 |
Whether purchasing or refinancing a home, we'll offer you sound and unbiased information.
Get national and regional topics like California's refinance market,
and calculators to evaluate your own mortgage.
|
According to data released by the Greater Las Vegas Association of Realtors, the median price of single family homes in Las Vegas fell 22.7% in April, from $305,000 in April 2007 to $235,875 in April 2008. Prices haven’t been this low since February 2004, when the median price was $220,000.
The foreclosures and falling prices in Las Vegas are not all bad:
A week-old study assessing housing affordability in Las Vegas is already well past its prime, local analysts say.
The 2008 Colorado College "State of the Rockies Report Card" found that just 18.9 percent of the Las Vegas Valley’s housing stock is attainable to workers earning the area’s median wage, which was $14.03 an hour in June, according to the Nevada Department of Employment, Training & Rehabilitation.
Affording a two-bedroom apartment at fair-market rents in Clark County required pay of at least $15.01 an hour, the report card added.
Those figures translated into a D+ for overall housing affordability in Clark County.
There’s just one hitch: The report card’s data hail from the first quarter of 2007. And given the swift blast of air hissing out of the Las Vegas Valley’s housing bubble, that makes the report card’s findings obsolete, experts say.
Jeremy Aguero, a principal in Applied Analysis, estimated the proportion of local homes affordable to median wage earners is likely closer to 36 percent, or about twice the share the Colorado College report card cited.
"Those numbers don’t comport with what our market looks like today," said Aguero, whose firm performs economic studies and research for businesses and governments. "To suggest that only 18 percent of our homes are available to local buyers is a dangerous, deceiving statistic."
Among Aguero’s quibbles with the study: It fails to consider the sheer volume of homes in foreclosure here. More than half the single-family homes sold locally in March were foreclosures or short sales, according to the Greater Las Vegas Association of Realtors. Those homes are selling at $120 to $125 per square foot — well below the $185 per square foot parts of the market averaged at its peak in 2005.
One Las Vegas couple has brought mortgage fraud to new heights: [Thanks L!]
U.S. Attorney for Nevada Gregory Brower says Eve Mazzarella, 30, and her husband, Steven Grimm, 45, were indicted Wednesday on bank fraud, money laundering and aiding and abetting charges.
Grimm was arrested Thursday in Las Vegas and is due to appear Friday in U.S. District Court in Las Vegas. Brower says Mazzarella is being sought.
If convicted, each could face decades in prison and millions of dollars in fines.
The government alleges Mazzarella and Grimm bought more than 200 properties at inflated values using limited liability companies and more than 400 straw buyers to make purchase offers.
The couple allegedly controlled transactions worth more than $100 million.
They allegedly defaulted on mortgage payments on many of the loans, causing at least 118 properties to be sold in foreclosure.
L asks:
Bernanke vows to help homeowners. Do these people qualify for help?
Wow- how bad does it have to be for this to happen? A major casino project on the Strip facing foreclosure:
[Hat tip to JW and to M!]
The developer of the $3 billion Cosmopolitan Resort & Casino says its lender, Deutsche Bank, filed a notice of foreclosure on the property for a construction loan of $760 million that just matured. Developer and owner Ian Bruce Eichner says in a statement that his company is working with Deutsche Bank and Merrill Lynch to find new investors. Eichner tells The Associated Press in the statement that, "This action by our lender comes as no surprise." He blames challenges in the real estate and capital markets for difficulty in raising capital for the project, which is now under construction.
This project is located right between the new City Center and the Ballagio- as good a location as one can get on the Strip. Their website describes this project:
The financial difficulties of the Cosmopolitan brings up some interesting questions- What will this mean for the City Center project, as well as others on the Strip? What does this mean for existing casinos?
Whatever the answer, it is likely that rounding up a new batch of investors won’t be easy. The credit crunch has made all kinds of financing more difficult to obtain, and projects like this require require a lot of financing, with a long lag time before any revenue is generated.
It was bound to happen sooner or later. Folks looking at empty houses in Las Vegas and deciding "Why pay rent?": [Hat tip to The Judge]
On New Year’s Eve, a middle-class neighborhood in southwest Las Vegas discovered new neighbors in foreclosed and formerly vacant homes.
James Totland, a nearby resident, said the new residents appeared to be squatters.
"It’s insane," Totland said. "It’s scary really."
Real estate saleswoman JoAnn’E Verry and broker Scott Hurlburt reached the same conclusion. The new residents were intruders who were trespassing, the real estate sales people said. They enlisted the help of Las Vegas police Thursday in evicting the squatters.
"This is something that is caused because houses are vacant," Hurlburt said.
The Greater Las Vegas Board of Realtors calculates that about 45 percent of the 22,005 single-family houses on the market are vacant as the area struggles to recover from a residential realty bust.
