Condo Developers Building And ‘Hoping For A Miracle’
A Las Vegas developer talks about condos. “John Restrepo sat down with In Business Las Vegas to discuss the state of the Las Vegas..real estate market. ‘I think we are going to a period of a more realistic view of our high-rise condo market here. We’ve had a period of irrational exuberance on the high-rise condo market, where we thought the demand would be a lot higher than it has ultimately proven to be. Over the next five years, we’ll probably see 25 percent of the 60,000 (proposed) units actually built.”
“‘Most of the projects have been along the Strip corridor, they’re essentially projects that serve second homebuyers, investors and speculators. That’s why 80 percent of the time these units are dark.’”
“‘A lot of the speculative guys that would tie up a site temporarily and then start flipping it and using a Web site and put a trailer on a vacant lot, those guys have pretty much gone away, for the most part.’”
MSN real estate looks at ‘the great American condo glut.’ “After several years of gung-ho development in south Florida, San Diego, Las Vegas and other major markets, the once-hot condo market is headed for a slump. Condo developers say they have been forced to throw in perks.”
“‘I don’t think there’s a market out there in which developers are not offering some kind of incentives,’ said (lender) Arthur Nevid. Mountain and many other lenders say they have ceased funding most condo projects and are backing away from some projects they had already committed to. Some developers are even giving back the down payments or deposits paid by residents.”
“There hasn’t been a condo boom like this one, economists say, since the late 1980s when rising home prices and out-of-sight interest rates spurred developers to begin churning out a flood of condominiums. Many of these properties wound up back on the market, pushing prices down further. Economists are concerned that this same pattern is repeating itself in markets such as Las Vegas, San Diego and Miami, where investors, rather than residents have bought many of the units.”
“And more condos are being added this year, analysts say, putting more pressure on prices. In San Diego, 5,217 condo units were built since 2001, and another 7,235 are under construction or approved. Meanwhile, sales and prices in San Diego have peaked, agents say, and prices are beginning to head south.”
“Owners are now taking price cuts, or renting out their unit until the market improves. San Diego Realtor Cindy Davis is now leasing out a client’s condo that has lingered on the market for 80 days. ‘I’ve told him now he’s not going to get his price. Keeping it on the market and hoping for a miracle is stupid,’ she said. Likewise, Hamrick said, prices have stalled in Las Vegas, and are poised to dip, should more units come back on the market.”
“Even low-key Minneapolis, has been rocked by a condo boom that is threatening to go bust. Last year, 1,326 units sold in the area, up from 557 the year before. And there are currently 4,518 condos under construction or approved for downtown Minneapolis alone, said Mary Bujold.”
And Inman News has the results of a related study. “Single-family homes have the most appeal for aging baby boomers, according to a survey released today. Of those planning to move, 63 percent said they are looking to purchase a single-family home, while 18 percent would purchase a condo or townhouse.”
Thanks to the reader who sent in the MSN link. There are some interesting points in the LV interview:
‘ You’ve talked about a shadow market in the past, could you explain what that is?
The shadow market we estimate is around 170,000 units. That’s comprised of individually owned single-family homes, town homes, and condos. Not all of them are up for rent, but they all are considered by the Clark County Assessors office as commercial properties because they’re paying that 8 percent tax, which indicates that they are potential rentals.’
‘ An economist at a recent Las Vegas multi-housing seminar said that rent growth of 6.5 percent per year cannot be sustained because the population can’t afford it. On the flip side, developers said rent growth is necessary if apartments are to be built in Las Vegas. Can we continue to raise rents? It’s a little bit of both, I hate to give that economist type of answer, but it is. There are limits on how far you can raise the rents above what the renter is willing to pay. At some point if the monthly rental is getting so high, they have to do something, move out of town or get roommates. There are some limits on how high you can go on the rent, but there are some requirements the developers have to make, to make the projects financially feasible, and that’s driven largely by rents against the cost of land and the cost of construction. We’ve had relatively flat rents for a long time. Are rents rising higher than housing prices? If the rents are still relatively cheap then people stay as renters longer. We have to figure out how to get more density per acre, to get as much revenue as the developer needs, but maybe lower it per unit basis on the rental side.’
It’s really simple. Land costs too much in Las Vegas and the rents won’t support it; apparently not even as apartments.
Not sure what you mean by “Land costs too much in Las Vegas and the rents won’t support it; apparently not even as apartments.” Condo builders have been crushing us apartment builders by driving up land costs for the last several years. If it won’t work as a condo site, it sure won’t work as an apartment site.
I have a simple solution for the problem: Expand the prostitution industry in LV. This is guaranteed to generate the rents needed to pay off those apartments, and then some…
You silly, the one thing I truly hate are all the sex brochures they try to hand out on the strip…truly annoying.
Ironically, prositution is legal in Nevada, but illegal in Las Vegas.
OK this is great… Here in Orlando as of last night they have begun advertising condo-conversions on TV. One realtor apparently is running ads after 10pm adverting on TV.
They are holding a “Pre-Public seminar” to discuss these “Great investment opportunities”.
Ok buddy- If its a “pre-public” event why are you advertising it on tv for everyone to attend???
All I have to say about Orlando’s condo market is there are thousands of condo-conversions sitting for sale, some for over a year. Developers are now offering things like one years mortgage payments (about 11-15K). Its only a matter of time before we start seeing them offer a free car with the purchase of a condo.
excuse me, they have enough realtors already.
But I thought hordes of retiring baby-boomers were just waiting to pay me a 20% premium over 2005 prices for attached homes!
