Las Vegas Homes ‘Going For Less’
A television station in Las Vegas has this news. “Fewer homes are moving off the market here in Las Vegas and those that are selling are going for less. According to the Greater Las Vegas Association of Realtors, an average single family home went for $310,000 in January, a slight decline from December.”
“For condos and townhouses, the average selling price was around $196,000. That too was down about four percent from December.”
“From December to January, about 25 percent fewer homes and condos sold. However, the number of homes listed for sale increased significantly during that time.”
“Realtors say despite this trend of Vegas becoming a buyer’s market, the Valley remains strong and stable with housing prices still appreciating at a healthy annual rate.”
The business press has this. “Signature Homes, in a unique twist, is developing a new residential subdivision for rent near downtown, marking a major departure from the long-established industry practice of building to sell.”
“Homebuilders typically want to sell units as soon as possible in order to recoup expenses and realize profits, but Signature Homes is building the 92-unit subdivision as an experiment in rental housing.”
“The development, when it went for city approval, was going to be a single-family detached-home subdivision for sale. ‘We worked on that project before it was developed,’ said Las Vegas City Councilman Lawrence Weekly, who represents Ward 5. ‘For the developer to come in and lower the boom on us like that, it just really, really disappointed me.’”
And a reader sent in this Las Vegas data.
well Lawrence what did you expect… Speculators seem to have lost interest and who are they going to half million dollar homes to? all those hotel and tourism employees working for tips?
Las Vegas
Your graphs rule!
Thanks — I’m glad you’re enjoying them.
this repeats the adage that realtors are not good sources of information. statistics say the prices are going down, realtors say they are going up
This means Lost Wages Real-whore (love that word) personal incomes are off 30% or more just as the Christmas bills come due.
Ben:
I sent you an article from Dallas Morning News saying sales are down again for the second month YOY in Dallas area, but median is up - according to realtors, folks are coming in from out of town, after cashing out, and buying the million dollar homes here. As an aside, jobless claims rose by 4,000 last week. Job growth is just great here in Big “D.”
Jobless claims is for U.S., not for Dallas - thought that no. was a bit high.
One of the best types of posts is the historical articles from previous RE busts.
It would be great to have a thread dedicated to RE articles from busts.
I think Marinite did some of those.
http://tinyurl.com/dl2u5
Just shows that rents do delcine durint the bust
1208.March Bay Area home sales surged 47.5% over February at the start of the
home-buying season, but sales still fell 11.9% from a year earlier. The
Bay Area median price of $227K was down 2.2% from a year ago, but up 4%
from February. The Santa Clara County median was down 2.8% from a year
ago, and sales were off 17.9%. California sales declined 9.3% year-over-
year, while the median price was down 4.1%. [San Francisco Chronicle]
Again, they were quoting the bust of 1908/1920! we are quoting 1990!
1209.The current California housing slump is quite similar to market
fluctuations over the past 100 years. At the turn of the century, home
prices experienced double-digit inflation. But beginning in 1908, home
prices softened and real estate went into a 9-year slide. The market
boomed between 1918 and 1924 but collapsed 60% in the Great Depression,
and did not fully recover until the 1940s, when home prices once again saw
double-digit rises. [San Jose Mercury News]
1206.San Francisco rents fell 7.8% from January 1991 to January 1992. The baby
boomer population is contracting, there are few new businesses, and the
quality of urban life has gone to hell. Median rents were flat in the
heart of Silicon Valley, where most of the job losses occurred. In the
rest of the county, rents increased 4.7% as would-be home buyers worried
about job security. [San Francisco Examiner]
Search google groups “california real estate bust 1990″
They are going for less, but that does not mean the prices are falling. After all, everyone wants to live in the middle of the Nevada desert, or at least to own and maintain a vacation home there.
A subdivision for rent? Unbelievable. That’s it, I’m finally convinced that the gig is up. No chance of the dead-cat bounce, spring pick up, etc. It’s straight down from here.
“Realtors say despite this trend of Vegas becoming a buyer’s market, the Valley remains strong and stable with housing prices still appreciating at a healthy annual rate.”
