‘Inconsistency Of Pricing Power’ In Las Vegas
The housing bust is over in Las Vegas, local realtors report. “Any ground lost in January and February was quickly recovered in March, the Greater Las Vegas Association of Realtors reported. The median price for 2,521 homes sold during the month was $314,950, up 1.9 percent from February and up 6.8 percent from the same month a year ago.”
“Prices had dropped for two straight months from $312,000 in December to $309,000 in February, leading some to believe the ‘bubble’ was starting to pop in Las Vegas.”
“‘Overall, we continue to see a solid housing market in Las Vegas,’ housing analyst Stephen East said, ‘but we have a higher level of caution now versus five months ago, given elevated incentives and cancellations, combined with further signs of inconsistency in pricing power.’”
“‘We have basically the correction of January and February, which are typically slower months and certainly the market has cooled off, but that’s the long and short of it; we’re just coming into our spring season,’ said Linda Rheinberger of the GLVAR.”
“The surge in sales is tempered by a more than 19 percent drop in sales from last March. The number of homes available for sale on the MLS grew 21.8 percent from a year ago to 17,385. Total dollar volume for March home sales was $957.8 million, down 13.5 percent from a year ago.”
“For many families in the Valley, home prices are out of reach. The affordable housing crisis will be addressed at a conference Thursday in Henderson. ‘It’s really bad; apartment vacancy rate is 3-4 percent, the median home has gone up to $300,000, it’s out of reach for everybody, so we’ve really got to buckle down and decide what we’re gonna do in the community,’ said Ken Lange, Nevada State Education Assistant.”
“Michael Colagioia, who wants to move to Southern Nevada from Florida, said he put his house up for sale, but the market is slow there and not many people have looked at the house.”
One homebuilder plans to help out. “Pulte Homes will break ground today on Anthem Mesquite, a 2,014-acre master plan about 80 miles north of Las Vegas in the city of Mesquite. Upon its completion, Anthem Mesquite will have 4,600 homes, including 3,400 homes in Sun City Mesquite. Several companies either planning or building communities in Mesquite. City officials estimate that as many as 14,000 new homes will come online in the next 10 years.”
‘it’s out of reach for everybody’
At the end of the day, affordability will do in overvalued houses. I would post the details from the March numbers, but the LV realtors don’t make them available.
“For many families in the Valley, home prices are out of reach. The affordable housing crisis will be addressed at a conference Thursday in Henderson.”
HA! You’re right, Ben. Lack of affordability and the resultant market forces will accomplish what a hundred “affordable housing” conferences could not. The best cure for high prices is high prices.
The median price for 2,521 homes sold during the month was $314,950, up 1.9 percent from February and up 6.8 percent from the same month a year ago.”
Only a 6.8% YOY appreciation? That’s pretty low compared to recent years.
Why at 6.8% you’ll ALMOST have broken even after taxes and broker fees.
What an investment!
I’ve been tracking Las Vegas, San Diego, and Phoenix areas daily on ziprealty.
on 4-3-06:
LV 18,348
SD 18,252
Ph 40,012
today:
LV 18,774
SD 18,405
Ph 40,925
that’s 4 days, but the same steady increase, 50-100 units/day, for the last 2 months I’ve been watching. Not a single down day. Sometimes the numbers dip intraday but they always bounce back higher later in the day.
Interesting how LV bulls (lv landlord for one) always conveniently ignore addressing that growing mountain of for-sale inventory when they tell us that the LV correction ended after a surprisingly-short spell of declining prices. Sorry folks, a steady increase in inventory is not consistent with a market which has reached a permanently high plateau.
Also, it is absolutely NO secret volume increases between Jan/Feb and March. I have stated here repeatedly that sales will pick up going into spring MOM. YOY numbers are what really matter when you’re talking about non-seasonally-adjusted sales figures. And a 19% YOY drop in volume is pretty darn significant.
The short spell of declining prices?!?! BAHAHAHAHAA!! These people haven’t even begun to understand the words “declining prices.” So now the Realtor’s (TM) are focusing on MOM because its convienient and they can call an end to the soft-landing. Yet will revert back to YOY when that makes the numbers “look right.” What a bunch of twisted crooks!!
Heh heh…like the stories about how the gold rally has already started to look a little long in the tooth. They think we don’t know the difference between “consolidation” and “exhaustion”.
Several companies either planning or building communities in Mesquite. City officials estimate that as many as 14,000 new homes will come online in the next 10 years.
Are there jobs in Mesquite? In what industry? If not, what are people supposed to pay their mortgages with? Is there any logic to this assertion at all?