They don’t want to deal with landscaping in their free time!
[Note this used to be called "gardening" and was considered something to look forward to in retirement.]
They don’t want to take care of an extra bedroom their kids could use when visiting!
They want to pay arbitrary monthly fees out of their control!
They want to live in close proximity to a bunch of uppity late 20 or early 30-somethings with small children and big pets!
Someone needs to explain this to them more carefully.
You know whats really funny, all the retiring baby boomers cashing in on their homes and leaving the state. My parents were the last baby-boomers I knew who left South Florida, All our freinds and family started leaving in 2004, sold their homes cash to investors and moved to Atlanta.
I could not agree with that survey more, they all left because they did not want to live in condos and when all the investors started moving in they wanted to get away from all the renters moving in. So they sold the home for 3-4 times what they paid 15-20 years ago and moved north, paid cash for homes outside Atlanta and retired a little early. They actually wanted bigger homes so they could have the family over, work in the yard and “not be so crowded in” living in a condo or zero lot homes in Florida. Folks up in Atlanta call all the Florida baby-boomers “Half-Backers”. They moved down to Fl from NY & NJ and then moved half way back north.
here’s the kicker at the end of the article, another would-be Master of the Universe about to learn that those the gods would humble, they first make proud:
LOL. Oh, there’ll be turbulence.
“buy in the right market”
I hope he’s talking about price and not location.
I hate to spoil Ryan’s party, but a SFH house I had been following in La Costa (4/2, 2,000+ SF, with a pool and NO HOA) recently sold for $635,000 after many months on the market. Shhhh…don’t tell Ryan. He probably thinks he got a great deal.
Then drop land prices.
Ben,
>>>> It’s really simple. Land costs too much in Las Vegas and the rents won’t support it; apparently not even as apartments.
Maybe someone will come up with a “creative financing” tool for deferring a portion of rent payments until incomes go up … just like mortgage lenders have been doing for buyers who lack the necessary income to buy homes.
Maybe this is how we keep the party going for awhile longer before the music stops and the dance is over.
They have that already it’s been on the market for a little over a year and a half. It’s what keeps the multi-family market in rent controlled areas moving for the last few years. And it’s going to make for some lovely buys when the bottom falls out.
Got it…. they’ll start doing ground leases under the units.
Story in the OC register about 8 months ago. Buncha houses/condos in the Fountain Valley area where owners found out the hard way. Originally had 50 or 60 year ground leases, prices based on 1940’s–$20-30 /month. Shazaam. End of lease comes up, they find out (hellava time to read the sales contract) that the rent AUTOMATICALLY adjusts to market. OUCH. Like up to $1500-$2000 /month.
From a report on condos in Seattle:
‘Among certain segments of the population, the demand for living in high-density environments is greater than it has been for several decades, creating intense competition and higher prices for living in these locations.’
‘ For downtown Seattle (Interstate 5 to Elliott Bay, Denny Way to Yesler Way) the multiple-family units that were added to the supply between 1990 and 2004 numbered 1,079 (Census). Between 1999 and 2008, the number of units that have been added to the downtown inventory will be approximately 4,200 to 5,070. In two-thirds of the time, nearly four times as many units will be added. On top of that, a new source of supply has evolved: Bellevue. Between 2006 and 2008, it will contribute more than 1,100 high-rise downtown luxury units to the Puget Sound supply.’
‘The second important factor is the substantial supply of condominiums that are in the production pipeline. This numbers some 3,918 units. This is three and one-half times as many units as were produced between 1990 and 2004. All of these projects are entitled or well into the entitlement process. It is quite likely that these projects will proceed through development.’
‘In summary, Seattle’s downtown condominium market is entering a momentous phase. How deep is demand? What will happen to mortgage interest rates and how will they affect demand? Will product choices continue to be broadened? Will historical levels of price appreciation continue?’
Is there is big population explosion that I don’t know about ? If there is , they certainly arent ready to buy right now are they ?
It’s CRAZY; it’s like a contagion up and down the West Coast.
I say: “Seattle condos for everyone!”
The only reason I think condos in Seattle might still sell (once prices plummet)… is because TRAFFIC is a real b!tch in that city, and there will be young, yuppy types that will think it’s cool to commute by public transportation from the condos.
I think condos in downtown LA are popular for the same reason. I just did a search on the MLS for condos in downtown LA and there are only around 50 up for sale. Most are far too expensive, but considering you don’t have to commute to work if you work downtown, they are probably worth more than a home in the exurbs.
“Same as it ever was”
- The Talking Heads, “Once in a Lifetime”
And you may find yourself in a beautiful house, with a beautiful
wife
And you may ask yourself-Well…How did I get here?
Letting the days go by/let the water hold me down
Letting the days go by/water flowing underground
Into the blue again/after the money’s gone
Once in a lifetime/water flowing underground.
Since we’re onto lyrics…
**********
“San Diego Realtor Cindy Davis is now leasing out a client’s condo that has lingered on the market for 80 days. ‘I’ve told him now he’s not going to get his price. Keeping it on the market and hoping for a miracle is stupid,’ she said.”
**********
“I Need A Miracle”
I need a woman ’bout twice my age
A lady of nobility, gentility and rage
Splendor in the dark, lightning on the draw
We’ll go right through the book and break each and every law.
I got a feeling and it won’t go away, oh no
Just one thing then I’ll be ok
I need a miracle every day.
I need a woman ’bout twice my height
Statuesque, raven-dressed, a goddess of the night.
Her secret incantations, a candle burning blue
We’ll consult the spirits maybe they’ll know what to do.
