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Old 10-26-2007, 09:15 PM
 
Location: Las Vegas, NV
403 posts, read 1,168,793 times
Reputation: 216

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OleCapt -

I had used the same number set as the demographer used in the R-J article, but your point is well-taken.

Using Clark County's demographics according to zip code to include unincorporated areas within the geographic region that correlates with LV, NLV and Henderson on the MLS map, the numbers tabulate as follows:

Henderson 2006: 236,671 + 3.7% = 8757
Las Vegas 2006: 1,311,566 + 1.9% = 24,920
N. Las Vegas 2006: 201,268 + 4.2% = 8453
3-City Unincorporated 2006: 105,648 + 2.4% = 2536
Population Change, July ’06 – July ’07 = +44,666

Clark County Average Household Size: 2.65
Quantitative Change in Households: +16,855 (44,666 / 2.65)

Clark County Owner-Occupied Housing Rate: 59.1%
Quantitative Change in Households Seeking to Purchase: +9961 (16,855 X 59.1%)

Total Vacant Resale Housing Units Available: 13,067

Using the CC Demographics by zip code and including the unincorporated areas leaves us with a 15.7 month supply of available vacant homes.

Personally, to factor in current spec homes and anticipated new construction, I would increase that supply figure by 50% and still feel I’m being optimistic.

I think I’m also being optimistic in that I am completely ignoring the 14,000 owner-occupied homes on the market right now.
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Old 10-26-2007, 10:17 PM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 38,127,294 times
Reputation: 2661
Quote:
Originally Posted by Eric Young View Post
OleCapt -

I had used the same number set as the demographer used in the R-J article, but your point is well-taken.

Using Clark County's demographics according to zip code to include unincorporated areas within the geographic region that correlates with LV, NLV and Henderson on the MLS map, the numbers tabulate as follows:

Henderson 2006: 236,671 + 3.7% = 8757
Las Vegas 2006: 1,311,566 + 1.9% = 24,920
N. Las Vegas 2006: 201,268 + 4.2% = 8453
3-City Unincorporated 2006: 105,648 + 2.4% = 2536
Population Change, July ’06 – July ’07 = +44,666

Clark County Average Household Size: 2.65
Quantitative Change in Households: +16,855 (44,666 / 2.65)

Clark County Owner-Occupied Housing Rate: 59.1%
Quantitative Change in Households Seeking to Purchase: +9961 (16,855 X 59.1%)

Total Vacant Resale Housing Units Available: 13,067

Using the CC Demographics by zip code and including the unincorporated areas leaves us with a 15.7 month supply of available vacant homes.

Personally, to factor in current spec homes and anticipated new construction, I would increase that supply figure by 50% and still feel I’m being optimistic.

I think I’m also being optimistic in that I am completely ignoring the 14,000 owner-occupied homes on the market right now.
You are machining butter. I would think you are trying to prove a point.

There is no indication that unincorporated Clark County increased 1.9%. It didn't. The City of Las Vegas increased 1.9%. You have no specific for the unincorporated...Only 2.7% for the County as a whole. Just use it. This stuff is barndoor analysis.

Why drag in not owner occupied? There will be any number of purchases by absentee owners. If you want to do that you then have to vastly expand the analysis to include all the other garbage. You don't want to go there unless someone is paying you to do it. In fact it is likely that the newbys mostly rent and chase out oldies from the rentals who buy. And then we have the 1031s who are parking money until the figure out what to do or how to time it. Too complex for this sort of analysis.

I use 2.53 for the heads per dwelling from the last census. I would suspect it has gone down not up. But who knows.

You are working hard to get it past a year and it does not go. I would also point out it makes no difference. Some would argue the natural level of inventory should be about 12,000 units or so. If true we are both badly overstating the problem.

The crucial bit is enough sales to start the inventory dropping. Maybe in the spring...or the summer or the spring of 2009. That is the fun speculation.
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Old 10-27-2007, 01:43 AM
 
Location: Las Vegas, NV
403 posts, read 1,168,793 times
Reputation: 216
I went with 2.4% growth for the unincorporated areas because it was the average weighted growth for the incorporated areas of the three cities. The unincorporated areas I’ve included are all within the boundaries of or adjacent to LV, NLV and Henderson – it seemed a reasonable approach. You can disagree with my methodology, but any alternative will result in a negligible difference (i.e., your 2.7% adds 317 residents).

I use 2.65 population per household size because it is Clark County’s number for household size in owner-occupied dwellings and likely more accurate than the national census number you’ve cited. Again, both the factor and the differential are negligible. I simply prefer to use the most appropriate sources I can find.

To your point that there will be purchases by absentee owners: obviously that will be true. But a 46% vacancy rate among existing homes for sale (an increase of 23% since October 2005 and versus a national average below 3%) clearly points to a net egress of investors from our market place. If those statistics don’t sway you, pull up the closed sales from any day in the past two months and look at the address of the new owner…it’s running 80% owner-occ. If I’m missing something, let me know, but I don’t see how the evidence that investors are a net egress can be refuted.

As far as the 1031’s “parking money”…are you seriously positing that this group represents a statistically significant group of potential buyers? In the current market this is an utterly negligible amount, OleCapt, and you seem to be making a possibly disingenuous objection to my analysis. If you have any evidence that 1031 money – which must be re-invested within six months – is substantial and accumulating, please provide it.

I respectfully disagree with your assertion that “the natural level of inventory should be about 12,000 units.” The number of units is, in my opinion, irrelevant. Equilibrium has been historically measured by month’s supply – not by units. The historic level has been 5 – 8 months. In our region, the supply has expanded from a low of less than one month in April ’04 to 21.5 months today.

My statistics aren’t perfect – no set of stats are. But that doesn’t mean they should be ignored or that the perfect should be the enemy of the good. Your description of my analysis as “machining butter” and “barndoor analysis” is simply a euphemistic back of your hand slap.

To your final comment that “this is fun speculation” – I can only respond that the people I deal with don’t view their largest investment as simply “fun speculation.”

Last edited by Eric Young; 10-27-2007 at 01:57 AM..
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Old 10-27-2007, 11:03 AM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 38,127,294 times
Reputation: 2661
Quote:
Originally Posted by Eric Young View Post
I went with 2.4% growth for the unincorporated areas because it was the average weighted growth for the incorporated areas of the three cities. The unincorporated areas I’ve included are all within the boundaries of or adjacent to LV, NLV and Henderson – it seemed a reasonable approach. You can disagree with my methodology, but any alternative will result in a negligible difference (i.e., your 2.7% adds 317 residents).

I use 2.65 population per household size because it is Clark County’s number for household size in owner-occupied dwellings and likely more accurate than the national census number you’ve cited. Again, both the factor and the differential are negligible. I simply prefer to use the most appropriate sources I can find.

To your point that there will be purchases by absentee owners: obviously that will be true. But a 46% vacancy rate among existing homes for sale (an increase of 23% since October 2005 and versus a national average below 3%) clearly points to a net egress of investors from our market place. If those statistics don’t sway you, pull up the closed sales from any day in the past two months and look at the address of the new owner…it’s running 80% owner-occ. If I’m missing something, let me know, but I don’t see how the evidence that investors are a net egress can be refuted.

As far as the 1031’s “parking money”…are you seriously positing that this group represents a statistically significant group of potential buyers? In the current market this is an utterly negligible amount, OleCapt, and you seem to be making a possibly disingenuous objection to my analysis. If you have any evidence that 1031 money – which must be re-invested within six months – is substantial and accumulating, please provide it.

I respectfully disagree with your assertion that “the natural level of inventory should be about 12,000 units.” The number of units is, in my opinion, irrelevant. Equilibrium has been historically measured by month’s supply – not by units. The historic level has been 5 – 8 months. In our region, the supply has expanded from a low of less than one month in April ’04 to 21.5 months today.

My statistics aren’t perfect – no set of stats are. But that doesn’t mean they should be ignored or that the perfect should be the enemy of the good. Your description of my analysis as “machining butter” and “barndoor analysis” is simply a euphemistic back of your hand slap.

To your final comment that “this is fun speculation” – I can only respond that the people I deal with don’t view their largest investment as simply “fun speculation.”
Machining butter implies that you are carry calculations good to nearest 10 thousand to the unit. You are confusing precision and accuracy. Your numbers are quite precise but no where near that accurate. "barndoor" was applied to all such analysis whether done by you, me or the gurus of the RE world...who have been hopelessly wrong throughout the last years.

You still do not apparently understand the unincorporated county. It is not part of Las Vegas or of Henderson or of NLV. It is a freestanding entity for which you have no good number. It is likely a high growth area. You do however have a simple number for all of Clark County which would more than server for your analysis. The old KISS rule. 2.7% of 2 million is probably as good as it gets.

That is the forcing function that will inevitably end the down market. The question is not if...it is when.

So we got about 1700 or 1800 demand for dwellings for the new arrivals. That is the forcing function. And it is likely to increase substantial at least by 2009 as the new strip properties come on line.

There is more than ample inventory to satisfy that demand for the forseeable future. I think we agree on that.

The real question is when does it turn around. I believe that requires a drop in inventory and a stabilization of pricing. When does that occur? We could be there now...pricing has not moved since Oct 1. and inventory is stable. I don't think we are there. That is more likely the yearly cycle. But at this point it appears October will be better than September...which is counter cyclic. Nothing to write home over but better than nothing.

If not now perhaps spring or summer or the following spring. What is it you disagree with? To the individual home owner this stuff is all karma...luck, good or bad, driven by forces well beyond their control. And the speculation is fun in the sense of a funny fall...it is funny as long as you are not the fallee.
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Old 10-27-2007, 01:25 PM
 
1,009 posts, read 4,031,945 times
Reputation: 760
Recent articles . .
Nevada foreclosures: Worst yet to come (http://www.inbusinesslasvegas.com/2007/10/26/featire1.html - broken link)
Home sales, prices nosedive (http://www.inbusinesslasvegas.com/2007/10/26/feature2.html - broken link)
HOUSING: More home sellers go short

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Old 10-27-2007, 05:42 PM
 
Location: Las Vegas, Nevada
12,686 posts, read 36,289,134 times
Reputation: 5516
I find it both funny and disturbing that the Las Vegas haters make it sound like Las Vegas caused the current real estate slump all by itself. I just read that there are over 2 million vacant homes in this country. Not homes for sale...vacant. seems to me that the problem is countrywide (as opposed to Countrywide?).
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Old 10-27-2007, 09:00 PM
 
1,966 posts, read 4,334,364 times
Reputation: 1090
Quote:
Originally Posted by Buzz123 View Post
I find it both funny and disturbing that the Las Vegas haters make it sound like Las Vegas caused the current real estate slump all by itself. I just read that there are over 2 million vacant homes in this country. Not homes for sale...vacant. seems to me that the problem is countrywide (as opposed to Countrywide?).
You're absolutely correct Buzz. Prior to coming out here, there was an article in the Washington Post for the county I lived in which last year was the fastest growing county in the the country, Loudoun County. Anyway, the point of that article was that because of the credit crunch, many homeowners had abandoned their homes so grass started to grow over 4 feet in many areas, and neighboring homeowners upset because they couldn't do anything about it until the house was foreclosed upon and sold.

It is not a Vegas issue, it is a nationwide issue.
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Old 10-30-2007, 10:56 AM
 
Location: Beautiful Upstate NY!
13,814 posts, read 28,446,962 times
Reputation: 7615
The quicker (and steeper) the house prices rose...the harder they will fall. All those cities mentioned above had quick, steep rises in house prices, no?
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Old 10-30-2007, 12:03 PM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 38,127,294 times
Reputation: 2661
Quote:
Originally Posted by jfkIII View Post
The quicker (and steeper) the house prices rose...the harder they will fall. All those cities mentioned above had quick, steep rises in house prices, no?
Generally untrue. Houses rise much quicker than they fall and they generally fall slowly over a significant time frame. They almost never fall to where they started. Most such falls are triggered by outside events...recessions, loss of aerospace jobs, factory closings.

Vegas prices went up about 50% one day in March of 2004. Best explanation I have heard was a shift from an abundant land situation to a limited land situation. Speculation played a role and certainly greed.

The probability that Las Vegas will ever get to the prices prior to March of 2004 is zilch.
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Old 10-30-2007, 12:38 PM
 
Location: Las Vegas, NV
403 posts, read 1,168,793 times
Reputation: 216
Quote:
Originally Posted by olecapt View Post
Generally untrue. Houses rise much quicker than they fall and they generally fall slowly over a significant time frame. They almost never fall to where they started. Most such falls are triggered by outside events...recessions, loss of aerospace jobs, factory closings.

Vegas prices went up about 50% one day in March of 2004. Best explanation I have heard was a shift from an abundant land situation to a limited land situation. Speculation played a role and certainly greed.

The probability that Las Vegas will ever get to the prices prior to March of 2004 is zilch.
Hmmm...here are some examples of where the market is relative to Q2 2004:

2420 Sturrock, Henderson:
Purchased new from Del Webb on 03/01/2004
Purchase Price of $341,895
Currently listed at $269,900

3816 Ricebird, NLV:
Purchased new from DR Horton on 02/27/2004
Purchase Price of $296,255
Currently listed at $275,000

Plenty more where those came from. You don't have to look hard.
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