[bumpercar]

Tonight's news says the REPO credit will be $7,000. What a slap in the face for non-REPO sellers. I realize the goal is to get REPOs off the market faster to stabilize non-REPO pricing but new REPOs will continue to hit the market to replace the REPOs bought, for the simple reason that the housing values tied to these existing mortgages are just too high and not affordable by current owners. The only true solution is for prices to correct to a level that makes houses affordable again and that's happening now on its own.

Still, if they persist with this foreclosure credit they better make it retroactive otherwise they risk freezing up alot of the REPO purchases already in the pipeline (including some of mine!).

Originally Posted by olecapt

It would certainly increase volume. Probably raise price some on the REPOs. I doubt it would have much effect on non-REPO sales.

Note that it effectively raises the price to investors who are the biggest purchasers of REPOs.

I would guess mostly a volume increas on REOs...which would pretty quickly help the market for nonREPOS by exhausting the inventory of well priced REOs.

Note that mostly nonREPOs don't compete with REPOs. Sell on a different price line and at much lower rates.

Then again if you want much of the fine product you pay. If you don't care where you live or your kids go to school you don't.

[smalldog]

I feel the bottom is still far after reading the data. But too bad I just signed the contract.


The number of Clark County homes that entered preforeclosure status reached a record 6,152 in March, up 52 percent from February and more than double the 2,813 preforeclosures in the same month a year ago, Sacramento, Calif.-based Foreclosures.com reported.

ReviewJournal.com - Business - ECONOMY: Bad news mounts in housing

[olecapt]

Originally Posted by smalldog

I feel the bottom is still far after reading the data. But too bad I just signed the contract.


The number of Clark County homes that entered preforeclosure status reached a record 6,152 in March, up 52 percent from February and more than double the 2,813 preforeclosures in the same month a year ago, Sacramento, Calif.-based Foreclosures.com reported.

ReviewJournal.com - Business - ECONOMY: Bad news mounts in housing

However the official sales of SFRs hit 1487 in March up from 1098 in February. And with the pending trend it is likely we will see upward of 1700 in April. Inventory is stable to dropping.

Price continues to drop at abut a 1.3% rate. That is close to last month so we are seeing a consistent decline in price.

So we got a 1.3% price decline and a 35% increase in volume. Continue those trends for a few months and it will really get interesting. Project that out a few months and we end up with double the volume and a 5% or so price drop...Can't happen something has to give.

Put another way the 19 months of inventory in the start of the year is now 14 months. With an increase of 25% next month we will be under a year. If the trend continues down to 6 months by fall.

That sort of volume trend is likely to stabilize prices reasonably quickly..and someplace soon it has to start impacting the inventory.

Gonna be an interesting year.

[dmilll]

Fannie Mae lists the 2007 Median Income in Clark County as being $60K (rounded). They claim this number is taken from the HUD website. See the dropdown box in the following link by State.

https://www.efanniemae.com/sf/refmaterials/hudmedinc/

I found a chart by the Joint Center for Housing Studies that lists the ratio between Median Income and Median Housing Cost from 1980 to 2006. Excluding the run-up years (2005-2006), it appears that the average ratio for Las Vegas is 3.46.

The State of the Nation's Housing 2007

Using these numbers, I calculate the traditional Median Home Cost in Las Vegas being at around $208K.

Does anyone know what the actual Median Home Cost in the Valley is for 2007? Does anyone have another source of information that looks at this a different way?

[olecapt]

Search back a bit. There were a couple of discussions on the issue.

The question in my mind is whether a historical number has any relevance. Basically cheap land areas tend to have much lower ratios. Las Vegas historically was a cheap land area. It no longer is. So does that change the ratio? Do you go towards Southern California and away from Dallas?

I think we find out when the numbers stabilize. Won't be long. The present situation cannot be sustained.

[bumpercar]

Land prices in Vegas rose because housing prices rose, not the other way around. By definition land prices must rise in bubbles since labor+materials cost can't possibly rise as fast as a bubble. All the premium is in the land and that's what's disappearing before our eyes today.

Originally Posted by olecapt

Search back a bit. There were a couple of discussions on the issue.

The question in my mind is whether a historical number has any relevance. Basically cheap land areas tend to have much lower ratios. Las Vegas historically was a cheap land area. It no longer is. So does that change the ratio? Do you go towards Southern California and away from Dallas?

I think we find out when the numbers stabilize. Won't be long. The present situation cannot be sustained.

[SLCPUNK]

Originally Posted by bumpercar

Resale prices will rebound by 2009, observer says

ReviewJournal.com - Business - HOUSING: Analyst senses slump's bottom

Of course they are saying that, they were saying it last year too.

[olecapt]

Originally Posted by SLCPUNK

Of course they are saying that, they were saying it last year too.

I am curious. Cite a source. I don't remember anyone claiming a bottom a year ago. Not NAR by the way. Somebody local...

[olecapt]

Originally Posted by bumpercar

Land prices in Vegas rose because housing prices rose, not the other way around. By definition land prices must rise in bubbles since labor+materials cost can't possibly rise as fast as a bubble. All the premium is in the land and that's what's disappearing before our eyes today.

Land prices rose in Las Vegas because of changes in BLM policy. As long as BLM gave away land cheap land prices stayed low. When BLM was instructed to sell land for what the market would bear prices went up and became dependent on the cost of housing.

So What?

No more cheap land.

[bumpercar]

Do you think builders would have paid those rates for BLM land if they couldn't pass the cost to buyers? The BLM can try charging whatever they want, nobody's buying. The market sets the price and that price is down significantly. Do you think the 40% haircut on home prices is from discounted 2x4's, stucco, and cheaper labor? Nope. If you want cheap land look under the vacant houses.

Originally Posted by olecapt

Land prices rose in Las Vegas because of changes in BLM policy. As long as BLM gave away land cheap land prices stayed low. When BLM was instructed to sell land for what the market would bear prices went up and became dependent on the cost of housing.

So What?

No more cheap land.