And it’s real and it won’t go away, oh no
I can’t get around and I can’t run away
I need a miracle every day.
I need a woman ’bout twice my weight
A ton of fun who packs a gun with all her freight
Find her in a sideshow leave her in L.A.
Ride her like a surfer running on a tidal wave.
And it’s real, believe what I say, yeah
Just one thing I got to say
I need a miracle every day.
It takes dynamite to get me up
Too much of everything is just enough
One more thing I just got to say
I need a miracle every day,
I need a miracle every day,
I need a miracle every day, (got to be the only way)
I need a miracle
– Grateful Dead
Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone.
If your time to you
Is worth savin’
Then you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’.
Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won’t come again
And don’t speak too soon
For the wheel’s still in spin
And there’s no tellin’ who
That it’s namin’.
For the loser now
Will be later to win
For the times they are a-changin’.
Come senators, congressmen
Please heed the call
Don’t stand in the doorway
Don’t block up the hall
For he that gets hurt
Will be he who has stalled
There’s a battle outside
And it is ragin’.
It’ll soon shake your windows
And rattle your walls
For the times they are a-changin’.
Come mothers and fathers
Throughout the land
And don’t criticize
What you can’t understand
Your sons and your daughters
Are beyond your command
Your old road is
Rapidly agin’.
Please get out of the new one
If you can’t lend your hand
For the times they are a-changin’.
The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
The order is
Rapidly fadin’.
And the first one now
Will later be last
For the times they are a-changin’.
ohmygod I’m loving the musical accompaniment! ’specially the talking heads and dylan, man i’m gonna re-memorize them lyrics and sing while i read everyone’s comments now! maybe singing the time’s they are a-changin’ will help my hubby understand better…music is so powerful! cheers
“Owners are now taking price cuts, or renting out their unit until the market improves”
This is such a joke, I dont think we have even begun to see the tip of the down market yet and these clowns are talking like this is the worst it will get and will improve soon. RE prices have eroneously doubled in a few years based on hype and now these flippers think this is the norm. Whats the world coming to!
An economy based on separating the money from whatever fools have any left.
From the MSN piece:
‘Given the huge supply, agents say it might pay for sellers to hold properties off the market and let demand catch up. ‘This is not the time for a casual seller to place their product on the market,’ in Las Vegas, Hamrick said.’
‘Nor is it time for investors to try to make a quick buck. Units that were increasing in value 30% to 40% annually for the past several years are now stalled. ‘If you think it was a risky idea to flip one, two years ago, it would be an insane idea now,’ the NAHB’s Carliner said.’
agents say it might pay for sellers to hold properties off the market and let demand catch up
I’ll bet some Japanese property investors heard the same advice 15 years ago.
The truth is, real estate agents would desperately like for inventory to come down (it’s creating the perception of panic selling) and they’ll say anything to get people to pull their listings.
How can the perception of panic selling be supported by a mountain of inventory that nobody is buying?
responding to John in VA…..completing his sentence ,” just not my listings..as in some other realtors..
LV market….170,000 shadow units…boy that seems huge …The Condo deals don’t work in LV because the majority of Hotel workers are now Hispanic.. You can’t contract with a contractor who isn’t using Hispanic laberors that can’t speak English…they get paid in cash..
When the contruction boom ends most of the Hispanics will Hi-Tail it out of here for Mexico..where the cost of living (once affordable in LV) no longer works Thcx CALI..
Another reason the Condo/hotles won’t work.. The auxillary shops that are planned near walking distance cannot make money when the Condo-tell is empty….
Why would people invest $500k top 600k plus assoc. RE Taxes and utilities when LUXOR rents rooms below $50 per night except on weekends?
If the real estate people are going to try to convince people to not put their house on the market so they can create a low inventory situation again it would be a false market . Im sure the realtors don’t like this high inventory situation messing up demand . situation = when everybody wants out …nobody wants in .
Sorry I didnt see your post . I said the same thing you did .
Well, great minds think alike!
I’d like to know what a “casual seller” is.
Probably anyone not bent over a barrel.
ROTFLMAO
In this market I’m a casual buyer.
I’m neither casual nor a buyer!
What has been will be again, what has been done will be done again; there is nothing new under the sun. Is there anything of which one can say, “Look! This is something new”? It was here already, long ago; it was here before our time.
Ecclesiastes 1:9-10
Let the church say “Amen”.
BayQT~
Amen
Hey, that internet thing was pretty new, though.
And I/O, Neg Am. 40-50-100 year mortgages in Jesus’ time? Maybe so, and that’s why it went away for a long while.
In that time they lived by the jubilee cycle. Every 50 years all debts were forgiven. Thomas Jefferson wanted an ammendment to the Constitution for a jubilee cycle over the USA. If people knew that every 50 years debts were off the books they would not make bad loans to perpetuate borrowers to large to fail. Are you listening Federal Reserve?
of course, the average lifespan was between 20 & 35 (wikipedia).
So it could be your grandkids (just gotta remember to breed early).
I’ve said it before. From the moment you move the first shovel of dirt to the time you walk away from the whole mess you are “swimming naked” and praying the tide doesn’t go out.
Notice all the “attitude” shifts. No longer is there an urban renaissance, no longer is there a claim of shifting consumer preference, no longer is there an implied investment component. Then there’s:
“…projects that serve second homebuyers, investors and speculators.”
Today’s word is “velocity.” No one has any experience with the downside of the investment velocity of speculation in housing. The DotBomb crisis hastened “circuit breakers” in the stock markets. Same thing here.
