In Business Las Vegas said last week: [Hat tip Judge!]
Las Vegas housing analyst Dennis Smith says it may be 2004 all over again for the valley’s housing market.
No, he’s not saying home prices will rapidly appreciate as they did that year and in 2005.
Smith says it won’t be long before prices return to the levels of late 2004 when it comes to the existing home market.
We didn’t have long to wait.
The Greater Las Vegas Association of Realtors [GLVAR] has released their October numbers. Las Vegas, welcome back to 2004.
Prices
The median price for a single-family home in October was $274,725. This is the lowest the median price has been since May 2004 when the median price was at $266,000. Appreciation is down 4% month-to-month and down 11% year-over-year- the largest year-over-year decline we’ve seen since the market started declining:
This is not adjusted for inflation, and prices often include large incentives on the part of sellers, so this figure does not necessarily represent "same house" appreciation.
Sales
974 homes sold in Las Vegas in October, only a slight decrease from September’s 990. However, this is down 42.3% year-over-year from 1,689 in October 2006.
It’s getting tougher to borrow at the moment– the Wall Street Journal is reporting that even for prime loans, 40% of lenders are reporting tightening their standards in the past three months. Between tighter standards, falling prices and spooked buyers, the market is set to fall even further. Expect Las Vegas to make it’s way even further back in time.
The median price now be at 2004 values; however, prices will continue to drop as the housing inventory continues to swell … the bottom may be at 2002 price levels … which were affordable … and the prices will stay at the bottom for a very long time … perhaps as long as eight years … just to get back to where values are today … at 2004 values … assuming that there is no long term economic recession.
Anybody else watching House Hunters Vegas this week? I just keep shaking my head & wondering if I’m looking at a future foreclosure in process.
Personally, while this isn’t something I’m bragging about, if I bought with 0 down & my home dropped 10%+ in value, I’d dump it on the bank.
That’s why I won’t listen to any GDP growth stories for next year. You can’t make me believe all those future FC won’t have a real impact on our economy.
A recession may be on the horizon.
I often wonder if that is what is needed (yes I said needed) to get sellers and/or their agents to lower their asking prices to a realistic figure.
It’s only down to the 2004 numbers?! I thought maybe we’ve hit the 90’s. I guess I’ll wait a little longer before I pick up another rental.
BTW, my anti-spam word to post this comment is “plummet”–now that’s applicable!
Vist “Overcoming Real Estate Losses” at http://WhineCountryRealEstate.blogspot.com/
Hooray, my non las Vegas house was bought in 2004! From here on out I can kiss my hard earned equity goodbye (as opposed to the passive equity from appreciation).
The scary part is not the median price, it’s the number of houses sold. Even at the lower median price, they only managed to sell less than 30 percent as many houses as in 2004.
But how far down can they go before a crippled dollar and general inflation take them sky high again? At this point I would be buying while deals and mortgages at low interest rates can be had (*can* mortgages still be had?)
>>At this point I would be buying while deals >>and mortgages at low interest rates can be >>had
Who is to say to interest rates can’t go lower? Wall Street is already factoring in another 1/4 point drop in early December, and there’s lots of that below.
Some say that Bernanke will lower rates back to 1% if he has to, or even the 0%-level that Japan enjoyed for so many years.
Who knows? I’ve long since stopped trying to use “logic” when it comes to these people’s decisions; they certainly don’t!
BTW even if rates went as low as 1% again, or even 0%, it wouldn’t help the housing market - history shows it had no effect on housing in Japan, for example.
MikeC-
I’m not real worried about all these “deals” going anywhere. If we were to have a rise in interest rates, [Which looks as likely as Yun admitting that housing has a long way to fall at this point.]housing prices would have to fall further to compensate- otherwise no one is buying.
I’m not only on the sidelines, I’m sitting here with a few good books, my Ipod, and a big bag of Cheetos. I’ll be sitting here awhile.
Tc said “But how far down can they go before a crippled dollar and general inflation take them sky high again? At this point I would be buying while deals and mortgages at low interest rates can be had (*can* mortgages still be had?)”
Tc, you shouldn’t believe all that the MSM and Benny & the Feds tell you (-;
1. “general inflation” (currently running at well over 10 % if measured like it was measured before Bush, Clinton, Bush et al started tweaking the measures for political reasons) is already pulling the housing affordability carpet from under potential buyers’ feet
2. Why would a lower USD (versus commodities, gold, etc.) automatically spark price rises in a (real estate) market that is suffering from a both a severe and chronic oversupply and financial demand constraints, especially given 1. ?
Tc … mortgages “still can be had” … but not by everyone … because income, assets and obligations must be documented now in most cases … what a novel approach.
AE … 3. Housing affordalbility vs multiples of income. How much has the cost of housing risen since 1999? vs How much has income risen?
There would have been no housing bubble if not for the so-called “loose lending programs” … which are undermining our economy at this time.