[ND_Irish]

Originally Posted by BBMW

Prices alone do not make a bubble. Prices may peak out, and even drift downward if the prices are not sustainable. That would not be a bubble pop, that would be normal market fluctuation. Markets are supposed to do that.

2008 was definitely a bubble pop. It was caused by the fact that mortgage originators (banks and others like Countrywide), we're making loans they knew would go bad, so they could get the origination fees, then dump the loans on the secondary market and get rid of them. They were lending to buyers with no equity, on variable rate loans with teaser rates that were guaranteed to go up. There were a lot fo no-doc loans, where the lender had no idea what the borrowers income was. Negative amortization loans, so the principle balance on the loan went up over time, not down. I can go on and on. It was a credit bubble, NOT a housing price bubble (at least not directly, but the easy credit pumped up prices.) And, of course, the originators weren't correctly recording and archiving the loans, so that when they did blow up, they were not in a position to legally foreclose. Even now, there are still likely five figures of houses in Clark County stuck in delinquency limbo, many abandoned, with now way of working them out.

So when the market did top out and start coming down, people with no equity simply walked away, and this stated positive feedback loop of prices going down, more "homeowners" going into negative equity. Add to this that older variable rate loans were coming off teaser rates, forcing the borrowers to pay more, and now on a house that's likely worth less than the loan they were paying. Pop.

Now, AFAIK, none of that is happening now. The banks have tightened up significantly. If they're writing a loan, likely the borrower is qualified. If that's not the case put it out there, because that would be an indicator of a bubble. But what I see the primary issue now is simply supply and demand. If prices are still going up, they simply haven't hit equilibrium yet. As I said before, I think a lot of this is being driven by the LA housing market. When that tops out, likely so will Vegas

I did not say Las Vegas home prices were in a bubble, but I did express concern that valuations for homes in Las Vegas are getting stretched beyond the means of individuals to not only pay for them but maintain them. My reference to Fitch Ratings' assessment of Las Vegas in the article I cited was intended to convey that.

You completely are ignoring other factors in play here. It may not be the financing of homes which brings home prices down this time. There has been inflation in several other areas of the economy which have helped to re-inflate home prices. If those areas suffer a setback, it could have a negative impact on home prices in Las Vegas and elsewhere in the United States.

Finally, you are incorrectly assuming we are dealing with a normal market with regard to housing and other things backed by debt. Between the Fed and the federal government intervening in the economy, markets have been distorted once again just like during the dot-com and housing bubbles. The amount of consumer debt outstanding has increased by almost 50% in less than a decade. That is not sustainable.

[beachhead]

Originally Posted by BBMW

As I said before, I think a lot of this is being driven by the LA housing market. When that tops out, likely so will Vegas

This makes a lot of sense to me. Seems like Las Vegas is a bit of a "bedroom" community for the southern CA area. From retirees looking to stretch their equity but stay close to the kids to lower income people trying to get their shot at the American dream. Not the "only" driver, but I'd think it does play a significant role.

[SportyandMisty]

Originally Posted by BBMW

Edit: Found it. Latest report is from 2016. They have charts that shows delinquencies and foreclosures

https://www.unlv.edu/sites/default/f...t-Sept2016.pdf

Thanks!

[BBMW]

As I said previously, a lot of this is outside money coming into Vegas. The question becomes how much longer will that happen? I bet it keeps happening as long as the SoCal market keeps running up. And since housing supply in SoCal is land limited by the anti-growth measures put into place by a lot of levels of government out there, I don't see that changing any time soon.

And yes, the fed is pushing this. But this is the new (and, really, not so new) normal. Unless we saw a real run up in consumer price inflation, the aren't going to change. If you look at the amount of cash the Fed has dumped into the economy in the last decade or more, you'd be amazed that a loaf of bread isn't $20. That being the case, they may be right. But the side effect of this is to push up the value of appreciating assets. Look at gold. Look at the stock market. If the Saudis didn't want to drop the hammer on Iran, oil would be up there also.

Originally Posted by ND_Irish

I did not say Las Vegas home prices were in a bubble, but I did express concern that valuations for homes in Las Vegas are getting stretched beyond the means of individuals to not only pay for them but maintain them. My reference to Fitch Ratings' assessment of Las Vegas in the article I cited was intended to convey that.