People who read my crap know I like history, math and analogy. Truly sad is that the best analogy that comes to mind is the Titanic. Reckless piloting in an effort to set new records, ignoring the danger signs, untested waters and responses, inadequate safeguards, hubris about one’s invincibility, profits and egos overruling common sense, need I go on?
Oh please, continue
Okay; ignoring time tested procedures, claiming this ship is different, imaginings of profits influencing decisions, a stratified class structure that killed the lower class passengers, money buying influence, stewards attempting to assume authority and keep the masses calm, locking upward access with silly regulations, single data points like distress flares mistaken for celebration, luck, timing, the guilty less hurt than the innocent, information withheld at critical moments, wealth unrecoverable for generations, shall I go on?
Please, don’t say yes. The housing bubble is going to hurt so many people for so long. It isn’t gloating and this looks like gloating. I’ve said before, there’s no investment arbitrage to profit from with the bursting. Just stay away and help pick up the pieces.
Yes…lol I also enjoy your thoughts Robert.
Robert,
I enjoy your thoughts as well, except when the topic turns to Prop 13
Cheers,
GS
You forgot re-arranging the deck chairs!
and the band played on!
Keep in mind the Titanic did eventually allow us to watch Leonardo diCaprio drown.
It was good for something.
Hilarious.
I’m out of here — you are one of the few I enjoyed reading. The majority here are gloating and foolishly pumping their arms and proclaiming WE ARE NUMBER ONE… no real difference from those FBers and Flippers. This isn’t a game with only one side victorious…. sadly a Pyrrhic victory is considered only as ancient history.
T- Gloating? Is this gloating?… W e, who post here, have no call to gloat, the TOP of this crazy thing may not even be in! We are just peering over the precipice and can see only a CASSIM of bankruptcies and jumpers (reported here as “Flip Floppers/ now poppers”..
WE don’t deserve to gloat, as we have been entirely informed of failure in our finacial accumen, not worthy of taking risk when affordibility exceeded 70 year lows, and the housing industry built 2 million homes for 1.3 million annualhousehold creations .
Yes, we know we are the “deaf dumb and blind kid”…since we could”t see how we might be right and the wealthy flip “poppers’ were getting rich while we watched being spoken of as ‘deaf dumb and blind” to the New (great Atlantic Tea company extravaganza or the South Sea madness) opportunity economy where 75% of all Americans get rich and pay their over sized debts back with inflated paper..
Now as the bubble may be bursting we know the consequences will bring “rot” to ALL not just to the careless and brave flip poppers…but you know what ?
We sure play a mean Pin Ball!
I don’t read Robert’s comments as gloating…the Titanic analogy is sad but brilliantly made and well written. And people asking for more I read as just finding the beauty in the language and the imagery.
And o’ course, the gloating and head-shaking directed at those of us who stayed off the ship has been pretty intense at times
man, it’s not gonna be pretty for anyone that’s clear…
just read on yahoo frontpage about the first serious waves of *salaried* GM layoffs, starting with a couple of percent of its white-collar force, more to come undoubtedly.
rough rough seas…
I enjoy reading your crap! The Titanic is a great analogy which is why we still continue to be fascinated by what went wrong. Last week while on vacation in Colorado they were showing The Titanic 1997 movie on HBO. I viewed it as a Sign from The Bear. ; )
and remember, unless you have an equity lifeboat, you won’t last long in the(or under)water.
I know it’s in black and white, it’s English, and it doesn’t have a great love story with catchy tunes, but ‘A Night to Remember’ is a far better film.
yeah, but can i see Kate Winslet’s boobies?
If someone wants to be a really good investor, they need to study history also in addition to finance and valuations.
Would my psych and math degrees work?
I think that would be a good combination plus an ability to value investments, be patient and go against the crowd at market tops and bottoms. Know when to be agressive and when to sell. Also see what the smart money is doing. Best time to buy is after a bust, when the values are there and the sentiment is negative. Sell at tops to raise cash. This cash will be used to buy when the values return after a correction. It may take years though but the wait will be worth it. Most people aren’t that patient.
Most people aren’t that patient.
Warren Buffett (who was then relatively unknown :cool:) gave a superb analogy in a mid-70’s book I read. A game of baseball where you can’t be struck out, only caught or tagged. Most people don’t have the patience to wait for the perfect pitch.
And does the velocity theory of money partially explain how a velocity acceleration in real estate has caused an increase inevitably followed by an equal collapse to the mean? (ROS)
And Inman News has the results of a related study. “Single-family homes have the most appeal for aging baby boomers, according to a survey released today. Of those planning to move, 63 percent said they are looking to purchase a single-family home, while 18 percent would purchase a condo or townhouse.”
Righto — I guess that explains the Toll upgrade. Everyone wants to maintain a big McMansion with lots of unused rooms into their retirement years.
Its a good thing all these cities are being overbuilt with thousands and thousands of condos - how else would our country keep up the “unmet demand” that realtors and builders talked about so often last year? Looks like the national housing stock should be able to keep up with the “huge” demand quite easily now!
Yep…..Those flippers are going to need houses and condos to flip within 6 months of buying them .Lets keep building houses for them . The builders knew dam well they were selling a high percentage of units to investors . The problem with the builders is they thought the flippers would keep coming .
The problem with the builders is they thought the flippers would keep coming .
I think that many of the established builders *knew* that the rollercoaster ride would come to a stop eventually. They were just content to ride until it did. Both Toll Bros and DR Horton were around during the boom/busts of the 80s, 90s. They were just laughing all the way to the bank as the greater fools kept showing up with money. Now they have to regroup.
