jeff Cline. Now, after a year that included liens and settlements, the property is for sale.”
“‘We certainly hope someone comes along with the wherewithal to finish it,’ said Doug Ballard, the city’s director of planning and development.”
The Salt Lake Tribune from Utah. “Wasatch Front real estate agents say the changing market represents some challenges for both buyers and sellers. Trying to move a higher-priced home? Be prepared to face longer waits or drop your asking price.”
“The market may be slowing, but make a lowball offer at your own risk. Some sellers, burdened with large first and second mortgages, simply cannot lower their asking price much.”
“Salt Lake County’s median selling price was up nearly 20 percent in the first quarter to $241,000 compared with the first three months in 2006, according to the Salt Lake Board of Realtors report. Davis County prices were up 25 percent to $218,000, while Tooele jumped nearly 31 percent.”
“Four percent fewer homes sold in Salt Lake County in the first quarter of 2007 compared with 2006. Sales were down nearly 2 percent in Davis and Tooele counties; Salt Lake County was off more than 4 percent.”
“Those aren’t bubble-bursting drops by any means. But ‘things are definitely slowing down a bit, especially in the higher price ranges,’ said Gary Cannon, president of the Salt Lake Board of Realtors.”
“Linda Coleman, a real estate agent specializing in the Sandy-Draper area, said she has been amazed at how much the asking price influences how long it takes to sell a home right now. Coleman said in her area of the valley, homes under $400,000 are still selling briskly. Above that amount? ‘It’s going to sit on the market for a while,’ she said.”
“Her advice for sellers is to get real: ‘People are thinking the market is as good as it was last year,’ she said. ‘It’s not.’”
It’s interesting that these folks in Utah can’t see what’s coming.
“The market may be slowing, but make a lowball offer at your own risk. Some sellers, burdened with large first and second mortgages, simply cannot lower their asking price much.”
What risk? It costs me nothing to get turned down on a lowball offer. Paying too much in a falling market, however….
it’s the same dilema. to bleed slowly or in one big swoop.
anyhow, people, especially in the realtor business, are just funny. they can keep such a straight face on when saying the most obvious and contradictory things. sometimes i feel like they think they are dealing with children. funny but sad.
The buyers from 2004-2006 had the economic sense of children.
Maybe that’s because Utah homeowners ARE children. I swear everyone gets married, bears crotch fruit, and buys a home between their 21st and 22nd birthdays. I can make fun, because I’m a MoMo myself. Maybe our population of kids playing house is to blame for the high personal bankruptcy rate here! And the fact that 26% of home loans are subprime!
I’m 25 and pretty much all of my peers have $40k downpayments because the house their previous house sold for 25% more than they bought it for. It really pisses me off.
but it’s different here in Utah…
Yeah, I was thinking the same thing. Risk of what?
Risk that it might be accepted.
“but make a lowball offer at your own risk”
There is no stinking risk at making a lowball offer. The lowball buyer has nothing to loose, unless they pay too much.
I’ve seen it firsthand, the people who cannot lower their asking price much. Usually it’s the folks who bought overpriced upgrades and expect the resale market to value them dollar for dollar. And then there’s the plethora of spec homes in the $600k range in north Utah county (complete with unfinished basements and zero landscaping, help me please). I truly think these custom builders are expecting CA folks to bail them out, since the average Utahn wouldn’t dream of buying these stucco boxes.
“The market may be slowing, but make a lowball offer at your own risk. Some sellers, burdened with large first and second mortgages, simply cannot lower their asking price much.”
Well Ben, from this article it’s obvious that there’s a law in Utah that prohibits home owners from lowering their asking price if it means losing money. And apparently it’s inadvisable to offer less than the asking price, unless you’re the bungie-jumping, shark-diving ‘risky’ type that could withstand the ghastly consequences of such gall.
That’s why I say they are apparently blind to what’s ahead. Utah just got on the wagon a little later than most places, and some of these over-leveraged folk will be putting pressure on prices soon enough.
No, they really can’t. I have a friend in the mortgatge business in Utah who still thinks Californians coming in are going to prop up prices until the cows come home. Another one who’ll learn the hard way.
You need to tell you friend that Californians are losing equity in a fast, bad way. Those cows look to be heading home…and fast, too.
I may be generalizing a bit, but I have met few people who lived in the Salt Lake area and liked it. It’s a beautiful area, but it’s still a bastion of conservative and dominant Mormon values that makes it difficult for “outsiders” to integrate into the local area and feel comfortable. While a certain segment of Californians may be attracted to the city, the culture may turn off a lot of people—especially liberal Californians.
