Down remains the operative word in Las Vegas as it hits two new records. One is that with only 990 single family homes sold, this is the first time in many years that sales have fallen below the 1000 mark. The 43% drop in sales year-over-year is the largest year-over-year decline since the Las Vegas housing market started it’s decline: [Data from GLVAR: Former baseline for this graph was at 1200- I had to adjust it.]
The other record broken was for the largest year-over-year price drop seen since real estate started its decline in Las Vegas. The median price dropped from $310,000 in September 2006 to $285,750 in September 2007 for an 8% decline. This is not adjusted for inflation, and does not reflect many significant incentives offered by sellers, the actual drop should be lower. In addition, different areas of the Las Vegas metro are faring better than others- while some neighborhoods are faring better, many newer neighborhoods farther from the city center are faring much worse.
While listings have remained fairly constant over the past few months, they are up 16% over last year. The September inventory was at 24,218. The dropping sales has resulted in an increased "Month’s supply." There is now a 24.5 month’s supply of homes on the market- that’s two years worth folks.
Why should those who live outside of Las Vegas care what happens to this city?
Tumbling home prices in Las Vegas will show how far and fast U.S. property values will fall in 2008 as the housing decline enters its third year, said William Wheaton, an economics professor at the Massachusetts Institute of Technology.
“Las Vegas is an important barometer for where the rest of the nation’s home prices are going because it’s going to show us how quickly the investors head for the doors,” Wheaton said. “It will put the floor under the housing correction.”
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From the article: Edward Leamer, an economist at UCLA, predicts a 20 percent slide in prices in Nevada, California and Florida over the next three or four years.
Gotta love those REIC-sponsored spinmeisters at UCLA. (Why aren’t more people calling them out on this?)
Down at least 8% already (C-S showed 6.5% as of August, not Sept., and that doesn’t account for incentives or discounted new building leading resale prices) and they’re calling 20% total in 3-4 more years? Classic.
Got this in an NAR email today. Thought it was… ummm… amusing.
Rather than using even negative percentages to prove something is “great,” wouldn’t it just be easier to say:
“There is NO great place to buy a house right now. We recommend that you exercise that long forgotten American discipline of “delayed gratification” and multiply your “home ownership satisfaction” with a celebratory dinner and the thousands and thousands of dollars you’ll save by waiting a little bit.
Not to mention the added eventual benefit of living in a neighborhood not smothering in debt.”
Of course, that would just be… cRaZy!
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10 Cities Where It’s a Great Time to Buy
The real estate business may be facing a softening in sales, but there are parts of the country where it makes sense to buy now.
Forbes magazine examined current home sales patterns and sales projects in the countrys 40 largest real estate markets to identify these attractive markets.
Based on models that estimated 2008 housing inventory, sales rates, and turnover, the magazine compiled a list of markets that are experiencing price declines, but where buying looks attractive because there is likely to be an increase in sales in the near future.
Here are Forbes and Moodys 10 most attractive markets, along with the median homes sales price and their price change from 2006.
Fort Worth, Texas: $156,500, 1.7 percent
Kansas City, Mo.: $157,700, -0.7 percent
Houston: $154,900, 1.4 percent
Cleveland: $128,700, -7.1 percent
Denver: $255,200, none
Long Island, N.Y.: $482,300, 1.7 percent
Washington, D.C.: $445,300, 0.3 percent
Orlando, Fla.: $265,100, -2.4 percent
Phoenix: $264,800, -2.7 percent
Las Vegas: $307,900, -3.6 percent
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And a personal comment, just to stay relative to the thread:
Vegas as “great” and “attractive” right now!?!?!??!
BBBWAHAAHAHAHAHAHAHA
Twist,
I’m pretty sure that floor of 800 isn’t going to last through the winter.
AssetHunter,
Holy Moley! How can NAR keep a straight face while pumping that $^#%? I’d be embarassed.
& it brings up a great question a REAL reporter/journalist should ask a NAR shill in their next report. When exactly is it NOT a good time to buy? I wonder what they would say…
DianaK -
It’s only my opinion, but here is how I’d answer the question: “When exactly is it NOT a good time to buy?”