BayQT~
No. The problem with builders is they don’t give a damn. I was checking out KBH insider selling. Someone cleverly read between the lines and figured out that $152 million invested in a 2 million share buyback means they paid about $75/share. One of the insiders during that period sold at just under $75/share, netting around $2.5 million.
It is no different than writing a check out of the company coffers for $2.5 million.
They just need to keep the game going long enough to milk the cow dry.
Two sure ways to bring housing prices down…………
(1) Produce houses faster than sales
(2) Raise interest rates,
So let’s build more…….let’s crank up the rates.
Result……….houses for everyone……..plus some spares just in case.
I’d be laughing if the situation weren’t so damn serious.
“That’s why 80 percent of the time these units are dark.’”
Still ROTFM !
What percent of the people who buy these units are in the dark?
” San Diego Realtor Cindy Davis is now leasing out a client’s condo that has lingered on the market for 80 days. ‘I’ve told him now he’s not going to get his price. Keeping it on the market and hoping for a miracle is stupid,’ she said.”
Now just how does this work. How long is he going to keep his head above water leasing out the condo? I just can’t imagine a positive cash flow here. Even if he has a sizable downpayment, if other units go for discounted prices, he’s dead meat.
It all depends on when it was purchased.
2005? He’s screwed.
2001? Probably ok if he hasn’t sucked all the equity out.
There are few enough of the latter… and also because prices are set at the margin… that what we expect will still happen.
There are enough of them, however, that Realtors can get away with saying crap like this to keep the rest of the cattle in line for the blade.
You watch , that will be the next ploy by the real estate sales group . They know the inventory glut is killing them .
I believe the normal slaughterhouse process is to hit the cattle squarely in the forehead with a lethal hammer…
Not bopping the moo-cows on the head would be cruelty to animals.
Unfortunately, many have no such qualms about their fellow humans.
But won’t Pamela Anderson single-handedly be able to help SALES in Las Vegas???
Won’t other “investors” want to pal around with her on the strip??
The newspaper recently reported that she just purchased a condo in LV. Or maybe it was just a cheap ploy by a developer to prop up lagging sales??
I’m all questions today… sorry folks.
Your right …….”cheap ploy to prop up lagging sales”.
So … the condo developers have adopted the “Field of Dreams” business model - build it and they will come.
I just got back from Boulder CO. It was a nice departure from the fantasyland housing market in my Southern California area. Market is a LOT slower. Not a cheap place to live though. We estimated housing is about 20% less there than where we live in So Cal. Any Coloradans here on the housing bubble blog?
bearmaster, just peeked at the Beach Reporter r/e listings this past weekend…prices are absolutely insane! I have noticed that there are many more pages of listings than a couple of summers ago…
P.S. Our family friend that runs an escrow company in Torrance says it’s completely dead
For your South Bay area, is 47 days on market really abnormal or less-than-average over the last 10 years?
I used to think of Boulder CO as a fantasyland too…it’s really only 20% cheaper than SoCal?! What supports the economy there?
I visited once in like 92 or so, at the edge of what looked to me like a major heating-up of RE in the whole state. Seems to me the whole region started booming then but has slowed to just the ‘national averages’ since, which would put it at sorta just about middling-overvalued on the US scale. But Boulder’s high prices always made me wonder…it’s lovely but what supports it other than the Uni?
cheers…
Nobody ever made money betting against Las Vegas. Sorry, but you guy sare all on the wrong side of the table. The money is being made on the bull’s side, and always will be.
Well that’s a good enough argument for me!
Where do I send my down payment?
Ooohhhhhhh BeeeeHaaave!!!!!!! Raarrrrrrrrrr.
Never.
You know LVLandlord always comes in and makes “betting” analogies.
I honestly don’t think anyone here is betting.
They are:
1) Posting/reading articles from various sources.
2) Discussing the economic ramifications of the current situation.
Betting is something you do IN Vegas. Not ON Vegas.
He’s whistling past the graveyard and he knows it. He reminds me of my brainless friend in Florida. They tell themselves this stuff and it makes them feel better.
I think we’ll see LV Landlord in an upcoming episode of CSI - as the stiff!
It’s not a question of whether you can *make* money in an up market. It’s a question of whether you can *keep* the money when the market turns.
Yeah, where do I sign up…lol
Who in their right mind would want to LIVE on the strip? Wouldn’t it get old after….I donno…3 weeks?
Yep. Probably sooner than that. I have family who’ve lived in LV 10 years…they are in the Southwest in Spring Valley (AWAY from the Strip!). Trust me…you don’t want to be on or near the Strip on the weekends. Traffic. LOTS of people. Makes everyday living (grocery shopping, getting gas, picking up/dropping off kids, etc) VERY difficult. My folks don’t go on the Strip unless someone visiting wants to.
BayQT~
I use to live on the strip, next to Mandalay Bay, it gets very old…and boring.
30 years ago I use to see these vacant hotels and condo projects half finished in Vegas . In fact , now that I think about it I owned a three unit building in Vegas once . ( bought a fixer , fixed it up , made good money on rents for a number of years ,got tired and sold at a good profit about 15 years ago ).
You and HedgeFundAnalyst are lucky to always be on the right side of the table.
Its my good karma …..I never screw anyone ….and I dont get greedy .
Wrong “you”
LV Landlord is the betting man…
I just printed your comments and I will add them to all the other foolish things people have said. Then in a year or so I will post them. Unfortuantely, you will probably not be posting here as you will probably be looking for a large building to jump off of.