___________________
Of all the things that I hope happens in the aftermath of the bubble, people never believing a word that comes out of a realtors mouth ever again is fairly high on my list. I think the stench from this will be hard for them to wash off.
“housing prices still appreciating at an annual rate”
This is deeply deceptive language, and factually inaccurate. Housing prices are NOT “still appreciating,” even if the YOY appreciation is still positive, IF they have fallen from the previous month.
It would be accurate to say “Housing prices have appreciated over the previous year’s value. They are now depreciating from their highs.”
You are right on about relators…they rank right up there with used car salesmen. I wouldn’t believe a WORD that comes out of their mouths. But, then they don’t have to give any legal disclosure like trading securities (”Past performance is no indication of performance in the future…investment can cause losses and is not guaranteed by the Federal Govt…etc”). A wise purchaser/seller needs to study their own fundamentals. I love the T.V. commercial (some cell phone company) with the female realtor…First caller she tells: “It’s a Buyer’s Market!”, next caller: “It’s a Seller’s Market, baby!”. Making fun of the two-faced realtor has become mainstream humor. But don’t you love those glamor photos of themselves (the agents) they prominently display all over the real estate adds. What does that have to do with buying a house?
OT, but the HB plunge protection machine is starting to show signs of wear-and-tear…
At least Fannie still gets good plunge protection.
http://tinyurl.com/c47e9
Fannie has honed in like a laser beam to its plunge protection peg of $55.
getstucco,
You seem to refer to the Plunge protection team all the the time. What is your basis on this theory (reality)?
It is a metaphor for bizarre and highly correlated price movements across a broad swath of companies in the housing sector. I have no explanation, other than such highly correlated movements are not likely due to the independent actions of many buyers and sellers in a competitive market, but more likely due to the influence of one or a small number of individuals engaged in highly coherent actions.
That is what I think; do you have any theories, or are you a Creation Scientist?
Why is it healthy to have house prices continually appreciate, especially when it increase more than wages increase? Would it be “healthy” to have gas prices appreciate? How about health care costs? Food costs? Clothing? College tuition? Taxes?
What would be good is for house prices to continually depreciate. That would make them cheaper over time, allowing society to spend and invest the money in more productive endeavors.
Homes do continually depreciate — once built, the forces of nature continually act to tear a home back to the ground it came from. The big runup in prices simply reflects a scheme by the govt to forestall economic disaster, and has nothing to do with economic fundamentals, which say that homes are depreciating assets.
RK: Don’t you just love the idiots coming here and buying the overpriced shitboxes from the natives? Two years from now, those will be 30-40% less, minimum and the new Dallasites will be bouncing off the walls in their rubber rooms.
Exactly - the prices here may be reasonable when compared to SoCal or Naples, but just because the people on the coasts are out of their minds, doesn’t mean that Big D is a good investment. There was another article in the DMN this morning about building 70 more townhomes around the Farmers Market, a block from where I live. The developers bought the land from the developer that built 12 townhomes across the street from me. They were built in 2001 and sat on the market 2 years before getting sold. Now, each of the new owners has had to move out while they tear out all of the walls and floors and shore up everything because these new shitboxes were sinking. The city and developers keep throwing money to try and revitalize downtown, but the bottom line is there is a small number of people in Dallas that want to live downtown. These projects are being built while no demand exists for them. I heard from a realtor that one developer bailed out of a project downtown when he found out the soil beneath his new project contained all sorts of contaminants that made building here cost prohibitive.
I wouldn’t say that the housing bubble is simply the result of a government scheme. The bubble couldn’t have happened unless the sheeple were suckered into it. Houses are just the latest reincarnation of the tulip bulb. Houses have become “investments” just like tulip bulbs were “investments.”
Also, to be blunt, some (not all, but enough) boomers burned in the NASDAQ meltdown saw RE as their last chance to get the retirement they ‘deserved’ without having to actually save for it.
Same old RE rah, rah BS– They state ‘prices are appreciating,’ yet in the same article they state that ‘prices are declining.’
The new paradigm at work.
