Las Vegas Realtors ‘Throw In The Kitchen Sink’
In Business Las Vegas reports on the housing bubble. “With the number of single-family houses listed for sale reaching an all-time high, the way real estate agents conduct their business will have to change, those in the industry said. In April 2006, the number of single-family houses listed for sale in the MLS reached 18,467. That compares to early 2004 when there were 4,000 or fewer houses on the market at any given time.”
“Of the 18,467 listings in April, about 17,000 were active listings, meaning the balance were contingent or pending sales, said Linda Rheinberger, president of the Greater Las Vegas Association of Realtors. ‘We do have to sell differently; not so much at a discounted price, but giving similar incentives as homebuilders are giving, or contributing to closing costs,’ she said.”
“Real estate agents also need to be cognizant of the new-home inventory, which real estate expert Larry Murphy puts at about 4,000 houses and condos and another estimated 6,000 converted condos. ‘Whenever a market changes you have to educate sellers to the realities of the marketplace,’ he said. ‘Their mindset is still last year.’”
“The reason for the large amount of resale inventory is in part because of investors unloading properties they bought in 2004 and 2005, said Dennis Smith, president of Home Builders Research Inc. ‘We’re still in that overhang, or hangover, period of the investors,’ he said.”
“The area’s transient population along with people hoping to cash in equity to move up or move out also are factors, Smith said. Another reason for the increase in inventory is an increase in foreclosures and defaults, a category that was almost nonexistent two years ago, (broker) Mike West said.”
“The change in the market’s inventory levels and the volume of sales may be a shock to some agents who only have experienced the Las Vegas housing market at its peak, Smith said. ‘There’s going to be years where income levels are extremely high and then there’s going to be extremely low years,’ he said.”
Thanks to the reader who sent in this link.
Let’s hear LV Landlord spin this one. If it’s good enough, I think Shrub is going to need a replacement for Rove pretty soon
my idea of the american dream was not a stucco box on a 3500ft LOT??? when i first came to the west, i could not believe the houseing brochures when it said “large 7000ft lots” Where I came from “large 7000ft, meant the house itself” To me a large lot is 2, 3, or 5 acres. WTF is going on… you look at the crap in Buckeye AZ, or Gilbert, and it looks like communist living in Uzbekistan !!!!
Agreed. What a crock of horsehooey that Baby Boomers don’t want land to take care of and want to live in cubicle hell in some inner city.
This Boomer wants ACREAGE. Does not want to be able to see the neighbors. Even with a pair of binoculars!
Vegas is bleeding, but is not dead yet. Clark County Assessor reports for April shows strong employment and strong new residents growth. I consider employment as the #1 key indicator if and when the bottom wil drop out in real estate.
New Residents (Drivers License Count) April-06= 6,784… March-06= 7,305… April-05=6,600… UP+ 2.8% from 2005
Total Employment April-06=914,100… March-06=905,200… April-05=866,600… UP+ 5.5%
Unemployment Rate April-06= 4.0%… March-06=3.7%… April-05=4.1%… Chamge from 2005 -2.4%
Those driver’s license statistics don’t show how many people left. And of the 5.5% growth in employment, how much of that is in construction, lending, and real estate?
People might gamble more when they can no longer find thrill in the RE markets. Some might even wish to win a big one to be able to afford the payment adjustments from their ARMs.
No whammies, no whammies, no whammies, no whammies….got to pay the mortgage. The house always wins!!!!!
“I consider employment as the #1 key indicator if and when the bottom wil drop out in real estate.”
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Sorry, this is wishful thinking. For sale inventory is the #1 key indicator. Econ 101. Or maybe there’s over 20,000 people willing to take out suicide loans to bail out all the speculators currently dumping because carrying costs have them hemorraging cash?
“Vegas is bleeding, but is not dead yet.”
It’s the “yet” part that will getcha.
A lot of jobs will be gone here soon. The bubble created many new jobs related to real estate and they will go away as speculation leaves real estate. Not sure where all the lenders and real estate agents will end up.
The largest, most expensive retail building project worth 7 Billion dollars just broke ground on the Strip and is scheduled to be complete in 2010. Backed by MGM, the contractors were concerned they couldn’t find enough construction workers and wages would have to go up. Trump towers #2 is also in construction with completion in 2010. With the Tropicana and other new hotels coming on line, I believe a floor is being laid to a total wipe out of house prices.
Were casinos creating jobs? Alot of that is CA HELOC money on vacation. As that dries up or reduces, then LV should retreat as far as casino incomes.
I was thinking about the entertainment/gambling side too. Seems like Vegas might have got lots of business lately because of all the high-rollin’ cash rich home debtors. All kinds of “vacation” destinations might find their business fall way off in the years to come.
