Facebook
Fark
Digg
Reddit
Stumble
Tuesday, July 28, 2009 | 8:49 a.m.
Home prices continued to fall through May in the Las Vegas area, a closely watched national report showed today.
Las Vegas was among a few exceptions in Standard & Poor's monthly housing report, which overall showed the first monthly increase in three years in home prices in 20 big cities tracked in the report.
The S&P/Case-Shiller Home Price Indices showed prices in Las Vegas fell 2.6 percent from April to May, an improvement from the 3.5 percent decline posted from March to April. Las Vegas-area prices in May were down 32 percent from May 2008.
Las Vegas home prices as tracked in the report have declined since August 2006.
The S&P/Case-Shiller report found prices rose or were unchanged from April to May in 15 of the cities in its composite index.
Of the five cities with falling prices, Las Vegas had the steepest monthly decline.
Overall, the composite price index increased .5 percent from April to May, but the 20 cities overall showed a year-over-year decline in home prices of 17.1 percent.
"The pace of descent in home price values appears to be slowing," David Blitzer, chairman of the Index Committee at Standard & Poor’s, said in a statement. "There is a clear inflection point in the year-over-year data, due to four consecutive months of improved rates of return, after the steep decline that began in the fall of 2005.''
"To put it in perspective, these are the first time we have seen broad increases in home prices in 34 months. This could be an indication that home price declines are finally stabilizing.
"While many indicators are showing signs of life in the U.S. housing market, we should remember that on a year-over-year basis home prices are still down about 17 percent on average across all metro areas, so we likely do have a way to go before we see sustained home price appreciation." Blitzer said.
The numbers for Las Vegas were not surprising.
The Greater Las Vegas Association of Realtors reported prices held steady in June from May, with a median price of $140,000.
But home foreclosure filings accelerated in Las Vegas and Nevada in June, further pressuring home prices downward, according to foreclosure-tracking firm RealtyTrac of Irvine, Calif.
Earlier this month RealtyTrac reported total foreclosure filings, including notices of default and notices of intent to auction, totaled 18,764 in Nevada in June. That was up 9.37 percent from May.
Economists say the foreclosure problem in Nevada, which started with a high rate of defaults on unaffordable subprime mortgage loans, has continued due to high unemployment in the state. That rate jumped from 10.6 percent in April to 11.3 percent in May.
It will take some time; I am thinking at least 5 years, to stabilize the real estate market as Vegas had 5+ years of spectacular growth in price and number of units.
Best way to stabilize the market is to eliminate the mortgage interest deduction. Instead of artificially increasing demand, this will allow people to make a better decision between renting and buying.
Renting is not a bad thing!
where's the quote from bottfeld saying "we've hit bottom."?
Bad idea to eliminate the mortgage interest deduction. I like that extra tax return and usually use it to make some kind of home improvement, so it goes right back into the economy.
the bigger the bubble, the bigger the pop
I like the idea of removing artificial demand by removing mortgage interest deduction. Stop ENCOURAGING people to have debt. People should be motivated to pay off those mortgages instead of hang on to them for tax deductions.
as long as tourism is down, this town will stay down.
that's where the money comes from.
everything from the guy that sells stripper shoes on sahara to the wal-mart on rainbow to the waitress making tips at the peppermill.
it all comes from tourism.
Are you kidding? Go put a bid on a home right now that costs 200k-350. They are getting 14-20 offers on every home in town and the prices are going up. Don't believe the hype. I have looked at buying houses and they are not as cheap as people say. If you go look at houses in nice areas they are not as easy to get. These articles are behind by 3 months of what is really going on.
this article isn't about homes being SOLD, it's about the PRICE of those homes.
and ya...if you're putting a $250,000 offer in on a home that comps for $300,000...you aren't getting that house.
As this story states near the bottom, GLVAR and other local sources show LV home prices are also stabilizing, at least in the past two months or so. Meanwhile, inventory is declining and a record number of existing homes were sold here in June.
As other comments here suggest, demand for homes is high. Buyers are facing multiple offers on most moderately priced homes in Las Vegas.
Future versions of this S&P report will likely reflect this shift here in Southern Nevada.
by vc
Instead of the mortgage deduction, the tax rate could drop and there would be your money to do home improvements.
Note if you have no mortgage interest, you still get the standard deduction ($10,900 for married/ $5,450 for single) without paying any interest. Currently, the only money you save on your taxes is the difference between the standard deduction and the amount of your mortgage interest times your tax rate.
Wait until Spetember RYPHI to buy. This temporary demand is fueled by the limited $8,000 tax credit and people trying to move in good school districts before school starts. In addition, a lot of foreclosed inventory will start to hit the market. Prices are going to drop to pre-2001 levels.