I remember the old days- when we’re not suppose to feed the trolls!
but there’s so few trolls left…
Ok so LV Landlord is a troll. Whats a troll.
“Nobody ever made money betting against Las Vegas.”
Um, I don’t think anyone here is betting AGAINST Vegas. Everyone knows that the house always wins. It’s the people who BOUGHT the house that are crapping out.
I’m betting against Vegas . They over built .
To Robert Cote.
Re:Truly sad is that the best analogy that comes to mind is the Titanic. Reckless piloting in an effort to set new records, ignoring the danger signs, untested waters and responses, inadequate safeguards, hubris about one’s invincibility, profits and egos overruling common sense, need I go on?
I was thinking the same thing yesterday. That ship has sailed and can’t be saved; it’s just a matter of sitting on the side and watching the daily headlines. All to soon we’ll be treated to survivor headlines.
BTW. Didn’t both Trump and his prior wife Ivona have condo property under construction in Vegas?
Trump’s is still in action, Ivana’s got cancelled - as far as I know.
bearmaster,
I am from Colorado. Live in Longmont, about 10 miles from Boulder.
Housing is indeed slow here. Not much appreciation over last 3 or 4 years (after Telecom was busted) .
I see homes taking 6 months+ to sell.
Also looks like inventory is increasing even further to make things worse.
Still, Boulder has kind of unique situation as no new construction is allowed within city limits. You can demolish existing structure and replace it, but nothing new is allowed. So supply is fixed.
Around Boulder, in surrounding cities, prices are not as high as Boulder.
Also plenty of new construction from builders (still building like crazy)
There was an article in July of last year in NY Times about Denver housing market’s “slowness”.
I Would love to hear from fellow Colorado resident about what
they think.
(My observations/experience with Colorado RE market are fairly
limited as I moved here about 3 years ago)
well, look at Santa Fe, (record inventory, nothing selling), Sedona, (ditto) and other unique towns with limited land supply, surrounded by forest or state lands, and stricter than usual building codes/laws.
Unfortunately, living in a gorgeous town with a cool downtown mall close to great skiing doesn’t make it immune to the market conditions that are occuring with alarming velocity everywhere.
What do you hear about Santa Fe, Catherine? One of my favorite places on earth. I had a “dialogue” with a woman who had a gorgeous house in Tesuque that she thought she wanted to rent out. I was ready to take it and she backed out at the last minute to try and sell it. Her asking price was ludicrous and I know she has not sold it.
good thing everyone wants a bigger house just in time for Peak Oil!
Empty big houses will help lay the Peak Oil theory to rest for another 30 years…
I’m sure peak oil will be here soon. But we aren’t even close to peak oil sands or peak uranium, much less peak hydrogen.
the Alberta tar sands only produce 1 million barrels per day, which they hope to increase to 3 mill per day in 15 years.
too bad the US consumes 20 mill per day.
Alberta is not in the US. Who’s to say that the oil from Alberta won’t go to China instead of the US?
Oh yah, hydrogen is an energy sink; takes more energy to create than it produces.
Better buy uranium stocks.
Ah I don’t really know if the solution is there or not. We could all be fine or we could be running around hoping for Mel Gibson to save us from Tina Tuner. There just seems to be a lot of energy available in the form of nuclear (if we can stop wetting our panties about it) and solar, etc…
I try to look ahead but it is difficult to look that far ahead.
Yes, we would need to spend a lot on infrastructure to get to a hydrogen. I wonder if the $270B we just spent in the middle east would have helped there… naahh…
It doesn’t mean I don’t own commodity related equities…
Can anyone provide a realistic figure per barrel of crude at which solar becomes viable in the majority of the US?
Hey, and there’s no such thing as “peak plutonium”!
I thought the fact that it takes a lot of energy to make hydrogen was precisely why BushCo was pushing for it.
someone is going to buy them. even if they aren’t occupied, I am sure(or hope) the heat will be on somewhat. most people aren’t going to abandon their big house. they’ll just cut expenses and bear it.
Do banks leave the heat on?
I would think so if they don’t want the pipes to freeze.
They’ll certainly “Turn out the Lights”
I just flew into Las Vegas yesterday….What was nice (for me) about the approach was that they vectored the pilot in almost a full 360 around the metro prior to final….
While making the full circle I looked for the clear indicators of the housing glut that can be best appreciated from the air….”Unfinished Tracts” Their were more than I could count…Their were some sites that clearly had beed graded and were prpering for installation of infrastructure for THOUSANDS of houses….
I think the Las Vegas market may be in even bigger trouble than we suggest….And, like the very intellegent Mr. Cote said; This is going to hurt so many people that I get no enjoyment out of watching it happen….
I must agree. It’s already damaged innumerable people on the way up and it will only be worse on the way down.
For every clown that gets nailed there will be two that deserve it who don’t and five more who don’t deserve it that do.
Do you still think the big builders will be ok?
Yes…
Soon you will come to the dark side. LOL.
They are just to sophisticated….They have hundreds people as bright as Cole…They are ahead of the curve and have forward strategic plans that allow them to methodically unwind their deals…It will be the small to mid size builders that get toasted…Along with a lot of speculators and ordinary folk…
The builders are ahead of the curve alright — already cashed in their chips last year, and are now using share buyback policies to implement the final round of pump and dump which will leave their stock holders with the empty bag in hand…
I wonder if this “Wind of Change”…
will F@*#ck up The Donald’s hairdo??
Yes Las Vegas surely grew up in 2004-5.
