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In looking at the specific resale Las Vegas data from NARREIA, the month over month is actually starting to improve with DOM decreasing and supply for resales in the under $300K down to about 120 days and $300-450 under 150 days. At one point earlier last year it was over 350 days. It is time that we stop trying to compare back to 2004,05,06 and even the beginning of 07 to determine the state of the market. It really is becoming a month over month thing. Prices have even stabilized a bit only fluctuating a few hundred in a week as opposed to a couple thousand. Demand has also increased.
I'm always suspect of data generated by persons or organizations that have a financial interest in the results. It's very important to generate excitement and a "buzz" about the market. The fact remains that the home prices had risen to an unsustainable level by cheerleaders from the real estate industry that were telling naive prospective home buyers that they better get in this market now or they were never going to own a home.
Quote:
Originally Posted by VegasResident
Also we have to remember that houses went up over 50% in the boom so who care if it drops 40%? Well except the people that bought with ARMS when it was already up over 50%............
Well real estate brokers, mortgage industry and their ilk certainly don't care. The fed has effectively bailed them out. They made their money. They might have to drive lasts years model of a BMW or Mercedes but that's about it.
The people that were really hurt were those that were suckered into a "deal" that was generated by the excitement created by the real estate industry.
But I guess that's their problem. Right?
"Pass me the Dom Perrion Muffy."
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Quote:
Originally Posted by Coop01
Well real estate brokers, mortgage industry and their ilk certainly don't care. The fed has effectively bailed them out. They made their money. They might have to drive lasts years model of a BMW or Mercedes but that's about it. The people that were really hurt were those that were suckered into a "deal" that was generated by the excitement created by the real estate industry. But I guess that's their problem. Right? "Pass me the Dom Perrion Muffy."
Are you kidding me? Do you have any idea how many people are unemployed and hurting right now because of this? The only folks the fed has bailed out are the heads of banks, not the RE brokers and certainly not the loan originators. Your bias and contempt are clouding your ability to judge the situation for what it is.
I think we are 12-18 months from a bottom (nationally). Vegas may be different, and it's a somewhat unique market because the economy is structurally different than most.
I suppose my question is what drives the Vegas market - speculators or retirees? I think the speculators chase the retirees, which should be a fairly stable market. But a lot of speculators will and have been hurt by the economy, and I see a fairly short and shallow recession. Nationally, however, defaults aren't that high (but a high default rate is priced into CMO's). So the question is what the real default rate is going to end-up being. We have not had the economy wide layoffs typically associated with a recession. That's when defaults peak, when people start losing their jobs.
I'm trying to understand the Vegas market, thinking I'll probably buy in about a year. My feeling is it's a leveraged play on nationwide real estate, so to speak. So I have trouble believing prices don't have a little way down to go yet.
A question for the group:
With sales pending increasing, could that be because owners are pricing the property more realistic with the market? I look at Zip Realty often, and am simply amazed at the price reductions on many homes. 12-18 months ago you couldn't find a 2300+ square foot home in a 'nice' area for less then 325K to 350K. Now you can get them for 250K-270K and they are not REO. I find the price reductions to be CRAZY!
Also: With less homes on the market, are we going to see many more people put up the for sale sign when things start to move?
Are you kidding me? Do you have any idea how many people are unemployed and hurting right now because of this? The only folks the fed has bailed out are the heads of banks, not the RE brokers and certainly not the loan originators. Your bias and contempt are clouding your ability to judge the situation for what it is.
I admit to a partial bias against the mortgage brokers and real estate agents. Although "One size does not fit all", I think some were also swept up in the "irrational exuberance" (apologies to Greenspan) but they were the ones that reaped the immediate profits from this insane increase in home prices.
They presumably are the experts in this field and yet they hardily promoted the "selling" of these creative financing bundles to naive buyers.
Did they not realize that something was amiss in this scenario? Some where deep in the pit of their stomachs, they must have realized the absurdity of these schemes
As one young former loan originator told me in effect "Not my problem. I'm there to help them realize their dream to own a home. (and line his pockets in the mean time) They qualified under our policies"
I fear they do not have clean hands in this mess IMO.
Any one listening to the continuous bombardment over the airwaves offering;
"Easy financing" "No proof of income needed",
"Why pay rent when you can own for less", "
"The American dream is within your grasp",
"Don't hesitate. Call now before the prices increase",
"Buy a $400,000 home for only $600/month"
"Interest rates have never been lower"
I could go on and on about these deceptive radio, TV and print ads. There is no way you can deny this wasn't the case.
These are the same people that have abandoned that sinking ship and are now advertising on how to "profit from the Real Estate decline", "Buy a Foreclosure for 50% on the dollar".
Their purported plight is of little concern to me.
I admit to a partial bias against the mortgage brokers and real estate agents. Although "One size does not fit all", I think some were also swept up in the "irrational exuberance" (apologies to Greenspan) but they were the ones that reaped the immediate profits from this insane increase in home prices.
They presumably are the experts in this field and yet they hardily promoted the "selling" of these creative financing bundles to naive buyers.