Taking away the deduction on mortgage interest payments would be like treating starvation by getting rid of all food for everyone. If renting your home isn't a bad thing as someone alleges, well then neither is owning a home. Lets not punish the people that are actually making payments and give them incentive to stop paying.
The Vegas real estate market is a long way from recovering, if for no other reason that it is so imbalanced from what a housing market needs to be. For every house getting dozens of bids, there are dozens of houses getting no bids.
One of the fundamental problems is that there is now a negative stigma associated with homes that are NOT foreclosures. It is supposed to be the other way around. Many people now believe that the only good deals are on foreclosed homes. If you try to sell a home that you own and you live in and you are current on your payments, most buyers don't want to see it, as you are seemingly not desperate enough to sell it at rock-bottom prices. Nearly all action is on bank-owned homes. As long as this is the case, this market will not recover.
The other issue which is important to sustainable recovery is to know who exactly is buying these homes. If there are too many investors who will never live in these homes, then we are not recovering, but rather reinforcing the vicious cycle with an imbalance of supply-and-demand forces.
Lastly, there are so many homes that are so far under water that there are still many many many homes that owners will walk away from here in the valley. We are a long way from stopping the handoff of homes to banks. There is realistically no way to stop this. You can't ask the banks to write down the value of nearly every home in Las Vegas, it would cause their balance sheets to render the companies worthless. You can't ask the government to suck up the difference, as this would require over a trillion dollars on a national scale. Instead, the banks will attempt to manage this bleeding over a long period of time, but the bleeding must still occur one way or another.
If you believe that there are more homes that will be dumped than there are investors looking for cheap deals, then supply will exceed demand and downward pricing pressure will continue for years.
All good points. At the end of the day, it starts and stops with the fact that there is too much inventory. Las Vegas is insanely over-developed. Our housing market is going to take longer to recover (pricing wise, not sales wise) because our wonderful commissioners allowed the developers to over-saturate the market in anticipation of new residents that never came.
Supply and Demand principle. Too much supply to meet the demand. And it's only going to get worse. All the people that bought in 2006 and have a standard 3 yr. arm are going to short-sale or foreclose through 2010, pouring even more salt on the wound.
Home sales should continue to rise, however I don't see the pricing going anywhere for a long time.
Any house that isn't in forclosure in Vegas is likely underwater. The forclosure resets prices to what they should be, not the inflated price the previous buyer paid.
So Nightmare is correct.
""Any house that isn't in foreclosure in Vegas is likely underwater. The foreclosure resets prices to what they should be, not the inflated price the previous buyer paid.
So Nightmare is correct.""
This is not true. Only those houses that were bought and sold in the last couple of years or so, since the prices started to skyrocket, may be underwater. Many houses bought, say 10 years or so and longer have smaller mortgages unless they got a home equity loan. Those of us that still have their original mortgages and no home equity loan, are just fine. I did n't borrow to buy a boat or a car with the mortgage. House values are still way above what they were 10-15 years ago. There are a lot of us out there.
nightmare, a perfect user name for someone writing those comments.
If you take away mortgage interest deductions, housing market demand will go down and get worse. This deduction is what attracting home buyers compared to renting so if you take the incentive away, get ready for more unsold houses.
A little off topic here, but have any of you been to the strip on a Saturday lately? I hardly go down there but was down there last Saturday. I was expecting a dismal amount of people but found something very different. If we can't live on the revenue generated by that crowded piece of crap, then something is wrong. I could hardly get around down there and it took forever. Also, I was returning from California on 4th of July weekend and traffic going to CA was so busy that it was stopped on southbound 15. Were all of these people in Vegas? I think most of them were. I find it hard to believe that Vegas was so out of hand in the "good" times that we can't survive on what I have seen lately. Is this bothering anyone else?
Ditto trailspast,
There are a lot of us that have not sold our homes or touched our equity in the last 10 years. I've been in my home since 98 and still have the original mortgage. I haven't touched the equity or borrowed any money from my home.
i am trying to modified with indymac they wanted my last 2 check stub and last 2 year of income tax ishould find out in 30 to 60 days if it nay or yay
The casinos may be getting a lot of traffic but that will not translate into another boom in housing prices. I was frustrated by the fact that they can pour billions into casino projects and neglect the surrounding community, but I got over it...
Real estate will be a total nightmare in Las Vegas regardless of how well the casinos are doing. And go on the county website to see that all recent sales are 50% off of the 2005-2007 boom prices, multiple bidders or not, that is the actual sales price there... free on the internet to find.
henderson,
The S&P Case-Shiller Index is easily accessed on line. In June 2001, the Vegas index stood at 109.76. It peaked at 234.78 in August 2006. As of May 2009, the Vegas index has dropped back to 109.49. I'll let you work out the percentage gain and loss through this part of the cycle.