Heck It had 2 Hi rise condo in a 1 million population both had been here since the 1980’s… Then it had 45,000 units on the Zoning boards…Besides The Donald’s ( who for 20 years was going to buy a casino, this rumor occured everytime one of the near bankrupt casinos needed a buyer…for the record he never did and never has…but he does have a condo deal! MJ’s and Ivans his X are among several deals that BLEW UP…
SCDave///In the midst of the great pricing plateu. one could open the Sunday RJ (local paper) to the Real Estate section and find a map to 30-45 new subdivisions…..If you look today KB Homes has a separate page all to themselves with 35 or so developments.. My have we grown!
If you manage to scope in on an advertisement you see adds for free pool, grantite counter tops, closings fee and up to $10,000 borrower interest rate buy downs..but hurry offer ends this weekend!
Inspired; Watch for the “Buy Downs” on the interest rates…That will be a clear signal that the market has turned another leg down….All the other stuff (Free plasma etc.) is just fluff….
Old folks that are rich want to get the high status luxuries to enjoy for the remainder of their life. Old men sometimes seek trophy wifes, cars and HOUSING.
Read about Real estate’s still adding jobs.
Real estate’s still adding jobs
O.C.’s real estate trades — from brokers to lenders to janitors to building-supply salespeople to folks on the farm — added 11,000 jobs in the year ended in February, state employment trackers say. Last month’s real-estate job growth equals …
4.7% annual growth rate vs. 1.3% for all other employers in The O.C.
2nd slowest real-estate growth rate since March ‘03.
41% of all jobs created in The O.C. in the past year.
12th month of the last 14 when other employers have outhired real estate..
” San Diego Realtor Cindy Davis is now leasing out a client’s condo that has lingered on the market for 80 days. ‘I’ve told him now he’s not going to get his price. Keeping it on the market and hoping for a miracle is stupid,’ she said.”
I used to sell real estate about 15 years ago in South Florida. This reminds me of most sellers back then. It was a very slow market but they all wanted to list for more than thier house was worth. They were all convinced that they would get thier price, it was uncany, so many had the same saying, it was pretty much like this “there has got to be 1 buyer that is looking fo my exact house just the way I have it done and will pay for it”. Of course they almost never (if ever) got thier price. My girl friend at the time who was also a realtor used to say, “typical seller, they all think thier house is one of a kind”.
This is OT but does anyone know if the California Association of Realtors still puts out their “Homebuyer Income Gap Index”, the one that shows the median family has an income of fifty something thousand dollars and needs one hundred and thirty something thousand to afford the median priced home? I believe it was a quarterly release and I cannot recall seeing one for many months.
Dwr,
I haven’t seen it lately either. Things that make ya go hmmmm.
“And more condos are being added this year, analysts say, putting more pressure on prices. In San Diego, 5,217 condo units were built since 2001, and another 7,235 are under construction or approved. Meanwhile, sales and prices in San Diego have peaked, agents say, and prices are beginning to head south.”
I say: “San Diego condos for everyone!”
and plasam TVs and used BMWs!
Nah, stick with your Toyotas & Hondas.
Read about Mortgage defaults to rise as housing market slows.
Declining sales, slower appreciation and higher interest rates will increase mortgage defaults later this year and into 2007, according to a distressed property investment advisory firm in Sacramento.
For example, home prices in Las Vegas and Phoenix markets, two of the nation’s best-performing regions in recent years, are dropping, McGee said. And home prices in San Diego and the San Francisco Bay area are declining.
Great link Melody. To be quoted as an expert saying “…the excess inventory just ins’t there.” and not mention the 7-fold rise in said inventory year-over-year is just outrageous.
Beyond mind-boggling.
This is the only thing that made sense in the whole article. It’s a no-brainer, everybody wants to live in Minneapolis!
[Not sure I'd ever have considered this before... ]
I say: “Minneapolis condos for everyone!”
Well the developers and the city councils here in the Twin Cities keep telling us ignorant citizens that our population is projected to more than double by 2030 and we need to build tons of housing NOW to handle the teeming masses arriving Any Day Now . I live in a suburb of St. Paul where we’ve been fighting our insane city council that’s trying to push through yet _another_ mega-condo/townhome development that would add another 800-1000 condos and townhomes. We’ve already had two similarly-sized developments built here and yet another is scheduled to break ground in the next year or so. All this in a town population 36,000. They’re telling us people will be dying to pay $385,000 for a cramped condo in a neighborhood where the average 1/3 acre lot SFH is valued at $240,000!
That’s what happens when your mayor is in real estate and you’ve got city councilmembers whose family business is construction.
I sent Ben a couple of articles the other day about insane condo projects scheduled for downtown St. Paul. One of them will be built on land so heavily polluted, its former owner (Exxon Mobil) has been fighting to stop the city from building homes on it, saying they’re afraid of lawsuits down the road. The developer on that project defaulted on his latest payment, so the city council obligingly took over $6 million in city money to make the payment and keep that project on track. Because we _need_ thousands more of these riverfront luxury condos, y’know. St. Paul, Minneapolis, Stillwater - luxury riverfront condos for everyone! And heck - anything leftover that doesn’t sell to the millionaires can be used for future Section 8 housing!
