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twitterTHE ECONOMY:
Reports: Home prices to continue slide through next year
Ulf Buchholz / File photo
Two homes are shown for sale earlier this year in the southern Las Vegas Valley. Two reports this week indicate the supply of homes on the market will translate into lower home prices into next year.
Thursday, Oct. 22, 2009 | 1:18 p.m.
Las Vegas-area home prices are likely to fall further as local foreclosure activity shows no sign of slowing down, two reports said this week.
The Wall Street Journal today reported on its quarterly survey of housing-market data in Las Vegas and 27 other major areas.
The report found sharp declines in the number of homes listed for sale around the nation as government programs tried to help delinquent mortgage borrowers keep their homes.
"That campaign has gummed up the foreclosure process, slowing the flow of houses into bank ownership -- but only temporarily," the Journal reported.
Despite the limited inventory, "the potential supply of homes is far larger because banks are likely to acquire significant numbers of foreclosed homes in some areas, notably Las Vegas, Atlanta, Detroit, Phoenix, Miami and other parts of Florida, and Sacramento, Calif., over the next few years," the Journal reported.
Quoting numbers from LPS Applied Analytics in Denver, the Journal said 22.6 percent of first-lien home mortgages are 30 days overdue or in foreclosure in the Las Vegas area. Among the metro areas covered, only Miami-Fort Lauderdale and Orlando were higher with 26.6 percent and 23.3 percent, respectively, of such loans overdue.
The national average is 12.4 percent, up from 5.2 percent at the end of 2006, the Journal said.
And the Journal reported that Mark Zandi, chief economist at Moody's Economy.com, predicts prices in Las Vegas and other hard-hit metro areas will continue to fall. Moody's Economy.com forecasts Las Vegas prices in the second quarter of 2010 will be down about 24 percent from the second quarter of 2009.
Also this week, data analysis firm Fiserv of Brookfield, Wis., projected Las Vegas-area home prices would fall another 23.9 percent from June's level to June 2010 -- and after that continue falling another 4.3 percent through June 2011.
Fiserv, too, noted the large number of foreclosures expected to enter the market.
The national median home price is predicted to drop 11.3 percent by the end of June, but then rise 3.6 percent through June 2011 Fiserv said.
The projected declines in Las Vegas would be on top of a 38 percent decline in the median price of Las Vegas homes, to $140,000, from June 2008 to June 2009. That was reported by the Greater Las Vegas Association of Realtors.
The Las Vegas median price for new homes and resales peaked at about $313,000 in October 2006.
The Las Vegas mortgage delinquency numbers reported today by the Wall Street Journal are consistent with an Oct. 15 report from RealtyTrac, which found Nevada continued to lead the nation in foreclosure filings in both the third quarter and in September.
With unemployment running at 13.3 percent in Nevada in September, 18,766 foreclosure filings were reported in the state that month. These include default notices, scheduled auctions and bank repossessions.
The number of Nevada filings increased 4.8 percent from August and was up 44 percent from September 2008, RealtyTrac said.
The reports this week follow release of the September existing-home sales statistics from the Greater Las Vegas Association of Realtors.
The Las Vegas Realtors reported:
--The median price of single-family homes sold in the Las Vegas area in September was $138,000, up 1.8 percent from $135,500 in August; but down 29.2 percent from $195,000 one year ago.
--For condos and townhomes, the median price decreased 0.9 percent from $66,288 in August to $65,720 in September. That’s down 45 percent from $119,450 one year ago.
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I wanted to put this comment in, again, only because I hope no one will get swindled (again) as housing prices continue to decline and this Real Estate Mess gets worse.
First:
"...With unemployment running at 13.3 percent in Nevada in September, 18,766 foreclosure filings were reported in the state that month...."
BUT, THERE ARE *ONLY* ABOUT 3,000-4,000 REO's ON THE MARKET. THAT MEANS THE BANKS ARE HOARDING INVENTORY TO JACK UP THEIR PRICES, AND THEIR "DESIGNATED BROKERS" ARE GOING ALONG WITH IT.
What are our Nevada State Officials DOING about this...? Where's the Esteemed REAL ESTATE DIVISION on all this apparent collusion? Brokers have a DUTY to give fair and COMPLETE information to their clients, not LIE, or collude TO JACK UP PRICES because the want the juicy COMMISSIONS.
Second:
What's even funnier (sadly) is all these "investors" (suckers) who are shelling out $500 - $1000 Buck$ to go to these "Make Big Bucks In Real Estate" seminars, plus gobblin' up all the books, tapes, DVD's, e-books, white papers, and get-rich-with-real-estate-in-30-days-or-less plans they can get their hands on.
