[ParkTwain]

Never take specific financial advice from Money magazine. You will always be BEHIND the curve. There will be a point, if it's not already here, when the news about continuing home price declines serves to benefit only savvy investors and not the more typical home-buyers.

[gregoryinvegas]

Originally Posted by ClarkGrisowld

A couple of recent articles posted give a pretty good perspective to both sides of the argument.

I think you can expect Vegas to move before the national market. So while the national market clearly will not bottom for probably 12-18 months, that doesn't mean Vegas hasn't.

Personally, I see NO catalyst to turn things around. Perhaps we are plateauing at a bottom, but I feel like at this point the only real action is going to be people who have to buy (lease is up) or people who have to sell (foreclosure, dwindling). If you haven't sold by now, and/or don't have to, you probably will wait another year or more. And if you are a buyer, with no catalyst on the immediate horizon you will wait and wait for the perfect opportunity.

Business is down a bit on the Strip, but I expect the national economy to turn the corner in 3-6 months. So I think we could see a healthy rebound here in Vegas starting as early as Q4. I don't foresee significantly more lay-offs (which always precedes a true real estate bottom), but I also don't see any reason why home buyers and investors would be anxious to make a play any time soon.

I think whomever commented about City Center and Encore opening as being the turning point is probably correct. You still have to look at the ratio of price to income (as most of those jobs are decent paying, but not really enough to support good growth at current price levels)

"I don't foresee significantly more lay-offs"

Well... unfortnately I do. How about a 14% budget cut in Nevada, that would hurt the economy BIG time

[crashed]

Originally Posted by airics

if you are basing the 182k on a listing price of a repo, you are way off, the houses in aliante sell for more than list.

This is a house price that has already closed, so yes it did sell for $182,000 not just list price.

[dude66]

Originally Posted by ClarkGrisowld

but I expect the national economy to turn the corner in 3-6 months. So I think we could see a healthy rebound here in Vegas starting as early as Q4.

Not likely. How can the national economy rebound when it's entirely dependent on a commodity (oil) that is relentlessly getting more expensive every day? It just hit $133/barrel today(!)

And the Fed doesn't share your view, either:

May 21, 2008

Fed sees slower growth, higher unemployment in '08

The Federal Reserve on Wednesday sharply lowered its projection for economic growth this year, citing blows from the housing and credit debacles along with zooming energy prices. It also expects higher unemployment and inflation.

Fed sees slower growth, higher unemployment in '08 - Yahoo! News (broken link)

[jpk]

Originally Posted by dude66

Not likely. How can the national economy rebound when it's entirely dependent on a commodity (oil) that is relentlessly getting more expensive every day? It just hit $133/barrel today(!)

Agreed that we're hosed as long as oil stays at record highs. However, my personal theory is that the runup in oil will end after the next President takes office. Oil companies have had free reign under Bush/Cheney (free trader MBA and former oilman) and have taken full advantage of the gift. They will be under pressure from either McCain or Obama and will correct prices pretty quickly in order to avoid major government intervention in their business.

I was living in Pittsburgh in '99 and regular gas was .89. 89 cents! Clinton was manipulating oil prices at the time by opening up the strategic oil reserves. The price is now more than four times that and I see it as a reaction by big oil to get what they can while the getting is good under Bush.

As long as energy is sky high, we're hosed. But I really don't see how this trend can continue indefinitely when there is plenty of oil in the world.

[airics]

crashed - do you have an mls number - there was a house at aliante that i had looked at too, it was cheap.. dont remember exactly - but it had a mold problem also

[dano]

Originally Posted by jpk

Agreed that we're hosed as long as oil stays at record highs. However, my personal theory is that the runup in oil will end after the next President takes office. Oil companies have had free reign under Bush/Cheney (free trader MBA and former oilman) and have taken full advantage of the gift. They will be under pressure from either McCain or Obama and will correct prices pretty quickly in order to avoid major government intervention in their business.