You completely are ignoring other factors in play here. It may not be the financing of homes which brings home prices down this time. There has been inflation in several other areas of the economy which have helped to re-inflate home prices. If those areas suffer a setback, it could have a negative impact on home prices in Las Vegas and elsewhere in the United States.

Finally, you are incorrectly assuming we are dealing with a normal market with regard to housing and other things backed by debt. Between the Fed and the federal government intervening in the economy, markets have been distorted once again just like during the dot-com and housing bubbles. The amount of consumer debt outstanding has increased by almost 50% in less than a decade. That is not sustainable.

[lvmensch]

Originally Posted by SportyandMisty

Thanks!

Unfortunately it appears Lied went out of the housing statistics business in 2016.

I am however not sure there is anyway to collect such a statistic. The old one for vacant housing was NV Energy on how many houses lacked power. Lied used to have access to that statistic but I have not seen it recently.

You can get NOD and REO statistics but they tell nothing about a home that has fallen through the crack. Eventually such a house should end up in a tax sale. Though if someone is living in it and paying the taxes that will not happen. Such a house however is not abandoned.

So could we actually have large numbers of abandoned housing? I don't think so.

To the thought that debt is getting too big. Forbes does not agree..They cite the ratio of the debt to the GDP which is better by a lot than it was in 2008.

https://fred.stlouisfed.org/series/HDTGPDUSQ163N

[BBMW]

Jim, does anyone collect delinquency statistics? That's the heart of the matter. How many houses are there out there with long term delinquent mortgages, that have not been foreclosed.

[lvmensch]

Originally Posted by BBMW

Jim, does anyone collect delinquency statistics? That's the heart of the matter. How many houses are there out there with long term delinquent mortgages, that have not been foreclosed.

Last number I can find is for the fourth quarter of 2016. 2.19%. However the trend was down fast. So below 1.5% by year end. A little high but not outrageous and coming down fast. So again no indication that there is any big problem.

[JonathanLB]

I'm a little amused people in LAS VEGAS could be talking about a housing bubble or implying that your prices are getting high. You have some of the cheapest housing I've seen anywhere, which is one of the biggest appeals to living in Vegas. You can get a really solid house for like $400,000 or $500,000, which is basically nothing for a house in most major cities. You wouldn't even get a good condo for that many places. And for $1-2M you're looking at a pretty awesome mini mansion, whereas again in many big cities that doesn't get you much.

[beachhead]

Originally Posted by JonathanLB

I'm a little amused people in LAS VEGAS could be talking about a housing bubble or implying that your prices are getting high. You have some of the cheapest housing I've seen anywhere, which is one of the biggest appeals to living in Vegas. You can get a really solid house for like $400,000 or $500,000, which is basically nothing for a house in most major cities. You wouldn't even get a good condo for that many places. And for $1-2M you're looking at a pretty awesome mini mansion, whereas again in many big cities that doesn't get you much.

Well, Las Vegas was hit pretty hard in the last national housing "bubble burst". And "expensive" is really dependent on your perspective. You sound like you currently live in a high cost of living area (CA or northeast), and your perception of "normal" only makes it seem like things are more affordable here. And they actually ARE if you can bring the income stream/equity you are used to in that high cost area with you.

But, if you're resetting your income to the local economy when you relocate and not bringing any equity, you would gain a sudden appreciation for what's expensive and what's not. I think this is why the southern CA market is a driver in the current cost run up: people are able to sell their house in CA, and take the equity and buy a house in NV with it, and then retire/work for less, and get out of an over taxed, over regulated state, but still be close enough to visit relatives.

So, you should take advantage of this, and don't just buy one mcmansion, buy two! They are cheap ya know..

[NLVgal]

Originally Posted by BBMW

I can't speak to LV / NV specifically, but look at doctors' salaries in the US vs the rest of the industrialized world. We're way higher.

That's not to say what your saying is wrong. Everyone involved needs to figure out how to do at least the same, if nor more, with significantly less money.

If you cant speak to the local market, then don't, or at least use us as a model.

You live in NYC. You have never been a Las Vegas resident.