Hats off to you for quitting smoking!

I can’t argue with your point – Ultimately a house is worth what someone will pay for it.
However, I take a different approach.
I look at the 4% trendline based on what the house sold for new and the current Y-O-Y 4% increase in price. A house is worth what “I” say it is worth, not anyone else, especially the sheeple.

-leggo

Oh I figure it will be hurting for awhile. I just thought there might be a slight MOM increase in honor of it being June.

Didn’t happen.

Once more, the Las Vegas single family market has managed to underperform my expectations.

Not mine. Vegas still has a long way to fall.

With the subprime fire hose feeding suicide loans to underqualified buyers shut off now, there can’t be any movement upward in sales until prices revert to the mean, about another 25% down from where they are now.

Yikes! If you are selling a house – that’s it – the graph is proof that the busiest time of the year for sales is now over (Are you sure you want to keep sitting on your on that ridiculous asking price?)

Keeping in mind again, the bloated (nay, *Obese*) inventory… how long will it be before real esate agents realize it is better to make SOME (any) money by convincing owners to sell at reasonable prices, than to make *NO* money by trying to resist the lowering of prices….greedily not willing to give up the commissions they were getting in 2005???

The real estate investors’ and professionals’ own greed is what is doing them in…

You make a great point. Market is what people will actually pay. I love those ads that say “Going for 20% below market,” or some such. As soon as someone pays that price, market changes.

That said, I watch the prices in my neighborhood, and I see the disconnect between asking and selling. I’ve watched some homes in my neighborhood drop over $200K- and I knew they’d have to do it, as their house wasn’t worth what they were asking. It’s tough to sell a house for that much over the comps.

Who says what a house is worth? Ultimately a house is worth what someone will pay for it. If i had to sell my house today it would be worth substantially less than if I could take time to find a buyer.

There are deals to be had, and homes you wouldn’t touch with a 10 ft pole. In our neighborhood the homes are 1550, 1800, 2000, and 2400 sf. At the peak of the market, the largest homes were selling for $450-$480k. They are on decent lots (8000sf), had a 3 car garage, nice. They sold for substantially more than the 1800 and 2000 sf models (325-350). A friend just bought a bank owned repo of the largest for $330k.

The recent MBA study that showed 2006 originations to be heavily subprime-based also points to another part of the problem. The subprime loans that brought in a new wave of new home buyers just aren’t available any more. 2006 was the last gasp of the lending industry to prop up unsustainable lending activity – which in turn was the last gasp of sustaining unsustainable home prices.

I suspect there is alot of “the above” going on in Las Vegas. People who want to move up, but cannot and will not unless they can get an inflated price for their current house. With the market in the outhouse, these people just sit and wait – and will not lower their price.

This is what is keeping the the Vegas market level in a declining market. Eventually, prices will fall. But Vegas will trend 2-3 years behind CA and FL.

-Leggo

No question there’s still a lot of stickiness in "same house" appreciation as well, just less than the median.  Hat tip to the Judge is forwarded this letter to the editor in the Review Journal:

A recent article from an economist said that real estate agents were selling homes that just a few years ago would have been lucky to fetch $175,000, but now the sellers were asking $330,500. Some of those homes had ratty carpets, poorly laid out interiors and needed to be painted and fixed up — but still the sellers were asking those inflated prices. I believe that if these builders and real estate agents sold the houses for their actual real value — most under the $200,000 mark — it would bring the builder and agent more profits than pushing the home price to unrealistic extremes.

Like many other people, I would have bought a house a few years ago if the sellers and real estate agents lived in reality and priced accordingly. When they try to sell a home that should be in the $150,000 to $175,000 range for an inflated sales price of $330,000, they deserve to have that house rot on its foundation unless, like P.T. Barnum, they get that sucker on the hook.

So, builders, contractors, real estate agents and home owners: If you want to sell this bloated housing inventory, redo the bottom line and make a few thousand dollars profit rather than tens of thousands on one sale.

Buyers need a reason to get off the fence in LV, and so far they aren’t seeing it.

I think “same house” prices are less sticky than the median- the folks who are selling are the ones that are willing or able to be more flexible. The median though, isn’t moving very fast.