Did they not realize that something was amiss in this scenario? Some where deep in the pit of their stomachs, they must have realized the absurdity of these schemes
As one young former loan originator told me in effect "Not my problem. I'm there to help them realize their dream to own a home. (and line his pockets in the mean time) They qualified under our policies"
I fear they do not have clean hands in this mess IMO.
Any one listening to the continuous bombardment over the airwaves offering;
"Easy financing" "No proof of income needed",
"Why pay rent when you can own for less", "
"The American dream is within your grasp",
"Don't hesitate. Call now before the prices increase",
"Buy a $400,000 home for only $600/month"
"Interest rates have never been lower"
I could go on and on about these deceptive radio, TV and print ads. There is no way you can deny this wasn't the case.
These are the same people that have abandoned that sinking ship and are now advertising on how to "profit from the Real Estate decline", "Buy a Foreclosure for 50% on the dollar".
Their purported plight is of little concern to me.
Your gripe is not with the RE Agents or even the loan officers. That kind of advertising was done almost completely by the lenders. I will agree to some guilt if an agent or a loan officer talked someone into going into one of these things over their head...but I certainly never did and I don't believe either of the loan officers I regularly use did either. In fact over the last five years I have been involved in only one "interesting" deal and that client was a hard money lender doing his own thing. I don't know for sure but I suspect that one worked out fine.
I think we have done three deals over the years that involved no money down and one of those was a VA. And I think all three worked fine.
I think we are 12-18 months from a bottom (nationally). Vegas may be different, and it's a somewhat unique market because the economy is structurally different than most...........
I would certainly agree with your assessment. The recent deployment of "Cheerleaders" en masse for the housing and mortgage industry bears this out. I watched with great interest on "insiders" (wink wink, nudge nudge) assessment of the current dilemma professing an "All is well. Just a minor road-bump to overcome" to end this.
Here is a very interesting analysis of the current, and I might add impending continuation of the crisis in the Housing and Credit bubble. It is seventy-five pages of graphs and charts just published in March 2008. It is not for the "Financially-challenged" but will prove of interest to thread members in the industry that are familiar with the terminology. It very clearly depicts a sober if not dismal outlook for this industry in the near to middle term IMO.
“Why We Are Still in the Early Innings of the Bursting of the Housing and Credit Bubbles – And the Implications for MBIA and Ambac.”
You will have to register to see the report but it is as thorough an analysis that I have seen and well worth it for financial analysts.
Value Investing Congress (http://www.valueinvestingcongress.com/tilson_presentation.php - broken link)
Your gripe is not with the RE Agents or even the loan officers. That kind of advertising was done almost completely by the lenders. I will agree to some guilt if an agent or a loan officer talked someone into going into one of these things over their head...but I certainly never did and I don't believe either of the loan officers I regularly use did either. In fact over the last five years I have been involved in only one "interesting" deal and that client was a hard money lender doing his own thing. I don't know for sure but I suspect that one worked out fine.
I think we have done three deals over the years that involved no money down and one of those was a VA. And I think all three worked fine.
As I said "One size does not fit all". Perhaps my frustration of the "virtual" destruction of the US economy does "cloud" my perspective. It is indeed, the "lenders" that were promoting these "deals".
As a "Value Investor" with substantial holdings in "Fixed" instruments, I still shake my head in wonderment at the quality of the financial advise that I receive.
Holders of US government and municipal bonds with increasingly low yields will help to rectify this fiasco IMO. I've avoided off-shore investment accounts because I did not fully understand them. I thought (wrongly) that I understood US investments and their risks but the "smoke and mirrors" that I just witnessed recently was spectacular. It gives me new meaning to the term "shock and awe"
A question for the group:
With sales pending increasing, could that be because owners are pricing the property more realistic with the market? I look at Zip Realty often, and am simply amazed at the price reductions on many homes. 12-18 months ago you couldn't find a 2300+ square foot home in a 'nice' area for less then 325K to 350K. Now you can get them for 250K-270K and they are not REO. I find the price reductions to be CRAZY!
Also: With less homes on the market, are we going to see many more people put up the for sale sign when things start to move?
Thanks
Yes and no. There are two price lines Gulfer...about $20 a square foot apart. Been holding that way since the end of the year. Some neighborhoods are heavily impacted by the foreclosures and are down 40 or 50% from the peak. Others are lightly impacted or not at all and are down 15 or 20% from the peak. Expensive homes in Sun City are experiencing both relatively high volume and increasing prices. They only dipped maybe 10% at the trough and then started climbing back up. The rest of Sun City is down 20% and is not yet stable. There are however particular models that have in fact increased in price through the last year.
So there is no fully consistent pattern. I think the volume is increasing like gangbusters. If that continues for a couple more months pricing are going to stablilize. I don't know how long the bottom will be but I think we are in it or very close.
Note that given all this any steps that stop the foreclosures will likely cause a price increase. We need the flow of foreclosures to keep the market at its present balance. Limit foreclosures and price will inevitably rise.
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HOUSING: Analyst senses slump's bottom