I would say:
It’s always a great time to buy…
– at 2.5 x yearly income as a residence
– at 100 -120 x monthly rent as an investment rental
– at 60 – 70% of what I can ACTUALLY sell it for today as a “trade propety”
(not a rehab or fix and flip, but normal buy & sell trading)
Anything higher than that, and it is NOT a good time to buy that particular property.
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Heck, I might even buy a house in Vegas today at those numbers.
Naaaahhhhh. The pendulum has been pulled so far over to one side, that I’ll just wait until it swings the other way past “center.”
(Center being represented by the above factors & percentages)
Again… just my opinion.
it doesn’t help when you have people like this
“Joy Gillen, 60, a casino supervisor, has had her home on the market for nearly a year and a half. She initially listed the home at $597,000 then $539,900 and since refused to budge, even though she paid only $291,000 for it five years ago.”
from http://news.yahoo.com/s/nm/20071008/lf_nm/usa_housing_vegas_dc_3
Question about Vegas real estate:
My wife and I are looking for investment property. Ideally in the West somewhere as we live in SoCal. Now obviously I’m not going to “catch a falling knife”. I’m in no hurry to buy and will only do so when I feel the time is right, and that time is not yet.
Anyway, for Vegas real-estate I only hear about single family homes and residential condos. How are the condos doing near the strip, and the big new developments? I see the MGM residences are almost sold out, but it’s hard to get real data… it’s all just spin.
I’d love to be able to pick up a place near the strip that I can rent out most of the year and stay at once in a while. Any thoughts here?
carlivar,
are you being funny? you read this post & want to know if you can get a good LV condo at investment price, so your rent = mortgage payment & would stay rented out most of the year?
Fishing,
I think she must’ve refied. “I could sell for a cheaper price, but I would shoot myself (financially).”
an even better statement: “Another owner on the street moved back to his native Singapore because he thought his children could get a better education there, his broker, Betty Chan, said.” :0
Asset Hunter, that’s a classic – 5 of their so-called top 10 most attractive markets are already negative YOY!
What’s even better is that they say “there are parts of the country where it makes sense to buy now.” This is basically half a step away from coming right out and saying that it does NOT make sense to buy unless you’re in one of those rare/unusual places… Now if they would just take that last half a step to the truth, and stick with it for ten years or so, they might regain a smidgen of credibility instead of being regarded as slimier and less trustworthy than used car salesmen.
Carlivar-
If the MGM residences are nearly sold out- I’ll eat my hat.
There is a huge glut of properties on or near the Strip- with even more coming on by the minute. Projects like City Center insure that this market will remain glutted for some time to come.
The good investments in LV are few and far between at the moment- I would be extremely careful.
JimAtLaw ~
Makes ya’ wonder why they don’t just say: “Here are 5 places that would be great places to buy now”
It’s like they had to come up with 10, just to have 10.
Kind of a forced compliment along the lines of:
“Wow! You don’t sweat much for a fat girl!”
Better if they’d just kept it to 5, and said the other cities had a “great personality!”
Twist, I got ya beat. Hot of the press: Central Florida (Orlando) sales down 37% from August and 55% year over year! Sales absorption rate jumped from 1.7 years to 2.5 years of inventory. Pending home sales down too. Other Florida areas are just now reporting but should be similar. As we discussed about a week ago this will be in the local headlines tomorrow. National numbers from NAR will be in about 2 weeks. Can’t wait for NAR’s spin.
Tobby-
I think the NAR is going to have to go with This must be the bottom, because how much worse can it get? Better buy now, before they’re all gone.
Asset Hunter-
Five would be stretching it. Houston, while not seeing a huge run up in prices, has had an awful lot of building activity. Builders are being aggressive to move inventory, and that hurts resellers. There are a lot of foreclosures in the Houston area now as well.
At least the rent/mortgage ratio is much better in Houston, which helps for investing. Anyone who just runs and buys a property with reckless abandon because it’s on some list could join the thousands now suffering from “Flipper’s Remorse.”
Yes, to clarify, I am fine waiting YEARS. I am just curious…