Vegas Flippers will be saying this soon:
http://koti.mbnet.fi/badbee/wavs/intheend.wav
I think that Las Vegas may be one of the later areas to fall. You will have to see declines in California and elsewhere, and money dry up, before you start seeing contraction in Vegas.
The town is still packed to the gills with visitors and tourists. Here in Vegas, the economy is absolutely booming and I see little to indicate a slowdown is imminent.
simmssays…
http://www.AmericanInventorSpot.com
Hard to say. Vacations get cut back pretty quickly when money dries up.
What happened to Vegas in the early 1990s as CA went into a slump?
I think the opposite. The massive condo cancellations mean massive unemployment in a very few months. Rational or not $3.00 gas will slow the donation of CA money to the tables. You’ve heard all this before.
The new thing this time is “mobility.” TPeople in this downturn will be more mobile than ever before. The idea of simply packing up and following the jobs or whatever is perfectly normal for the younger set. The bubble had equity nomads, the pop will have métier meanderers.
“métier meanderers”
Lovely turn of phrase.
But I would think all the latest home buyers will be unlikely to be meandering away from their upside down situations.
I think job mobility will be a large part of this busts formula. But will it increase the busts severity or decrease it?
I think Vegas, Miami, Calif are leading the correction down in both sequence and degree just as they lead they boom. They are like the Internet Stocks of 1995-2003 which led the rise and fall of the market. They are the leading indicators for the rest of the market. First to rise, first to fall. The higher they rise, the lower they fall.
Don’t forget Phoenix.
Phoenix will return to the ashes.
Taxing developers green for cheap homes looks red to mayor
By Brittany Wallman
South Florida Sun-Sentinel
May 20, 2006
FORT LAUDERDALE · Mega-developers and the city’s mayor are shooting down a proposed affordable housing law, calling it unfair, communistic and doomed to failure. People could afford a place to live, the mayor said, if they were willing to work harder.
Mayor Jim Naugle, a conservative and brash politician serving his final term, said people mistakenly think they’re entitled to an affordable single-family house on a 40-hour work routine. They need to work more hours, and even then settle for a condo or townhouse, Naugle said.
“I’m supposed to subsidize some schlock sitting on the sofa and drinking a beer, who won’t work more than 40 hours a week?” he asked. “I deny that there is a problem. You can buy condos all day for $160,000.”
Naugle’s comments may be contested by the working-class citizens who’ve told the city they want a home but can’t afford it. But his ideas might hit home in other circles, where a city proposal to make developers slash prices or pay a fee was met with skepticism.
“We ought to let the free market work,” said Bill Scherer, a lawyer-developer on the city’s Downtown Development Authority.
The proposal asks developers to give up big money — $1.5 million on a 100-condo complex, for example — for the theoretical good of the community. The city’s law, as drafted, would make residential developers pay for affordable housing, either by providing it within their housing complexes, or paying fees into a trust fund to subsidize housing for the middle class. Families making up to $69,720 — which is 20 percent more than the area’s median family income — would be eligible for a government boost.
New York has rent control. The federal government has Section 8 housing aid. So, this isn’t the first time government has gotten involved in the real estate market to help people afford a place to live.
South Florida’s cities only recently decided housing prices had reached crisis level highs, and Fort Lauderdale is one of the first to seriously attempt passing a law to do something about it. The city is under pressure from Broward County to pass a law; otherwise, the county says it won’t allow another wave of construction of thousands of condos downtown.
“The concept of this ordinance is from each according to his ability, to each according to need, which is the Communist Manifesto,” said Naugle, who calls the proposed law a “luxury housing tax.”
“One person is working two or three jobs to get ahead and one person isn’t. Should we tax the person that’s working hard to get ahead, to pay for the one who isn’t?” he said.
Jim Carras, head of the private, nonprofit Broward Housing Partnership, countered the mayor’s Karl Marx rhetoric with a paraphrase from President Truman.
“`A decent place to live is the right of every American.’ We have maybe stepped away from how we fund it,but even the most conservative Republicans in Congress and the state legislature see a role for government,” said Carras.
Housing prices in Broward continue to shock some buyers. The median home price in Broward County in March — the price at which half the homes sell for more and half the homes sell for less — was $368,100 for a house and $202,600 for a condo.
Still, according to a recent study by Strategic Planning Group Inc., that means most condos are within financial reach of most buyers, though it might not be the size or location a buyer is seeking.
A debate about Fort Lauderdale’s proposed law might have been expected, considering what’s at stake.
“Gas is unaffordable. Now, do gas station owners need to go out and supply affordable gas?” said Doug Eagon, president of Stiles Corp., which built many of downtown’s big towers.