Californians should feel right at home in SLC, it’s on the Wasatch Fault, which is predicted to go any day and be as big as anything the San Andreas ever saw. Geologists say it goes every 300 years and the big eathrquake is currently 600 years overdue. SLC is trying to make its buildings earthquake prone, but everything’s retroactive at this point, which is hard to do.
I moved to Utah from Texas 10 years ago. It is a beautiful place with spectacular mountains and deserts. While the state as a whole is conservative, Salt Lake City itself is pretty liberal. The district I am in has a dem in Congress and our Mayor, Rocky Anderson, is pretty well known for his Bush-bashing antics and environmental work. There are lots of outdoors types who are generally left-leaning who move here. I work around the University of Utah where I feel very comfortable being agnostic.
I am patiently waiting for the housing downturn. Many I talk to think that housing prices will continue to climb as long as people move here and the population expands irrespective of average salaries (below national average). I mention that the huge and dense populations of places like Calcutta haven’t automatically translated into astronomical prices; a comment that usually elicits silence.
I’ve been in Salt Lake a lot recently (eye surgery for my dog) and it’s weird to pick up a real estate magazine that doesn’t have any prices - it’s impossible to guage what things are selling for. You have to actually call the realtor to even get a price. Went to Park City one day and all the prices are in their Re mags (way expensive and very ugly place with all the build-up), so it’s not a state law or anything. ANyway, having bought and sold RE in Utah (Moab), it’s nearly impossible to know what a house sells for, as it’s not public knowledge. The only ones who know are the ones who actually sold/bought, except for the title cos. Makes it very hard to track anything. The state sends out a form when you buy that makes it sound like you have to tell them what you paid, but most people ignore it and after two tries they quit asking. It’s totally illegal to tell anyone, even the realtors don’t want you to talk about your deal, even after it’s all over. Just like their dominant religion, it’s a closed system. This kid of stuff breeds an oppressive environment.
Correction - shouldn’t say it’s illegal to tell people what you bought/sold for, it’s just not part of the RE culture there, they want to keep it all a closed system. Easier to rip people off.
I rent in the Avenues area and we get a newsletter every few months that states asking price and selling price. So it seems open in this neighborhood. They don’t tell you if they have been relisted though. And they have been, I have been keeping track.
LOTS of construction and things for sale in Park City. I found nothing under $1M in Park City. A block off Main were newish townhomes for over $1M. Maybe 1800sf. Most listings had a box of flyers with prices that I saw.
There is some stuff under 1 mil, but usually condos or SFH in less desirable areas. The cheapest I saw was around 400k. II spent some time there a few days ago, drove all over, the RE mags there actually had prices and some places were reduced. Couldn’t believe the big cranes - all I could think was, it’s gonna hit hard here. I’m an hour from Telluride, and it’s hitting there, some major price reductions, but when you start at 2 mil or more, it’s all pretty surreal to me. W. Colorado is slowing WAY down, have seen some major reductions, but it hasn’t hit here like some places (yet).
“The drop in new-home prices isn’t surprising” given the large number of existing homes on the market, said Monica Caruso, spokeswoman of the Nevada Home Builders Association
Dah! Where was the spokeswoman Nevada Home Builders Ass. in April 2006 telling her members that there was a bubble on the horizon and they shouldn’t be building so many new homes, based on the history of the previous boom/bust cycle. And now she “isn’t surpirsed” Thanks for the Monday Morning quarterbacking after you lost the game “big-time” Everyone is covering their A$$ waiting for the tsunami.
““The market may be slowing, but make a lowball offer at your own risk…”
More like “Make a lowball offer at your own BENEFIT.”
..or, in my case, don’t make any offers at all. (at least for a few years)
“The market may be slowing, but make a lowball offer at your own risk. Some sellers, burdened with large first and second mortgages, simply cannot lower their asking price much.”
Gee, I guess buyers will just have to raise their offers to accomodate the sellers. Perhaps a bidding war would make the sellers happier.
“but make a lowball offer at your own risk…burdened with large first and second mortgages”
Maybe I’ll just have to be content to lowball the Banks and MBS servicing companies in 3 years.
My own risk my @ss. I don’t HAVE TO buy.
“Don Boettcher, an area VP with Pulte Homes, said the price reductions are a reflection of the softening housing market. In a competitive market, it’s part of a ‘continuing correction of supply and demand.’”
Ok…No big deal….just a normal market……Now excuse me……..I’m going to go get drunk.
Ok…No big deal….just a normal market……Now excuse me……..I’m going to go get drunk
LOL. first I’m gonna bother everybody I meet. Then I’ll go home and get drunk
“SalesTraq reported the 22,970 existing homes on the market in March was the highest in history and represents a 13-month supply.”