I was living in Pittsburgh in '99 and regular gas was .89. 89 cents! Clinton was manipulating oil prices at the time by opening up the strategic oil reserves. The price is now more than four times that and I see it as a reaction by big oil to get what they can while the getting is good under Bush.

As long as energy is sky high, we're hosed. But I really don't see how this trend can continue indefinitely when there is plenty of oil in the world.

This is flawed analysis. Oil is a commodity and is subject a free market where buyers and sellers set the price. Oil production is the problem not oil supply and as long as OPEC gets to contro the bulk of production, it indirectly gets to set the price. Although I've never liked the fact that Bush is easily associated with the oil industry, he has no influence over it as witnessed at his last visit to Saudi Arabia. Even if Obama won the election and "intervened in their businesses" (actually a tactic of communist governments) he would have little sway over the market in general since U.S. companies are such small players. There is a possibility that oil is "in a bubble" but the only way to deflate it is to significantly increase world-wide prouction to the point that it is out-stripping world-wide demand.

[jpk]

Originally Posted by dano

This is flawed analysis. Oil is a commodity and is subject a free market where buyers and sellers set the price. Oil production is the problem not oil supply and as long as OPEC gets to contro the bulk of production, it indirectly gets to set the price. Although I've never liked the fact that Bush is easily associated with the oil industry, he has no influence over it as witnessed at his last visit to Saudi Arabia. Even if Obama won the election and "intervened in their businesses" (actually a tactic of communist governments) he would have little sway over the market in general since U.S. companies are such small players. There is a possibility that oil is "in a bubble" but the only way to deflate it is to significantly increase world-wide prouction to the point that it is out-stripping world-wide demand.

Oil is not a true free market, it's got artificial barriers to entry (legal restrictions on drilling the US, nationalized oil fields in OPEC nations) such that only a few nations and a few major oil companies artificially control the market. Right now Exxon and the other majors are intentionally not investing in drilling or exploration which keeps supply low. No question OPEC is hurting us too. But they only control 40% of the supply. The other 60% is not OPEC. The big oil companies are quite happy to sit on their proven finds and not go looking for more oil. They'll get pressure to start doing more drilling.

Yes, Obama and McCain will both threaten government regulations that are quasi-communist. Hopefully, it doesn't come to that. My bet is in order to avoid that scenario the oil companies will increase supply.

And yes, there is also rampant speculation in oil futures too. That also lends itself to a correction. Which is why I figure next year by the time we have a new administration there will be a correction.

Anyways, this is getting off topic. My point was just that energy prices will not be sky high forever and we won't be in a recession forever, which is why the real estate market will not be depressed forever.

[dude66]

Originally Posted by jpk

My point was just that energy prices will not be sky high forever and we won't be in a recession forever, which is why the real estate market will not be depressed forever.

I'm gonna disagree with you on that. An analyst on CNBC today flat out predicted $12-$15 gallon gas is coming:

HIRSCH: There's no single thing that's going to solve this problem because it's as massive as one can possibly imagine. And the prices that we're paying at the pump today I think are going to be the good old days because others who watch this very closely forecast that we are going to be hitting $12 and $15 per gallon. And then, after that, when world oil production goes into decline, we're going to talk about rationing.

Video of interview:
YouTube - Dr. Hirsch on CNBC


Micro economy, say hello to macro economy! Real estate will never survive this. In the long term, homes will simply be a place to live. Just shelter. Not an investment. I don't know what the timeframe for this will be, but it's coming faster than many people think.

[Coop01]

I notice that a lot of you are employed directly or tangentially in the Real Estate and Loan Business. I'm trying to get educated into the reasons why all of this happened. I ran across an hour long web audio presentation by Chicago Public Radio in episode 355 of "This American Life" entitled The Giant Pool of Money.
This American Life
I found it so intriguing and informative, I thought I'd share it and see if you folks in the "Biz" think it is accurate.