Developers said they would pass the costs to other buyers, leading to increased housing prices overall.
Major developers on the Downtown Development Authority originally supported the concept of an affordable housing regulation. But they don’t like the results. They want it rewritten to offer incentives to developers, and to spread the cost across the general public, by using tax dollars, for example.
The building industry is officially opposed. Brandon Biederman, director of government affairs for the Builders Association of South Florida, told the city that construction costs are going up, making the additional fees an even worse proposition.
A recent version of the law was soundly rejected by city commissioners last month and sent back for more public discussion and revamping.
City planning director Marc LaFerrier said he’s working on a new proposal, and it will likely be back in public debate June 6, at the City Commission’s conference meeting in the afternoon.
I think the cure for more affordable housing is currently underway on it’s own.
‘We do have to sell differently; not so much at a discounted price,”
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LOL. The BUYERS will set the price, NOT the sellers, with inventory up over 400% in a year.
‘We’re still in that overhang, or hangover, period of the investors,’ he said.”
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Warren Buffett: “The hangover is always equal to the binge.”
These realtors are so use to a high demand market they don’t even know how to act in a low demand market . Realtors ….Realtors …. the speculators have dropped out of the market ,alot of your sellers are those speculators .Forget the theory of the brief pause and than a come back in real estate in 2007 . Stop the spin ……,the baby boomers are not even buying anymore .
God forbid these yentas actually have to “sell”. Order taking and paperwork is all they know how to do.
My husband & I are aging babyboomers who have decided NOT to trade up for at least 5 years, maybe more. We have a 7/30 ARM with a fixed rate of 6.125 % for the first 7 years, and it has 6 years left to go in the fixed period. We decided that, with our daughter moving out, the house we’re in will be roomy enough for us, and if the mortgage payoff program I have mapped out works, we will have this place paid off in 5 years or less. That will make our 2nd paid-off property. I don’t know where the buyers for these $775,000 properties are going to come from, but most babyboomers I know are scaling back, not looking to take on more debt. We’s all older and scarder than we used to be, lol. My husband & I already have some substantial savings, but we will be looking to put more into the boring old bank, and some into hard assets. Maybe, in five years, we will look for more rentals. No more until then.
All the baby boomers I know have about the same saving ideas your expressing . BB’s are afraid of high risk investments anymore and they are backing off from real estate as a short term investment . BB’s got to get serious about retirement .
Yes, you’re right, Housing Wizard. My husband & I have been saving ( separately, before we were married to each other ) for 15 or more years each, and it’s starting to accumulate nicely, but many, many people in our age bracket ( early 50’s ) don’t either have a clue, or don’t have much saved, or don’t know how to reduce their credit card debt. A surprising number of people that I work with on my new job like to gamble. They don’t call Las Vegas ” Lost Wages ” for nothing, and some people think nothing of going to the Indian-owned casinos in our state at least once a month. Hard to save for retirement if you’re supporting those. We have gone to the casino 2x in 8 years, and played the nickle slots both times.
WSJ had a hilarious article today about how the Vegas vacation condos will battle the slowdown by offering higher end restaurants and clubs inside their properties. The best part is one of them, Vegas 888 has said even if you buy in their building you’re not guaranteed to get into the club because they want to keep the clientele ‘exclusive’. Ha ha, pay millions for a condo and they won’t even let you in your own club if you don’t measure up! Wanna bet that development doesn’t get built?
if Vegas is still creating jobs, why the record inventory?
if boombers will move in droves to Florida, why the record inventory?
Don’t know about Vegas, but in Florida property taxes, hurricanes and related insurance, and inability to sell “there” in order to get “here” have killed the boomer market, IMO.
i’m looking forward to seeing these vegas condo’s as dime slot machine prizes.
Let’s pause for a brief moment and consider all this happy money being spent in Vegas by tourists. I’d wager (ha!) that a lot of that “cash” is directly tied to equity loans (”honey, we only live once!”) and I’d double wager those $350 rooms at the Bellagio are going on credit card accounts that revolve quicker than a roulette wheel.
Personally, the people I know that go to Vegas and “spend” a lot are using play money they got from their friendly lender.
So once that party comes to an stop, I believe we’ll see Steve Wynn go into spasms when all those “rich” boomers decide vacations will be spent in the backyard of their rental, watching the sprinklers gush to the boom box blaring “New York, New York”.
LOL your funny
The above post - picturing that is just too funny Catherine, you have wonderful posts. Keep up the great work.
‘Of the 18,467 listings in April, about 17,000 were active listings, meaning the balance were contingent or pending sales, said Linda Rheinberger’
BTW, this is a terrible ratio. Most realtors will tell you that 25% is terrible. 50% pending is considered normal, I believe.