Dude, they’re just forward thinking~! With the new forecasts for global warming and sea level rise, the twin cities will be a veritable boom town. All those washed out Floridians gotta go somewhere. Swimming in Jan!
they keep saying in ann arbor Mi that the pop is gonna go thru the roof too. the ann arbor news is just now starting to consider maybe taking their collective heads out of their collective rear-ends to see what’s happening in that little city down the road called…oh what’s the name again…DETROIT…
They think here that with all the smart-person jobs they’re immune to hurt from the factories closing and the engineers getting laid off but I honestly can’t understand how so. Debates rage about allowable heights on downtown condo projects, and some of the prospective buyers at least as quoted in the AAnews are wealthy folks from Troy (! a tony sub of Detroit, couple miles away!) who might buy one as an “investment” or as a place to stay on weekends for shopping and eating downtown Ann Arbor. Maybe there is a market for this, maybe Ann Arbor is indeed immune and there are enough wealthy people to snap up the mere hundreds of condos (we’re a town of 150K including 30K college students) that are getting built, but it seems bizarre to me…
cheers!
that’s sounding really scary in St. Paul! Is it sorta in the public debate about the mayor being a real estate person and the city council in construction?!
Long time lurker (since November), first time poster. I’m glad there are other Twin Citians here. I’m an ex Californian. (SF and SD) Moved here when I realized I’d make $100,000/yr MORE in Mpls than in San Diego, PLUS housing was affordable. The myth of incomes being higher on the coasts is pure BS… (kinda like the myth that housing only goes up) Mpls/StPaul has some of the highest incomes in the nation, for almost all jobs. Plus you can get a pretty darn nice place for under $400k. But the numbers of condos they’re building is astounding. I go back to SD and SF all the time (usually once a month) and the levels of condos are similar… but Mpls/StPaul has land to build in ALL directions. Who is paying $500k to $1M for a condo???? Evidently someone is. Terrifying. Don’t get me wrong, a few of them are pretty cool… but I believe there are over 10 condo towers of over 40 stories planned right now. No way, Jose.
Not only that, so many of these condos are “lofts”. I’m sorry… I’m willing to suspend reality and believe that people want to live in a 2or 3 BR condo to avoid maintenance, etc… but a big 1 room loft? How do you escape your yammering spouse or your loud kids or your dog? Eek!
Usually Minnesotans are pretty level headed. But not with this condo thing. And make no mistake, the condos will crash, pulling down the SFHs with them.
The Northwest Airlines issues isn’t gonna help either. I guess unemployed NWA flight attendants and laid-off Ford Ranger makers need luxury downtown lofts?
ah, yes…that was rather shocking wasn’t it?!
those boomers set to retire in downtown Minneapolis. Happy that the city sacrificed an interesting streetscape for what’s really needed there; a series of tunnels and covered walkways to connect you from newstand to pharmacy when the air temperatures fall to 20 below zero regularly during the 7-month long wintertime, and from the mosquitoes the size of helicopters during the rest of the year.
retirement paradise!
Let’s stop mincing words. The truth is that our economy has been propped up the last 5 years by financial and housing activity. That’s all ending now. Our economy will soon drop like a turd in an outhouse(kerplopppp). I mean, game over man! The fun is just beginning. Many lazy and greedy pigs will get slaughtered. I personally will enjoy the process. Tired of all the hucksters and their rationalizing BS.
Dead Spin; Problem with that analogy is that “The Pigs” are going to take a lot of honest hard working people with them…
You know, the Los Angeles condo projects don’t get much fanfare…but I saw on the KTLA morning news the other day that in 1998 there were only like 10k units downtown and now there are like 40k…
This guy at work went to look at some this past weekend (sounded like hell because of the demonstations) and 800 sq. ft. started at 450k with $350/month HOA dues. And there were long waiting lists…can you believe it?
The waiting lists were to use the restroom. LOL. 500,000 people gotta pee somewhere.
There is a reason even those of us in San Diego refer to it as La-La-land.
Ask him if that included parking. No joke: many of the converted buildings (under the city’s “Adaptive Reuse” ordinance) don’t include parking. In Los Angeles. Crazy.
Yea, $3,350.00 plus for note and H.O.A. fees and park your car on the streets so the transients can break into your car for shelter on a nightly basis. You might as well just leave the keys in the door. Insane you gotta love L.A.
you can sip martinis on your balcony any watch homeless guys pee on your car.
That’s interesting. So, those converted buildings don’t have underground parking? He did mention that the HOA dues included parking…but he didn’t mention what kind…
P.S. I spoke to my buddy who invested in this Miami condo called One-Miami or Miami-One and I guess him and his partners just unloaded it…he claimed each of them “doubled” their deposits…which isn’t bad (if he’s telling me the truth) considering I expected them to lose their shorts!
I know some people that deposited $1000 on Florida condos,maybe your buddy made $1000 before you take out all the realtor fees, condo fees, mortgage payments etc.
I’ve worked in L.A. since I fled the tech bubble — I guess that’s six years. Just like in the Bay Area, people in L.A. go on and on about the “sunshine tax” every time anyone questions how living in abject poverty on a six digit salary is justifiable.
in dc they keep breaking ground on new projects. its a mystery to me. true, demand for inner city living is on the rise, but with so many projects being built and inventory on the rise its odd.
http://www.dcbubble.blogspot.com
There are about a million places I would rather live than downtown LA, and I am not kidding. I go there once in a while for business and I cant wait to leave, who wants to live there?, yuch.
Actually, 18 percent is a high number given that the supply did not exist a few years ago. That’s a lot of people moving from houses to condos.
The problem is that the condos have been over-priced. Way over-priced. If you downsize, you should SAVE money. Condos should sell for LESS per unit than rental apartments, because the money comes in up front. Neither of these are true right now, and factor in that house prices are inflated, then condo prices are inflated twice over.
My guess is the builders have been minting money. I can’t imagine how high those profits must be.
Your right . One should pay less for a condo .