Realtors will continue to treat buyers like fools, and try to profit for themselves on any good buys. That's why nobody likes them, they act like vultures in the biggest industry in the US. Don't believe their hype about multiple bids and a "rebound". The multiple bids are on a million dollar home listed at 250K. If you want to see the truth, find a realtor and a piece of garbage house, the realtor will say what a wonderful place it is but not tell you that you can find much better.
Ditto Barney Fife,
Try OpenWeb InfoMapper... and get ready to laugh at your neighbor.
Its not like there are 10k buyers out there jockeying for the chance to get one of 500 homes. It is 500 buyers putting in offers on 50 different homes and hoping to snag one. That is why they all have multiple offers.
going through history after the GREAT DEPRESSION of the 30's there was a severe recession in 1937...
expect the same to happen again..
if you really read into it and how it happened it must happen again..
what happens when the government money has to be repaid and recouped? This is a 15-20 year cycle from top-bottom- same as previous top... will take at least 15 years more like 20, the reason being we are at least 5 years from bottom...
Yes guys quote me on that.. I will stand by that prediction..
realtors will continue to treat buyers like fools?
huh?
uhhh...
no.
if a house is $500,000 and you put in an offer of $400,000 and someone else puts in an offer of $499,999...you aren't getting that house.
all you anti-realtor types think there is some big conspiracy going on between realtors and the banks, but there are very few GOOD foreclosures out there in good shape, in nice areas, that you WILL get multiple offers on them.
The reality is Las Vegas home prices were so overinflated from the rest of the country,it will be a while before home price declines stop.Other areas of the country are seeing some sort of recovery,small as it may be because the "surplus" of homes were not there. Vegas has an enormous amount of homes to sell before building anything NEW can happen. One way to look at this,if Vegas could uproot every unsold new home and spread them across the country...we wouldn't have a homeless problem in this country.
Vegas new home (unsold) inventory is the largest in the country.
The economy will bounce back. Government spending created many jobs in the Great Depression, Hoover Dam for example. Some paint that as socialism, others as a wise public investment -- found a cool site; Balkingpoints ; incredible satellite view of earth
So, what can I get for $200K these days in Las Vegas?
NE1 KNOA?
Barney,
Thank you for all the figures, however I was actually responding to bigstacks claim that any house not in foreclosure is likely under water.
My house is still worth a hell of a lot more than what I paid for it in 1998.
$200K in my neighborhood in the 89129 zip will get you a 1900 sq. ft home with a built in pool that's in very nice shape. If you go further out to the Centennial Hills area, NLV or SW, you'll get more than that.
IMHO, they're creating bidding wars by pricing homes even under the median prices for a particular area, then, whether or not there actually ARE other bids, saying "oops, more bids came in, you need to bid higher". That happened with us on the first home we bid on, and we refused to be baited. That home is still unsold. Seems the bank wanted to up the amount they would get for that short sale. Short sales are brutal!
True story:
Bought my house in Henderson in 1997. Know what my cocky real estate agent said to me. "It's all about the money" Didn't want to help us find the best deal, didn't use him to sell 7 yrs. later.Look at the fallout between realtors and developers when there was bidding wars going on. Still taking them time to recover from that. Whatever happened to people that actually produce something ie work with their hands instead of the poker playing-hold -em attitude of these carpetbaggers. Las Vegas isn't overbuilt it's overscammed!!
GOINGBUST....your $200k will get you a real nice place these days.I can't believe you're even asking this question.
yes, what HORRIBLE morals for that realtor to actually tell you the reason he gets out of bed in the morning...to make money.
i guess when the palms makes money, their hip and cool, but when a realtor makes money...they're evil.
do you know a realtor with morals, if so, please let me know
hating realtors = jealousy + bumpkin.
To think that they would be selling knowing that there was a bust around the corner, I don't think so. Even trained economists did not foresee the real estate bust - although they should have.
What if realtors got the same fee for selling any priced house? Is there twice as much paperwork and legwork to sell a 400K house as opposed to a 200K house? That might translate slowly to realtors doing the paperwork, etc. and less of "oh you'll love this place, (which I have the listing on), [it's a totally overpriced dump beyond repair], and the sellers are willing to negotiate."
And realtors should take an oath that they can only buy real estate from another realtor... of whom they have no affiliation with... and we will be able to track that information publicly... for potential future legal considerations.
I mean if you got into the profession because you love selling houses, why wouldn't you embrace a few adjustments for the better good...
Also, realtors cannot represent sellers (or buyers)... just there to offer advice and take care of the transaction... like a car salesperson... only more respected.