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In the Vegas market everything has slowed way down...but things are actually acting stable...volume of SFRs has been the same for three months running and median price declines for SFRs is a fraction of a percent.
I have however a couple of light condo listings that have been just laying there. So I went off to look at what is happening to condos.
First I pulled out the conversions which do bad things to buyers and statistics. And I cut out those that sold over about $250 per SF...we have a reasonable big high rise market but they start at above $300 psf.
I plotted out median price and found some siginificant drop with stability the last months. Then I ran a rate calculation...Wow. They were selling at 7 or so units a day and are now down to two a day and there is no sign that the curve is turning. It looks very much like the sale of condos by January will be in the vicinity of zero. (No I don't think that will really happen but it is going to get to a real low number)
This of course ignores the condo conversions which have pretty much reached zero already.
So why pray tell do the condos go to zero or a close approximation thereto? Don't jump on they can't get financing. They can and it ain't very hard. And this trend started in June when financing was not yet in trouble.
So what is happening? All the very low end buyers sitting on their hands waiting to get a house for a condo price?
The condos have very few foreclosures. Apparently the gullible did not jump in that direction. So no fire sales on REPO condos.
You just knew that independent research and projections consistent with and supported by the data - regardless of whether it helps or hurts us as agents - is the way to my heart, didn't you?
Bravo - and keep up the good work.
That said, media-induced fear (that something is reported in the press does not make it false - did you see me quoted in the Review-Journal the other day?) combined with your theory that buyers want to see if they can get a detached SFR is, in my opinion, a very likely explanation for the you've uncovered.
Also, despite your request that responders not address financing, I do believe that many of those uncertain of their creditworthiness have once again returned to the position of "I won't apply if I might be embarrassed by being turned down."
In the Vegas market everything has slowed way down...but things are actually acting stable...volume of SFRs has been the same for three months running and median price declines for SFRs is a fraction of a percent.
I have however a couple of light condo listings that have been just laying there. So I went off to look at what is happening to condos.
First I pulled out the conversions which do bad things to buyers and statistics. And I cut out those that sold over about $250 per SF...we have a reasonable big high rise market but they start at above $300 psf.
I plotted out median price and found some siginificant drop with stability the last months. Then I ran a rate calculation...Wow. They were selling at 7 or so units a day and are now down to two a day and there is no sign that the curve is turning. It looks very much like the sale of condos by January will be in the vicinity of zero. (No I don't think that will really happen but it is going to get to a real low number)
This of course ignores the condo conversions which have pretty much reached zero already.
So why pray tell do the condos go to zero or a close approximation thereto? Don't jump on they can't get financing. They can and it ain't very hard. And this trend started in June when financing was not yet in trouble.
So what is happening? All the very low end buyers sitting on their hands waiting to get a house for a condo price?
The condos have very few foreclosures. Apparently the gullible did not jump in that direction. So no fire sales on REPO condos.
Gosh, prices are too high perhaps???
Now I've heard it all. Media induced fear :rollseyes: and paranoia around feeling embarrassed about financing. These opinions are without real evidence and are just ways to help one feel better about a slowing market.
Gosh, prices are too high perhaps???
...These opinions are without real evidence and are just ways to help one feel better about a slowing market.
Without evidence? The original poster and the response are from experienced REALTORS. One of whom has looked at the statistics and crunched the numbers. Seems to me he HAS evidence and is looking for rational explanations and conclusions from other professionals.
On the other hand :rollseyes: some people just snipe without any real knowledge of the specific market being discussed and very little credibility as an industry professional. I submit for HERE that the comment came from someone with lots of posts and NO reputation. Make your own decision readers...who has credibility in this discussion?
Without evidence? The original poster and the response are from experienced REALTORS. One of whom has looked at the statistics and crunched the numbers. Seems to me he HAS evidence and is looking for rational explanations and conclusions from other professionals.
On the other hand :rollseyes: some people just snipe without any real knowledge of the specific market being discussed and very little credibility as an industry professional. I submit for HERE that the comment came from someone with lots of posts and NO reputation. Make your own decision readers...who has credibility in this discussion?
Yes, olecapt has certainly avoided taking snipes at folks, especially the posting about the subprime "bailout" proposed by Kremlin officials, suggesting that it's actually a GOOD thing, when so little of the public agree with that sentiment, except of course folks highly leveraged on RE.
Reputation points are best awarded to eternal optimists since that clique is prevalent here. One of the biggest loudmouths (who shall remain nameless) and personal attackers has a high reputation well into the hundreds.
The media is the messenger. Few share your view on the argument that they are inspiring a meltdown. Those who can't do, blame.
It was always my impression that in RE downturns condos and townhouses are far more susceptible to the weak market than SFH's in pretty much ANY market. For a variety of reasons;
1. There is no land value attached
2. They appeal more to a more transient demographic (young singles/couples, retirees) rather than families
3. They are highly represented among first time buyers who don't have "trade-up' money and are more susceptible to credit issues
4. They are more heavily represented among speculators and buyers of second homes and investment properties (rentals).
I would suggest that there are multiple reasons for the drop you are seeing. The biggest rise in inventory seen in the NE so far has been in condos and townhouses. The worst hit is the coast - full of speculators, second homes and investment properties. Many beach towns have up to 4 years of inventory as lots of new condo projects came online just as the market died.
1. There's a glut of condos.
2. They are overpriced. 250K? Come on now. That's more just in interest than I would pay in rent!
3. They tend to follow housing prices (lagging by 6 months to 1 year) and should drop and keep dropping until well after the housing market flattens out after it's nosedive.
So, yeah, price. It's not a smart time to buy unless someone drops the price very very aggressively.
1. There's a glut of condos.
2. They are overpriced. 250K? Come on now. That's more just in interest than I would pay in rent!
3. They tend to follow housing prices (lagging by 6 months to 1 year) and should drop and keep dropping until well after the housing market flattens out after it's nosedive.
So, yeah, price. It's not a smart time to buy unless someone drops the price very very aggressively.
Quit being such a "doom and gloomer" and get on board the bandwagon of blissful ignorance
1. There's a glut of condos.
2. They are overpriced. 250K? Come on now. That's more just in interest than I would pay in rent!
3. They tend to follow housing prices (lagging by 6 months to 1 year) and should drop and keep dropping until well after the housing market flattens out after it's nosedive.
So, yeah, price. It's not a smart time to buy unless someone drops the price very very aggressively.
What are you talking about? The median price of these condos is around 175K. They go down to below 100K. They are more than 30% under the SFRs.
As to AnthonyB's four. I am skeptical on 1. Not that it is not true...but that it has any particular bearing in the present situation. It is always true.
Two and three make sense. Though I am not sure why it should be a lot worse now. Much easier to qualify for a 150K condo than a 200K SFR.
Don't buy No. 4...at heast not in Vegas. We do not have a high percentage of speculative or secondary homes in our condos (except for the expensive ones on the strip which are excluded from this analysis). Mostly a first time buyer thing here. There was a heavy crunch of speculators in the condo conversions in 2005/2006...but they also are excluded from this analysis.
I guess I still think it comes down to a belief that by waiting for the "big drop" these folk hope to get an SFR rather than a condo.
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