But squatters remain uncommon in the Las Vegas area, said Patty Kelly, president of the Realtors board.
"It’s really somewhat of a rare occurrence that comes up," Kelly said. More often, homeless people or people who were evicted break into homes, she said.
The Las Vegas housing market has a long way to fall, but at least home prices are drifting toward the range of sanity: [Thank you Judge!]
As the local housing market took off in 2004 and 2005, new construction led the way, with freshly built single-family homes surging toward a median price of $350,000. Local real estate research companies could find virtually no new single-family construction below $200,000 by 2005, said Dennis Smith, president of Home Builders Research.
Now, 25 new-home subdivisions in Southern Nevada are selling single-family houses with starting prices below $200,000, according to an analysis of reports from local tracking firms and sales numbers found on builders’ Web sites.
That’s as little as $110 per square foot in some communities. Compare that cost to expenses at the market’s apex in 2004 and 2005, when roughly $185 per square foot would have been the least-expensive price in the Las Vegas market, Smith said. [ That’s a drop of 41% folks- you can guess what that means for resellers]
While this represents a significant improvement in the Las Vegas market, the market has a ways to fall. This comment by the reporter, Jennifer Robinson, surprised me:
Today’s smattering of sub-$200,000 communities isn’t exactly a death blow to high housing prices in the Las Vegas Valley: With more than 500 actively selling new-home neighborhoods in the region, the majority of communities remain above the $200,000 mark.
Still, the lower prices mean a bit of relief for working-class Las Vegans who can’t afford the city’s $312,639 median new-home price.
Prices shouldn’t be in the $200,000 for working class Las Vegans, that’s where it needs to be for middle-class Las Vegans. In September 2006 In Business Las Vegas reported:
The National Association of Home Builders issued a report in the third quarter of 2006 indicating that only 14 percent of the homes in Clark County are affordable to households earning the median income (median household income approximately $53,000). Today, the median price of a resale home in Las Vegas is $278,000, more than five times the median income, while the median price of a new home is $326,750 (of all product types), or six times the median income.
So even with a 41% drop in the square foot price, here’s the problem:
Traditional lending guidelines suggest buyers should qualify for home loans at about three times their annual income. Therefore, assuming a down payment of 20 percent, the median income would be $21,133 short of qualifying for a $278,000 resale home.
For a working class family to purchase one of these homes then would require an "exotic" loan- they couldn’t qualify under traditional guidelines- and the foreclosure rate in Las Vegas tells us how well these wonky loans have worked out for people.
The disparity between the price of renting and buying is a huge incentive for people to rent. There is simply no financial incentive for the majority of Las Vegans to buy in the current market. Prices will have to fall significantly still before most sellers can qualify under traditional lending guidelines and Las Vegas is an affordable market again. That however, does not prevent local "perma-bull" Larry Murphy from once more declaring we are near a bottom:
We’ve heard time and again how prices would always go up in Las Vegas because of the short supply of land. Even though supply is glutted and demand has disappeared, apparently the BLM wants to sell land badly enough to sell below appraised value: [Hat tip Judge!]
The Bureau of Land Management is considering whether to abandon its policy of refusing to sell land for less than its appraised value.
Only one of 31 BLM parcels sold at the lackluster auction Nov. 1, which was the worst this decade by BLM standards.
The auction placed 167.5 acres up for grabs in Henderson, the southwest and other areas.
Only the sale of one 15-acre site at Pollack Drive and Welpman Avenue kept the auction from being a shutout.
Will a lack of interest cause the BLM to reconsider sales? Apparently not:
It is possible that at the BLM’s next auction, tentatively scheduled for April, it may for the first time, allow bidding to start below the appraised value.
Bidders would be required to meet the reserve price, which is the appraised value, Palma said, but the more open bidding process would give insights as to the level of interest in the federally owned land and its current market value.
That could ultimately lead to changes that would allow property to be sold for less than appraised value, he said.
It seems odd that the BLM was so anxious to sell land, when they claim they don’t need to and demand is so low:
Craig Cherney, director of Western operations of the Philadelphia-based American Land Fund, a private equity and land acquisition group, said it is not surprising that parcels didn’t sell at the auction in a market where prices continue to decline.
"There is no demand, and basically it is a supply and demand problem," Cherney said. "There is overhang in the private real estate market and until that is burned through, there is going to be little demand from public and private homebuilders."
Given the glut of land for sale at the moment, the BLM could consider another alternative- don’t dump any more on the market. If there is no demand, why sell it?
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:
I’ve got some things to catch up on this weekend, so I’ll be in and out. I couldn’t help but think, though, that this video, produced by a Las Vegas realtor, deserved a rebuttal:
