[banger]

this market is even more simple than economics....

Think Predators and Prey.

[olecapt]

Nah guys.

Free market scenarios require rational buyers and rational sellers. That segment that deals with REOs...which is 80% of the market....lacks rational sellers. And in that quite clearly delineable sector we have seen supply drop by a factor of five while prices continue to drop.

In fact we have the unfolding situation shown on my blog where the supply of REOs is in fact beginning to limit sales while prices still continue to drop.

Unless something gives we will be unable to maintain the volume of REO sales as there will simply not be enough to meet the demand. And prices continue down. And to maintain buyer favored economics in the face of less than a month of inventory is not within any normal market dynamics.

The non-distressed portion of the market continues to behave as a rational buyers market...and some segments (Sun City Summmerlin for instance) begin to show increasing sales and stable pricing.

[tony soprano]

Originally Posted by olecapt

In fact we have the unfolding situation shown on my blog where the .

Unless something gives we will be unable to maintain the volume of REO sales as there will simply not be enough to meet the demand. And prices continue down. And to maintain buyer favored economics in the face of less than a month of inventory is not within any normal market dynamics.

Yes, the laws of supply and demand hold true for every market with the exception of Las Vegas real estate. Either that, or someone doesn't have an understanding of what they are witnessing.

It's falling housing prices that's creating the enormous sales volumes. At a given sales volume, if the prices continue to drop it's because supply still overwhelms demand. I can't count the times you've insisted that most all REO sales now are accompanied by multiple bids and how frequently they sell for over list price. That is an example of demand overwhelming supply. What do the buyers do in these cases? They bid up the price of the home. Prices do not go down when there is insufficient supply to meet demand.

You comment over and over on the multiple bid phenomena, yet now in the post above you maintain that the supply of REOs is actually limiting the sales volume, while prices continue to drop. Buyers must be bidding the prices down, instead of up. Basic economic theory has been suspended in Clark County.

[rpachigo]

He just doesn't get it, Tony.

[rpachigo]

Real Estate Analysts Predict Foreclosure Flood

Real Estate Analysts Predict Foreclosure Flood - San Diego, California Talk Radio Station - 760 KFMB AM - 760kfmb

[rpachigo]

Las Vegas home prices continue to slide

Las Vegas home prices continue to slide - Breaking News - ReviewJournal.com

Some notable quotes from article:

Housing analyst Larry Murphy was hoping he was wrong when he said median existing home prices in Las Vegas could slide to $100,000 by year’s end.

If prices continue to fall by nearly $10,000 a month as they did in April, they’ll be there by the end of summer.

He anticipates a drastic increase in foreclosure inventory following the moratorium. The pipeline of homes in foreclosure is “busting at the seams,” Love said.

“Who knows what’s going to happen,” Murphy said. “It’s just phenomenal to see these prices of 1998. Take yourself back 11 years. I wish I could do that with my age.”

[olecapt]

Originally Posted by tony soprano

Yes, the laws of supply and demand hold true for every market with the exception of Las Vegas real estate. Either that, or someone doesn't have an understanding of what they are witnessing.

It's falling housing prices that's creating the enormous sales volumes. At a given sales volume, if the prices continue to drop it's because supply still overwhelms demand. I can't count the times you've insisted that most all REO sales now are accompanied by multiple bids and how frequently they sell for over list price. That is an example of demand overwhelming supply. What do the buyers do in these cases? They bid up the price of the home. Prices do not go down when there is insufficient supply to meet demand.

You comment over and over on the multiple bid phenomena, yet now in the post above you maintain that the supply of REOs is actually limiting the sales volume, while prices continue to drop. Buyers must be bidding the prices down, instead of up. Basic economic theory has been suspended in Clark County.

Don't put words in my mouth. The scenario is national but likely worse in places like Las Vegas, Phoenix and the Inland Empire in CA.

I have never insisted that "most" REO sales are multiple bid. Nor that "most" REO sales are over list. I don't know what the percentages are and it would take a lot of doing to find out. Anecdotally however the lower half of the REO market is highly competitive.

If you want to dispute what I put forth argue with it...not with some strawman version that you create.

Prices are down because the list prices are down. Sales are at roughly 100% of list on average. The actual net is a few percent lower due to the common paying of buyers costs. That though is assumed in the pricing. They have been close to that for some months. Pricing has continued to decline driven by the list prices.

The inventory continues its downward march. Something has to give soon.

[tony soprano]

Originally Posted by olecapt

I have never insisted that "most" REO sales are multiple bid.

Really?

Originally Posted by olecapt

Below 100K virtually everything is multiple offers.

In the 100K to 150K...which I consider the sweet spot for investors virtually everything has more than one offer but often a number are low balls from investors looking for a cheap deal. They are going at list or about there.

http://www.city-data.com/forum/8770653-post990.html

So virtually everything under $150K has either multiple bids or more than one offer? You understand that "more than one offer" means multiple bids? The median REO sale is well below $150K. So when you say virtually everything below $150K has multiple offers, by extrapolation you have said most REO sales are multiple bids. Why are you trying to backpedal now? Does virtually everything under $150K have multiple bids or not?

Originally Posted by olecapt

If you want to dispute what I put forth argue with it...not with some strawman version that you create.

There's no strawman needed. This statement is demonstratably wrong -

Originally Posted by olecapt

Unless something gives we will be unable to maintain the volume of REO sales as there will simply not be enough to meet the demand. And prices continue down.

If there's inadequate supply to meet the demand, prices will not, and do not, continue down.

[Wing Feathers]

I am looking at stuff under $100k and can tell you that EVERYTHING has multiple offers ABOVE retail. Either that or I am being lied to by everyone I talked to.

[tony soprano]

Originally Posted by drinkme

I am looking at stuff under $100k and can tell you that EVERYTHING has multiple offers ABOVE retail. Either that or I am being lied to by everyone I talked to.

Don't worry, apparently in Vegas when this happens prices still go down.