Sidney; Have a friend that lived there….Typical master planned community out in the middle of B.F.E….They have plentiful water so they are building like mad…Retirees and service jobs…New Hospital and new airport soon with Jet service…Several Casino’s and a little over an hour to LV…
Originally a little Mormon farming town, on I-15 right on the AZ border. (I-15 actually crosses a corner of AZ on the way to St. George, UT, about 40 miles up the way.) The water came from the Virgin R., which is a tributary of the Colorado–it flows into the north end of Lake Mead. (It’s also the one in Zion Nat’l Park, btw.) Mesquite started to get some casinos back in the late 70s or so–the usual “Nevada Bordertown” effect, basically put them up as close to the state line as possible, and by then there were enough gamblers in southern Utah to make it worthwhile.
That this remote little burg is touted as the next Center of Vegas Development is a bit mind-boggling.
The gamblers will go the way of the home equity ATM…
Does anyone think it might be a good time to short the casino biz?
Yep , time to short the casino biz.
Are there jobs in Mesquite? In what industry? YES!!! Polishing Slot Machines…….
OK Mequite…is small desert community between St Geoge and Las Vegas near the Utah Nevada border…The LDS gamble too, despite their goodie tooshoe MO..(#@$%@@) Secondly, “jobs” Seniors do not take jobs. They play golf, slots, go out to dinner and spend all that monhtly Soc.Sec money, keeping their little communities thriving…Yep jobs will be needed to serve their scripts., & high other medical expenses, dinners, clean etc..
How would you title a story about a 19% drop in sales volume and a 22% increase in inventory??
Well, if you are the Las Vegas Review Journal, the title shall be:
Median prices edge up in valley Realtors survey
The RJ didn’t publish the drop in sales volume, the TV station did.
you’re right Ben, I just assumed in an article about rising prices and rising inventory, the direction of the sales volume would naturally be included.
They also lied about the number of listings. They have March listings at 17,385 and Feb at 17,675, or a 290 decline. On ocrenter’s Tracking Las Vegas post you can see how off this is. But the decline is the most deceiving part. Inventory has been accelerating upward since January.
I’d title the story “Last call for greater fools” and not take a look at history…
doh.
“Attention: Greatest Fools wanted. Apply to local Real Estate market.”
Gotta love the LVRJ and their denial of reality. In case the LVRJ is reading, here’s a quick lesson:
Median is the “middle value” of any series of numbers. In an overpriced housing market, the properties that are the most scarce are the ones at the lower end of the series, below the median. So no sales taking place in the region “below the median” will necessarily move the median to a higher point. Idiots.
Do you have any distribution data that supports this contention that “the properties that are the most scarce are the ones at the lower end of the series?” I am not seeing a whole lot of $20,000,000+ homes moving lately.
What a pathetic “straw man” attempt — no one said anything about $20,000,000 homes except you. Go sort through what’s for sale on realtor.com, and one simple search will demonstrate that the lion’s share of what’s for sale is above $250,000, mostly in the $300,000 to $450,000 range. None of which can be afforded with the typical LV household income.
It couldn’t possibly be more obvious how out of whack housing prices are when affordability is at record lows, incomes are stagnant, and housing has tripled in LV in less than five years. If you’re so sure that the market can support the mother of all manic bull runs, then quit wasting your time on this bulletin board and start snapping up some of that snowballing inventory so you can show us all what a saavy specuvestor you are.
Damn… that was good.
an EDUcommie chines in-
we’ve really got to buckle down and decide what we’re gonna do in the community,’ said Ken Lange, Nevada State Education Assistant.”
what do you mean we ?
Ken Lange, Nevada State Education Assistant
Worthless state employee parasite….
I’ve been tracking Sacramento from daily emails from ziprealty.
There’s been 60+ added a day for the last month. When I check the total on the ziprealty wesite, it isn’t updated. The number barely increases each week.
WFTF….I would be interested in seeing updates once in a while on the SAC region….
You can find updates daily here on Sacramento inventory:
http://sacramentohousingbubble.blogspot.com/
The inventory reporting situation from those with vested interests to hide the crash brings to mind the SARS epidemic. Like the Chinese govt, anyone who drags their feet on reporting a burgeoning number runs into unpleasant “notch” effects down the road — sudden substantial upward revisions when the truth becomes too obvious to suppress any longer…
Imagine being the high-mark for you neighborhood for a decade to come. No matter how bad the real estate crash gets, the neighbors can reassure themselves they are slightly better off by saying, “…at least we didn’t buy in 2006 when the DumbAsses did”
And thanks to zillow.com everyone will know who the local DumbAss is.
The guy in the house directly behind me closed in Dec ‘06 at $620. Zillow now shows it at $583K.