TRUE STORY:
One particular Real Estate Guru I PERSONALLY called, wanted $4000.00 Buck$ UP FRONT for just a "Half-day guided bus tour of Clark County properties guaranteed to make me money." (That IS NOT a misprint, $4000.00 WAS the price.) "These gems were just ripe for the pickin', and only WE know where they are," I was told by this sharpie with an out of state telephone number.
--
What kind of dolts fall for this....???
The only people making any money off of all this waste-your-time-trash are the ones who are peddling this garbage.
PLUS a LOT of these Guru Shysters LIVE OFFSHORE.
(If ya' go ahead and BUY this B.S., "investor" (sucker), see if you can go ahead and try and sue 'em to get your wallet and shirt back...outta be a GOOD LESSON for ya'.)
__
If ya' think your Nevada Licensed Real Estate Broker is swindlin' ya' in collusion with the Banks OR other "REAL ESTATE GURUS",
CALL THE NEVADA REAL ESTATE COMMISSION: (702)486-4033
Ask for the Investigations Department.
They will be happy (as paid State Employees), to help.
this is "news'?
it should be called "olds".
just wait until the constructions is done on city center and all those construction workers leave town. the rental houses they leave vacant won't be re-filled.
Yeah, things don't add up at all. How could we have so many foreclosures, empty houses, short sales, etc when everyone I know looking to purchase a home is outbid 10 times on 10 different houses until they finally get one? Why does it take MONTHS to purchase a home here when SO MANY are vacant? Sounds fishy!
i live in los angeles...
i've made some offers but always get outbid.
i no longer go to vegas to look for houses to
bid on....
something's fishy.
I bought 2 2 bdrm condos for $29,950 & 2 2 bdrm condos for $24,500 and all are rented out except the one my homeless veterans I'm helping out get to stay in. I want to buy two more condos @ $19,950, come on babies drop in price!!!!
A correction on the wizard's post.
When you are dealing with a broker that represents the banks and lists their REO's you are NOT the client of these brokers, the banks are their clients and it's the brokers legal duty to sell the banks properties for as much as they can, you are the customer, not a client! Don't expect such a broker to be looking out for you when they work for the banks!
If you want someone to look out for your interests, find a buyers broker who will work for you and not the bank.
I do feel that their is some real opportunities in the LV real estate market, you've just got to look for them and be smart about it. Don't get caught in a bidding war, walk away if you can't get your price! The market does still have some downside, so you MUST buy at next years prices and you can find these bargains if you do your homework and take your time. Right now, properties can be bought that will return a 6-8% annual cash on cash return which is not bad. And, when the market turns, which it will at some point, you will be greatly rewarded, in the mean time you just sit back and collect the 6-8% return and feel good about providing housing for the people of LV.
tomfranklin:
technically correct. CUSTOMER is the technically correct word.
Nonetheless, the jist (swindlers), and the numbers (property hoarding) stand.
So does the number to the Real Estate Division (Ask for Investigations):
(702) 486-4033
The banks aren't playing nice. Four months ago I saw a Fannie-owned house I liked listed at 216k and my (otherwise-useless) agent said it's worth 166k. We offered 166k and it was rejected. 2 months later the house sells for 160k. The broker working for the bank was playing games. He wouldn't talk to my broker and would only accept written offers. When our initial offer was rejected we were told to "start over" with a new written offer. Also, the bank's counter-offer was at asking price. That's 6 grand of your tax money down the drain because joe blow agent is a dummy.
tomfranklin:
Gotta comment on this one 'bro:
"...in the mean time you just sit back and collect the 6-8% return and feel good about providing housing for the people of LV...."
Just love that sit back and relax stuff. I think you forgot to mention UNLESS you are going to manage the property YOURSELF, you're gonna have to pay a PROPERTY MANAGEMENT COMPANY 6-8%, at a minimum, to keep an eye on it for you.
Especially if your working (hopefully) 40 hrs per week OR if you live out of state.
And if you're not working, where ya' gettin' the LOAN..?
I have a GURU book the lays out the same stuff.
Easy money. No work. Greatly Rewarded. (Almost) Guaranteed.
tomfranklin...don't you think you can get 6-8% returns in the stock market and keep your money liquid, instead of being tied up in real estate? I think there needs to be a serious premium for investing in a non-liquid asset, and the returns you listed are definitely not enough. Especially when the S&P is up 20% for the year.
This entire town is corupt and morally bankrupt that is why no one stays here.
Be honest with the readers. The home prices will continue to fall through 2012 and if anyone tells you differently they're lying or just plain stupid.