All this ‘noise’ coming from real estate agents is just that ‘NOISE’. If you want to have a little fun, go over to CraigsList for Las Vegas and use “reduced” as a search function for real estate. You will see there are plenty of very, very nervous individuals there sitting with empty houses - this is my kind of fun!
foobeca says:
Why is it healthy to have house prices continually appreciate, especially when it increase more than wages increase? Would it be “healthy” to have gas prices appreciate? How about health care costs? Food costs? Clothing? College tuition? Taxes?
What would be good is for house prices to continually depreciate. That would make them cheaper over time, allowing society to spend and invest the money in more productive endeavors.
Over the long run, the price of housing just about keeps up with inflation. If you adjust for bigger home size, the real price is falling. In other words, it is generally the case that it’s become easier to afford a house over time. However, during this bubble, the price run up has seen a tremendous amount of wealth transfer from future home owners to existing home owners. This is not healthy (or sustainable), and sure enough, the prices seem to be plummeting back down.
My advice to homeowners is to sell as quickly as possible. My advice to new home buyers is to wait a few years.
If you -owned- an oil well you’d think rising gas prices were a good thing. It isn’t so much prices as total cost of ownership. TCO is what is totally out of whack. One reason LV homes look like a good deal is subsidized water and electricity. Remove those and you’d add $200-$300 per month to the TCO. Even with the subsidies the costs of HVAC and H2O are flying out the door every month, ouch.
http://accessclarkcounty.com/finance/TaxBreakdown.htm#top
Shows the 2.1% property tax rate on current assesed value (lagging). Next year there’s going to be a revolt when people are paying more than an equivalent 3% on properties that have lost 30% of their value.
Buying that vacation home or retirement villa is akin to picking up one of those huge RV’s - you use it alot at first, can’t find the time in the middle, and never put it on the road at the end. Payments, taxes, up-keep - in the end people realize it’s just cheaper to rent one for that once-a-year trip. In the same vien, I hear a lot of talk now from fellow boomers about just staying put. Fixing up (expanding) the now paid off house, saving huge on an overpriced morgage on a house they don’t really need, maintaining that low 20-year old Prop.13 tax rate (CA), and spending the savings on travel and a more comfortable retirement. Living miles out in the country is fine, but for most people it gets old real quick.
Anyone who uses the term “still appreciating” to refer to a declining market’s still being valued higher than it was last year, is lying. The statement is simply not accurate.
If housing prices are higher than they were a year ago, but are lower than a month ago, they are not “still appreciating,” on an annual basis or otherwise. They have appreciated, and they are now depreciating.
Comment by Robert Cote
2006-02-09 06:22:35
This means Lost Wages Real-whore (love that word) personal incomes are off 30% or more just as the Christmas bills come due.
It just means they’ll have to go back to their old jobs, stripping and escortin’. Not sure what the male real estate agents are going to do, as there is not a high demand for male strippers and escorts in this town.
If you -owned- an oil well you’d think rising gas prices were a good thing. It isn’t so much prices as total cost of ownership. TCO is what is totally out of whack. One reason LV homes look like a good deal is subsidized water and electricity. Remove those and you’d add $200-$300 per month to the TCO. Even with the subsidies the costs of HVAC and H2O are flying out the door every month, ouch.
I’ve never believed the real estate hype out here anyways, about how “there is a housing shortage in Vegas and there is no land left to build on.” Bullsh1t. I’m not blind and I’m not that stupid, I can look out my window and see hundreds of miles of empty desert. And for there being a “housing shortage” I sure do see alot of empty homes for sale in every Vegas neighborhood i’ve been to.
Oh yes, the energy bills here in Las Vegas! If I remember correctly, there has been some noise down here about the electric and gas companies wanting to raise their prices about 25% by the end of the year. Lets face it…weather in this area for a good portion of the year is either very hot or very cold. At the minimum, you need to run the air conditioner over the hot months or your stucco McCrapbox will become a 120+ degree oven. Worse if your home or apartment is not one of the newer “energy efficient” ones. I don’t see how someone of retirement age would be able to deal with that kind of heat without it seriously affecting their health. So this town is seriously going to be less attractive to retirees in the future, just from cost of living expenses going up.
That’s great news for for you LasVegans, at that rate of decline homes will be half todays price in a little over a year. 4%/mo drop would look good in my area.