It was originally listed at $750K and at $650K when he bought it after it had popped out of escrow twice already.
Chuckle.
Of course, if you want to advertise what a DumbAss you are you can offer your place at $1.2M like the people down the street. Best keep in on the market for a year while the market is tanking to really prove your point.
If a paper keeps reporting “good” local housing news, more readyer will buy the paper, thus more ad dollars. They have every incentive to adopt a positive bias than being objective.
This practice will cost them credibility with better informed readers, but this group of people are in the minority.
Pulte builds over 55 housing and he must believe the baby boomers will be his market .
As far as retirees, planned communities that are outside major cities are very successful. They don’t offer anything for employment and the commute would be brutal but what do they care?
They live in a perfect planned community and are an hour & a half from a major air port, the vegas strip but they live far enough so they don’t have to deal with it every day.
The Villages here in Florida is the same way, a waiting list for retirees to buy a home there, just a massive city of small homes, golf courses, retail centers, bars & restaraunts, they employ the locals to work there and the retires enjoy living in a planned community with no crime or traffic (they all pretty much drive golf carts everywhere) and are far enough from Orlando they don’t have to worry about the big city problems but close enough they can still take a drive and fly out of OIA & take advantage of the malls & attractions.
The only problem is will the baby boomers still be able to afford these places if their current homes don’t sell & will they be willing to tolerate baking in the sun in a Nevada summer. Its got to be about 120 degrees in July there, I felt like i was in a microwave last time I was out there.
good points
Sorry, but it’ll be 140 degrees for the boomers….
120+20degrees more for global warming by 2100, which is about when they’ll finish paying off their underwater loan.
Hey, maybe it’ll REALLY be underwater!
They’re not making any more:
(a) Sand dunes.
(b) Desert.
(c) Wasteland located miles from the nearest water supply.
(d) $500,000 condos in a town of busboys, hotel maids, and taxi drivers.
Ha- What about all that land the government used to test atomic bombs?
Lots of that around St. George, UT, another bubbly zone…
http://www.filmakers.com/indivs/Dragon.htm
You wouldn’t want to live there.
Actually, the wife and I went on a tour of the NTS the day after we got married in Vegas. You’ve probably seen those films from the 50s of the tests were they blow up some houses with mannekins in them? The houses (the ones not so close in) are still there. In fact, everything left over from a test is left in place.
St. George, UT and some of the nearby places got a lot of fallout during the above-ground-testing days.
You forgot to mention they wouldn’t let us off the coach anywhere on the test site except for that one spot at the lip of the Sedan Crater. It’s probably safe to guess that even if testing were permanently halted that land wouldn’t be safe for human habitability for many years. Not that Nevada has a shortage of open land outside of the NTS and Area 51…
Sounds like a great place to retire. With all the radiation treatments, who needs healthcare. You might get cancer, but then again, the radiation kills it.
Also, this sounds like a great place to blow your life savings and raise a family. After all, they aren’t making any more “nucular” test sites, unless, of course, you live in North Korea.
lol . I wonder if they have to disclose that nucular testing was done at x miles from the housing projects . That could be a lawsuit if it isn’t disclosed in the title report or otherwise in some report .
Don’t leave out Iran…
Dont I remember a Superman movie where Gene Hackman, the likable villain Luthor) planned to set off a nuc on the San Andreas fault, and his worthless desert property would be ocean front? This movie was before the housing crazyness in Las Vegas-and points east.
OT: 160,000 Homes Planned for Utah MegaSuburb http://pittsburghlive.com/x/search/s_441066.html
good article, so its kinda like Simcity. They plan out a massive city on the computer and people magically show up.
I am not familiar with Utah but I hear great things about Salt Lake City, very clean, low crime, freindly, and good out door activities. From what I hear CNN and others consider it one of the top 10 cities to live in.
This kind of place would again appeal to your retiring babyboomers. This generation is looking for an active lifestyle and again they don’t care about employment or job markets because they are done working.
The burning question is will they be able to sell their current homes for enough money to buy out there.
Also, take a look at the “months supply at current sales pace” measurement. The R.E. bulls used to talk about it when inventories were surging, but sales were to; they said that proved there was no bubble. Well, that measure based on the LV stats has gone from 4.6 months a year ago to 6.9 months now. That means this measure of supply/demand balance is 50% worse than a year ago.
Surprise, surprise — the LV Realtors aren’t hyping that interesting development. Hmmm.
There is a saying about statistics: Statitistics are like a bikini. Whats important is what is covered up…
The good parts are covered up…
These people crack me up. Probably the same monkeys who proclaimed the Nasdaq crash over at 3000.