We're in the Heavy Civil Construction and have developed thousands of acres here for the developers and most are not even thinking about any type of housing recovery even starting until late 2012. We see projects years before the public does and our shelves are bid room is bone dry and we are not expecting to see anything until 2011 from a few of the major builders. These lots won't become ready for until early 2013 so be honest with the facts.
There are high end lots and these homes will be built in Henderson, Ascaya, McDonald Ranch and Southern Highlands. The majority of the new homes being built for the last year and half are junk, the builders have changed their designs and are making every little thing extra to bring the quality of the home up to homes of two years ago. It is cheaper to buy foreclosed homes when it is all said and done.
Before you buy a new home really look at the quality of the home, look at the grade of the materials, the substrates used, the lighting packages, the wiring packages, the window packages, the roofing materials, etc" what you will find is the homes built two years ago verses today don't compare in design and quality. Compare the old verses the new, you'd be surprised at the changes made in order for the builders to make a profit, the differences are huge and noticeable if you know what to look for.
For all those bidding on homes right now:
The banks have lots of houses in their inventory, lets say it's 100. The banks only have 25 on the market so they can get bidding wars.
The problem is that the banks know the second wave of resets with Option Arm & Alt-A loans are coming. The banks know that they're about to get screwed anyway so they're making whatever money they can now when supply goes through the roof.
This video is from December of 2008. 2008. One more time: 2008.
http://www.cbsnews.com/video/watch/?id=4...
The stock market is going back into the toilet too. Why? Look at the 3:45 mark of that video. Notice what we're in? A valley between two spikes of bad loans. The second wave/spike is coming and no one has done anything to stop it.
Sometimes a forest fire HAS to happen to clear out all the dead wood. All these bad loans are dead wood. Unfortunately, when the forest fire is blazing it takes down good trees too. More than 100 banks have failed this year...
Banks are scared. They have all the information and they see the writing on the wall. They're doing whatever they can to get money now because once we're in late 2010/early 2011 the mortgage industry will have ruined another 100 banks.
Good luck everyone, we're all going to need it.
I do not think I would buy a new home in Las Vegas.They built the houses to fast,and the concrete slab were not dry.It takes 30 days or more to cure the concrete slab before the building can be constructed.
rejecto: you probably could rent those two bedroom condos to 20 illegal Mexicans or 200 illegal Chinese.
wolfie: does that mean Las Vegas is going to slide into Lake Mead soon?
First of all, I wouldn't even consider buying one of these cheap $%&* cookie cutter , grade 3 materials so called houses. They are just thrown together on a little postage stamp sized lot and marked up 300 percent to some ghetto sucker with no means to pay the mortgage anyway and so it goes...
Don't buy here, this is a wasteland.
Buy a house where they have established business'.
Quickest way to become a millionaire in Las Vegas is to start with a billion and invest in the housing market.
You can earn 24% annual return on your money buy in the Arlington Ranch and the Mountains Edge Community providing you have patience to the cash to buy.
The rental on Arlington Ranch range from $1,500.00 to $1,900.00 a month. The purchase price on these units has dropped to less than 85k for the 4 bedroom units and just below 60k for the two bedrooms.
Arlington Manor is selling for $180k with rents up to $2,200.00
Chaco Canyon foreclosed homes can be bought for around $110k and rents are around $1,800.00 month.
Do the math when you're looking for rental income. If your mortgage interest is low and your bank or investment returns are less than rental units then buy. If you're working with a RE agent, don't. They'll jack you around and feed you a line to drive the pricing up. Find your places, make cash offer and continue to make cash offers until the deal you want surfaces. It will just don't get into a war or be impatience.
Type O - should be 3 not 4.
The rental on Arlington Ranch range from $1,500.00 to $1,900.00 a month. The purchase price on these units has dropped to less than 85k for the 3 bedroom units and just below 60k for the two bedrooms.
These Arlington Ranch rents seemed a bit high to me, so I just checked on craigs list and their are 26 rentals available ranging from $900 for a 2-br to $1350 for a 4br >>>
http://lasvegas.craigslist.org/search/ap...
If you can buy a 4br at$85k it would work out to around a 12% return cash on cash. This is not bad at all, but I do think we will see some decreases in the higher rent units like this. I've had to reduce our rents over the last few years from $950 to $800 on some 2br's we own near the strip. I'm looking at some 2-br's at Park Ave, they sell in the $90's and rent at $900-$1200.
I am thinking that the rents should hold up at Park Avenue because of it's location and it's design is very unique, completely different than 99% of cookie cutter condos that fill the valley. I am waiting for the right price on the right unit. At some point, within the next 5-10 years the prices of these units will double.