But…but…but…there are 20 billion people moving to Las Vegas every second (becasue of the jobs), and even though Las Vegas is located in the middle of vast expanses of desert, the BLM owns all of it, and would never think of selling it off, so Las Vegas real estate prices will hold…right? RIGHT? EVERYONE WANTS TO LIVE THERE, IT’S GOING TO BE THE NEXT GREAT AMERICAN CITY.
(I almost giggled myself to death posting this one)
Nothing like a good ‘ol kickback.
http://www.suntimes.com/news/politics/352181,CST-NWS-bribe21.article
True story:
This morning I was cleaning up after cooking breakfast. I accidentally dropped a knife right above my dog’s head who was licking the cutting board. Without thinking, my other hand flashed down and grabbed it out of the air by the flat of the blade. The point left a small puncture and spot of blood in my palm. Within about 10 milliseconds, literally the first thought in my head was of HBB.
I thought, “Yup, probably ought to hold off for a few more years…”
I bet you have a happy dog. Great story.
“Linda Coleman, a real estate agent specializing in the Sandy-Draper area, said she has been amazed at how much the asking price influences how long it takes to sell a home right now.”
this woman’s been eating retard sandwiches.
it sure sounds like it - must be all that mercury in the water from the great Salt Lake
No, no, no! It’s all the green jello, the Utah state food. I’m not kidding! Every buffet in the state has it.
I know what it is, you can’t order a burger there cooked medium, some state rule it has to be well done, they are over cooking the burgers and it makes them retarded.
all those free radicals in the charcoal, eh?
But does the jello have anything in it like pineapple chuncks or carrot slivers? I’m sure as the housing ATMs continue to empty out in Utah people will be eating jello at Barf-A-Rama next to the homeless on 4th South.
I posted this over in the local observations before I realized there was an article on Utah. Good timing:
Any Utahns here? I was in SLC two weeks ago. Being the curious person I am, I took a drive up I-15 toward Ogden. In Kaysville, I noticed a house farm so I pulled off the highway to take a look. I happened upon Sunset Equestrian Estates.
OMFG, I thought you Nevadans and Arizonans were joking when you’ve talked about whole neighborhoods of vacant homes. Well, I drove through what was over 1 sq. mile of vacant homes in various states of completion. Street after street of front yards of dirt and for sale signs. Down one cul-de-sac I found ONE homeowner with, you guessed it, a FSBO sign out front. Very young family with no neighbors anywhere (unless you count backhoes and piles of 2×6s).
I think those people might have been renters. I looked up the house at the county and it appears to be owned by 2 brothers at a different mailing address in Layton. Specuvestors I suspect.
Unfortunately I only had the camera on my phone which didn’t do the house farm justice.
On the way back to SLC after dark, I noticed several other newish looking developments with very few lights on. (just south of Ogden, east side of I-15)
Can you say housing surplus? I knew you could.
PS - As far as Californians, I saw very few CA plates when I was in UT as opposed to OR where I still see a bunch. Being a housing freak, I tend to look at license plates as a piece of anecdotal evidence.
“Last April, workers walked off the job because they weren’t getting paid by developer Jeff Cline. Now, after a year that included liens and settlements, the property is for sale.”
“‘We certainly hope someone comes along with the wherewithal to finish it,’ said Doug Ballard, the city’s director of planning and development.”
Didn’t Cline, just a very short while ago, in the AZRepublic, say everything was peachy and he was obtaining fresh financing?
Prediction: the buyers of the Desert Ridge land are gonna try to flip it within the year.
The AZ game is OVER.
I agree, Utah sucks. Don’t come here, you’ll hate it.
Go to Oregon, they love all of you Clownifornians. You’ve already contributed mightily to screwing up a decent housing market.
I do so enjoy hearing how much we in Utah need to become more like your ‘golden’ state. Please go home!
Like I said, you will be oppressed here, stay in California!!
(Heh)
jb
JB, reminds me of a bumper sticker I saw in Jackson:
Jackson Hole sucks, tell your friends.
I have lived in the southwest my entire life. Los Angeles, San Diego, Tucson and Las Vegas. And really, the true sadness to all of this is the proliferation of frame-stucco. Millions of these god-awful structures, crowded together on thousands of acres of desolate, yet once beautiful desert, is an insult to the senses.
Yeah, sure, there are frame-stucco houses that look impressive. But in reality, mock tile roofs and portmanteaus do not improve what is, basically, a box made of wood and mud.
Of course, acres of scrub and measly, struggling yucca aren’t all that beauteous, but my god, it was far preferable to the acres and acres of mud-and-stick boxes with ten feet of space between them we have now in all of these locations.
And what is going to happen to the eternal waves of stucco once the baby-boomers are gone? With any luck, in fifty years, they’ll all be bulldozed and we can have our pristine desert back.
Yeah, right.