[olecapt]

Originally Posted by bumpercar

So the crane indicator is not very telling. It's probably the most lagging indicator of them all. Miami is still dotted with cranes that are finishing high-rise condos that will sit vacant for a very long time.

And if you visited Puerto Vallarta or Cabo San Lucas 10 years ago you would have seen dozen of partially completed buildings that sat there for ten years as the bad Mexican economy ran its course.

The prediction this guy is putting forth is a meltdown. You do not finish things in a meltdown.

Vegas will slide through a recession based on its momentum. The majority of the new construction is sold...almost all of it with hard deposits. It will take a real disaster to stop those from finishing. With them comes the jobs to drive the growth.

[mooven]

Whether real estate is local or not, dude66 has a valid point. Las Vegas relies on tourism which could take a hit if what dude66 predicts comes true (increased gas, food, etc). While there is new construction in Vegas, I'm sure those projects were conceived prior to the recent economy troubles. If tourism suffers, then so will many locals' incomes. I really don't see any incentive for buying a house now. Why not wait until the outlook is less risky.

[airics]

have you seen the casinos lately, there is no shortage at the tables and slot machines. went to the strip last week and had to wait for a blackjack table at planet hollywood and o'sheas.

[bumpercar]

then you're implying that a meltdown hasn't occurred yet, so pointing to ongoing construction and saying it's evidence we're not in a meltdown is like saying that salt is evidence of salt. The presence of cranes means a boom has occurred but indicates nothing about present conditions and even less about the future, other than the fact that we'll soon have a pretty building standing where dirt once stood.

Originally Posted by olecapt

And if you visited Puerto Vallarta or Cabo San Lucas 10 years ago you would have seen dozen of partially completed buildings that sat there for ten years as the bad Mexican economy ran its course.

The prediction this guy is putting forth is a meltdown. You do not finish things in a meltdown.

Vegas will slide through a recession based on its momentum. The majority of the new construction is sold...almost all of it with hard deposits. It will take a real disaster to stop those from finishing. With them comes the jobs to drive the growth.

[olecapt]

Originally Posted by bumpercar

then you're implying that a meltdown hasn't occurred yet, so pointing to ongoing construction and saying it's evidence we're not in a meltdown is like saying that salt is evidence of salt. The presence of cranes means a boom has occurred but indicates nothing about present conditions and even less about the future, other than the fact that we'll soon have a pretty building standing where dirt once stood.

There has been no meltdown at this point. There has been a substantial adjustment in the price of real estate but not nearly enough to overcome the 2004 runup.

What has occurred is that sales volume has gone up and prices increased a little. Tens of billions of dollars of building is continuing with the hiring attending there to about to occur.

It is not a situation that would obviously presage a local economic problem.

[bumpercar]

Meltdowns aren't normally presaged. But when they are presaged they're presaged with events just like what's occurring now, in particular, the de-leveraging of credit and risk. It seems hard for people to believe we're in a meltdown since everything is happening in slow motion. A $10B write-off here. A credit downgrade there. It all seems so manageable and contained, just like a gentle wave of water in the open ocean, otherwise known as a tsunami.

Originally Posted by olecapt

There has been no meltdown at this point. There has been a substantial adjustment in the price of real estate but not nearly enough to overcome the 2004 runup.

What has occurred is that sales volume has gone up and prices increased a little. Tens of billions of dollars of building is continuing with the hiring attending there to about to occur.

It is not a situation that would obviously presage a local economic problem.

[dude66]

Originally Posted by olecapt

Sorry Real Estate Remains Local.

I will start to really worry when the cranes on the strip shutdown. When those vast edificies underway become inactive monument to what was to be but is no more.

In the interim pass the grain of salt.

Let's get real here.

There were HUGE NUMBERS of new homes being built even as the housing bubble started to burst. New construction means absolutely nothing, other than the fact that those doing the constructing took a bet on a rosy future and may very well lose their shirts due to their stupidity. Just ask all the condo developers in Miami.

Same goes for commercial real estate, which is also slowing down. All those endless Starbucks and Home Depots and Krispy Kremes being built? Well now they're going to start closing. The companies bet wrong and are scaling back their expansion given the economic realities.

I grant you that Vegas is a tourist mecca and has a unique stature among American cities. This does not make it recession proof, certainly not the kind of recession we're facing.

The causative reasons for the coming pain are not local, they are global, and will affect everyone. I'm amazed you think Vegas will somehow avoid the trouble. $103/barrel of oil affects everyone. Frozen credit markets affect everyone. $4/loaf of bread affects everyone. We are not immune.

What Bumpercar said is absolutely correct -- the coming meltdown IS being presaged right at this very moment. We're seeing trouble brewing in the financial markets unlike anything we've ever seen. You think there's some magic wand that'll make that all go away?

[SHEPNYC]

The stock market is a pretty good measure of the future:

Dow is:

Down over 600 points in the past 3 trading sessions.

Down almost 2000 points since July 2007.

Up only 900 points since August 1999.

I'd hold off purchasing real estate until late 2009 or early 2010. I don't see any big run-up in prices over the next 18 months and more likely a second round of decreases as the recession becomes reality. Warren Buffet says we are in a recession right now, that's good enough for me.

[LIS123]

I'll agree that there's no reason to expect an increase in housing prices in the next 18 months. It's likely to get worse before it gets better. Energy and food inflation (excluded from the CPI) is severer and affects virtually everyone.
My advice is, you should buy a house if you NEED A PLACE TO LIVE! I wouldn't EVER recommend buying a house to make money or as an investment. Housing is difficult b/c there are such high maintenance costs. Even if you buy a house as an investment and never live there, you'll be out at least $10K/annum (often a LOT MORE) just on taxes, utilities, maintenance etc. That's without repairs, upgrades, etc.
RE is not a very liquid asset, the way stocks are. It's still much easier to sell stocks than RE (whether it's for a gain or a loss). If you have extra money, why not play it safe and get a steady return that's also easily-to-liquidate if needed?

[airics]

buy a repo $700 payment rent it for $1400, depreciate it on taxes... that is what is currently selling the houses