I think it’s official. For 3 years, people have been talking about how the housing bubble in Las Vegas was going to pop. And they were right. It popped. In January and February, we had our pop. And now it’s behind us. Nothing much to talk about now, except to speculate what the next new high is going to be.
LVlandlord,
just wondering if the steadily increasing inventory has you concerned? Especially as the listing season begins in earnest in May.
LOL. Thanks for your input.
Keep on whistling past the graveyard.
He’s just a troll. Ignore him.
I think LV Landlord is playing you.
I don’t think she is that dumb if it is the same LV landlord from months and months ago.
I thought you said the pop was in 2004? Don’t worry, there will lots more opportunities to call the ‘bottom’ in the next few years.
LVLandlord, I’d like to speculate which Taco Bell you’ll be working at a year from now.
“…and now the return to normalcy has come true”.
These hapless agents will say nearly anything in hopes of not having to don a blue vest when greeting you and me at Walmart.
We sold a LV condo in October and were lucky to get out near the peak. Zillow has the condo losing 4.5% of its value since then (from similar units in the tract). Las Vegas is not immune to the same factors causing the bubble to burst everywhere else. Rampant speculation and excessive use of exotic mortgages will eventually end in tears for many. The bubble in LV has gone on for so long and made so many people money that few believe it will end. Think Nasdaq 2000.
“will eventually end in tears for many”
tears as in never being able to buy a house again in their life, due to ruined finances, credit, crushing debt, BK. Millions of homeowners converted into apartment renters on the wrong side of town, barely scraping by for years on end, house rent will be out of reach.
What BK, there are new rules now.
What BK, there are new rules now.
“…will eventually end in tears for many.”
Those will be the lucky ones.
Las Vegas isn’t even close to being dunnzo. Many of the hot markets are still edging up with an ever increasing pile of inventory. Believe it or not, there still are jack asses buying into this craziness… and these median prices are a joke. Ever realtor I’ve run into lately is sweating bullets.
Dominion Homes closes 315 homes in Q1 vs 478 yr ago - MarketWatch.com
http://biz.yahoo.com/ap/060407/dominion_homes_sales.html?.v=1
is even better. Average home price is down 1% but overall numbers are down 24% YOY. So why isn’t the stock price down 24%?
Realtors need to stop using median value as a sales pitch.
Median value is the middle number in a sorted list.
Below is an example of how you can have an increase in median value in a collapsing market.
200 200 300 300 800 900 900 (median = 300)
150 200 200 325 500 600 600 (median = 325)
100 180 350 350 400 (median = 350)
The sad truth is that most home owners look at median home value as a reflection of their paper wealth, and so is the media, and they religiously believe that home value will always go up, because median value has gone up.
The realtors cheerleading with this kind of tone regarding median value are either liars or they are truly obtuse.
Exactly….. but your example becomes less valid in a larger sampling but if it is clear that the distribution is skewed then it’s very valid. Also there is a notion that the sucker buyer of today will buy as much as he can so he will buy a nicer property at a discount. A flight to quality effect when it’s a buyer’s market.
That’s why I am apples-to-apples in the DC area like developments with identical housing units. As mentioned in another thread I have found identical units with asking price -27% from the summer 2005 peak. And there is of course an idiot investor who is trying to bail and nominally break even by trying to sell at last summer’s peak…….. The guy who has the -27% listing bought in 1999 but is still looking to make 200+% profit in 7 years. How someone can buy into a crazy peak at 325% price appreciation in 6 years is beyond me……
We have to admit due to the enormous attendance at the Real Estate Expos around the country, there is still lots of flipper interest, despite the constant harping by realtors® that the “investors” are out of the market. I keep getting reports from relatives in Texas that homes are still being snapped up by Californians despite incentives at all the major builders.
it’s spring and hope springs eternal.
Calling the ‘bottom’ is hazardous to your credibility, if you are wrong. Fortunately for these realtors, they have no credibility to begin with.
Comment by Portland, Mainer
2006-04-07 12:53:34
“…and now the return to normalcy has come true”.
These hapless agents will say nearly anything in hopes of not having to don a blue vest when greeting you and me at Walmart.
Yeah, anything but having to do actual WORK!
Gawd, I hope this ends soon in Vegas. I’m sick of realtors everywhere, I hope they leave town when all this comes down, and don’t stick around to take Walmart greeter jobs. At least I know the current Walmart greeters won’t try to mug me for my wallet or financial future. At least I know my husband’s field might be safe from a mass deluge of unemployed realtors…most of the would never dirty their hands repairing a toilet, plumbing, installing cabinetry, or helping old ladies move their furniture.