[tony soprano]

There's not much to suggest that the Vegas housing market will finish 2010 strongly. The local employment rate is unlikely to materially improve. Many of the leading macro-economic indicators have begun to roll over (if they haven't already done so). The tax credit will be gone. Some portion of future demand was pulled forward simply because of the tax credit. Interest rates are already at decade's lows. I would consider it a moral victory if median prices finished on par with their current level.

[JM95]

I feel a certain inflation whenever when Meredith Whitney talks economics...But it would be be better if she were doing the show in a Hooters outfit. The Kenyan should have hired her instead of Geithner. Her used underwear has more brains than Paul Krugman.

Originally Posted by 007 license to sell

This is something that we have to take into consideration, whether you agree with it or not.

[SIZE=4]Housing Double-Dip to Slow US Economy's Recovery: Whitney - CNBC[/SIZE]
Jun 21, 2010 ... The US economy faces a perilous second half as a new set of problems hits real estate and thwarts any chance for a strong recovery, ...
www.cnbc.com/.../Housing_Double_Dip_to_Slow_Economic_Recovery_Whitney

[Slim10]

There's increased sales activity in townhouses/condos though (4587 1st half 2010 compared to last yr's 3867).

SFR median prices are ~1.4% below last yr whilst twh/cnd are on par with last yr. Consider that 2009 prices was 2/3rd that of 2008 and under 50% of 2006, its a sign of a bottom (assuming no double dip).

The higher twh/cnd activity can be explained by prices which are 33% of 2006 prices and 50% of 2008.

More importantly, I see the end of the tax subsidy as effect a $6.5k/8k price increase already. This should have a bigger impact in NV due to the lower price base than national sales numbers.

Judging by listing prices and actual sales price to list, I suspect we might see a very slight increase in prices by yr end even if sales numbers drop off from July.

Olecapt's REO inventory chart is relevant. There's an increase in REO inventory from May which imho is still not in sufficient numbers to affect overall prices. However if the trend continues, this may have an adverse impact on prices.

I've been tracking my zip for REO risk and owners at high risk of foreclosure have dipped from ~20% at its peak to ~6% (due to the crazy levels of foreclosures) so that at least is a bright spark for me. Not too many more to come.

[Swigchow]

Originally Posted by Slim10

There's increased sales activity in townhouses/condos though (4587 1st half 2010 compared to last yr's 3867).

SFR median prices are ~1.4% below last yr whilst twh/cnd are on par with last yr. Consider that 2009 prices was 2/3rd that of 2008 and under 50% of 2006, its a sign of a bottom (assuming no double dip).

The higher twh/cnd activity can be explained by prices which are 33% of 2006 prices and 50% of 2008.

More importantly, I see the end of the tax subsidy as effect a $6.5k/8k price increase already. This should have a bigger impact in NV due to the lower price base than national sales numbers.

Judging by listing prices and actual sales price to list, I suspect we might see a very slight increase in prices by yr end even if sales numbers drop off from July.

Olecapt's REO inventory chart is relevant. There's an increase in REO inventory from May which imho is still not in sufficient numbers to affect overall prices. However if the trend continues, this may have an adverse impact on prices.

I've been tracking my zip for REO risk and owners at high risk of foreclosure have dipped from ~20% at its peak to ~6% (due to the crazy levels of foreclosures) so that at least is a bright spark for me. Not too many more to come.

So, what's the bottom line? Las Vegas is still in the dumps?

[olecapt]

Originally Posted by Swigchow

So, what's the bottom line? Las Vegas is still in the dumps?

Looks like it is going to stay in the same place. Quick look at July says pricing is about the same. Average is way up but that is a single expensive house.

Split is still changing. Classics and REOs continue to drop and shorts are now the number 1 sales category...

REO inventory appears to be stabilizing.

Overall it looks like the doldrums.

[tony soprano]

Originally Posted by Slim10

More importantly, I see the end of the tax subsidy as effect a $6.5k/8k price increase already.

Huh?

[Slim10]

Originally Posted by tony soprano

Huh?

No homebuyers tax credit = higher cost of housing = indirectly higher price.

Originally Posted by Swigchow

So, what's the bottom line? Las Vegas is still in the dumps?

As per olecapt, don't expect much change this year but prices will likely go up in the medium term.

My recommendation for investors is to buy townhouses/condos with low maintenance/HOAs. There's more upside than SFRs.

[AD1985]

Originally Posted by Slim10

My recommendation for investors is to buy townhouses/condos with low maintenance/HOAs. There's more upside than SFRs.

That's interesting and it goes against what I've learned of SFRs having better appreciation potential than attached homes. Why do you think those have more potential? Are HOAs really that burdensome to the majority of buyers?

[tony soprano]

Originally Posted by Slim10

No homebuyers tax credit = higher cost of housing = indirectly higher price.

Except the market has not cleared the pipeline of homes still subject to the tax credit. That was the intent of extending the tax credit for an additional 90 days - to give the buyers under contract by the April deadline additional time to close and still get the credit. There is a pipeline of properties under contract that were not going to close by the June 30th deadline.

[Slim10]

Originally Posted by tony soprano

Except the market has not cleared the pipeline of homes still subject to the tax credit. That was the intent of extending the tax credit for an additional 90 days - to give the buyers under contract by the April deadline additional time to close and still get the credit. There is a pipeline of properties under contract that were not going to close by the June 30th deadline.

Agreed. Just that the credit no longer applies to contracts signed/entered after May 1st i.e. its pricier now.

Originally Posted by AD1985

That's interesting and it goes against what I've learned of SFRs having better appreciation potential than attached homes. Why do you think those have more potential? Are HOAs really that burdensome to the majority of buyers?

TWH/CND median prices are at $70k with the previous peak @ $206k which means its 34% of peak. SFR prices are at $140k with a peak of $315k i.e. 45% of peak. That's a potential price differential of 10% which be a factor of people selling due to high, unaffordable HOA maintenance.

In layman's language, TWH/CND price psf is lower than SFR i.e. you get a bigger house. And if prices of all types of housing go back to peaks, one would earn more from townhouses/condos vs SFRs $ for $.

One indication. yr-on-yr, TWH/CND medians have gone up 6% whilst SFR prices are still as they were. Sales have gone up 17.3% in the 1st half for TWH/CNDs as compared to -2% for SFRs.

And as usual, I would qualify to say that I don't think prices will go back to peak but doesn't change the recommendation.