real estate column:

Where is housing market headed? Nowhere, Realtor says

By Brian Wargo (contact), In Business reporter

Fri, Oct 23, 2009 (3 a.m.)

Housing sales, prices steady (10-23-2009)
Reports: Home prices to continue slide through next year (10-22-2009)
Realtors counting on homebuyer tax credit (10-16-2009)
Nevada bucks nationwide downward trend in foreclosures (10-15-2009)

Everyone is looking for insight into where the housing market is headed — will it improve or will it worsen?

Devin Reiss, co-broker and owner of Realty 500/Reiss Corp. in Las Vegas, says the safe prediction is it will remain as it is.

Reiss, who was awarded the Nevada Association of Realtors’ Realtor of the year award for 2009, is president of the 16,500-member organization. He is a former president of the Greater Las Vegas Association of Realtors.

“Obviously, it is still a strong market. Properties are moving, but they are bank-owned properties that are typically under $150,000,” Reiss says. “That seems to be our market and will be as long as those properties keep coming on the market. It seems for the time being it will be more of the same until we get through that product.”

The competition for homes remains fierce with 10 to 20 offers in many cases, Reiss says. That has caused lenders to take homes off the market because there is no need for 40 to 60 offers on a property, he says.

That will stop if foreclosures start to slow, but they are on a good pace, Reiss says. Hopefully, the foreclosure mediation program started last summer will make a dent and help keep people in their homes, he says.

Investors remain active, and Reiss says he doesn’t see that changing as long as prices are so low.

The state association is down from 21,000 at the height of the market in 2006, but Reiss says interest in the profession has perked up with about 100 going through orientation every month.

Many people who left the industry when sales were scarce are returning. Also, the recession is bringing new people into the profession, he says.

“The higher the unemployment (rate), the more who want to get into the real estate industry,” he says.

Nevada foreclosures are high

California-based RealtyTrac, a firm that tracks foreclosures, reports Nevada still had the highest foreclosure rate in the nation during the third quarter with one in 23 homes having a some sort of a foreclosure filing, about six times the national average. Foreclosures during the third quarter rose 10 percent over the second quarter and were 59 percent higher than 2008’s third quarter. The number of homes repossessed rose 29 percent in the third quarter, but defaults increased by 8 percent compared with the second quarter. That may be attributed to a law that took effect July 1 that gives homeowners the option to mediate with lenders. In September 8,568 notices of default were filed statewide and overall filings rose 5 percent over August. Filings were 44 percent higher than September 2008.

In other news:

• The Commercial Alliance Las Vegas announced its 2010 board of directors. Robin Civish, who works as a senior commercial adviser at Prudential Commercial/IPG, is president; Gary Banner of Commerce CRG/Cushman & Wakefield is president-elect. Other board members are Nancy Anderson of Maverick Real Estate, treasurer; Richard Lybbert of Summit Commercial and Patricia Nooney, managing director at CB Richard Ellis, directors. Mike Hillis, managing director at Commerce CRG, will fill a vacant spot on the board. The alliance is the commercial real estate division of the Greater Las Vegas Association of Realtors.

• Windermere Real Estate reported that at the beginning of October, 8,513 homes were available, of which 2,098 were owned by banks and 3,719 were short sales — or 68 percent of the inventory. As for condos and town houses, 2,474 were available, including 602 owned by banks and 1,046 short sales — or 67 percent of the market. Pending and contingent sales reached 14,770, which surpassed the available inventory. The numbers show 96 percent of all pending and contingent properties were distressed, signifying that few homeowners who do not have to sell are putting their homes on the market.

• The National Association of Home Builders has granted its local affiliate, the Southern Nevada Home Builders Association, an increase in jurisdiction to include Lander, Eureka and White Pine counties. The jurisdiction previously covered Clark, Lincoln and Nye counties.

• The Commercial Alliance Las Vegas is hosting its fourth annual symposium Oct. 29 at the Gold Coast. Dr. Mark Dotzour, a national real estate instructor, will teach an accredited class on interpreting global and national economic trends and how those trends are likely to affect the industry and value of commercial real estate investments. He is the chief economist and director of research at the Real Estate Center of Texas A&M University.

Brian Wargo covers real estate and law for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at 259-4011 or at wargo@lasvegassun.com.

Discussion: 4 comments so far…

By VegasQuixote

10/23/09 at 7:27 p.m.

Suggest removal

Judging from the quality of this article, it seems like it's a matter of time before the RJ and Sun merge their business pages. The LV Sun has already reported the latest projections (though no one can accurately predict the near future): 11-20% loss in home prices in the coming year followed by a 4-5% loss in 2011. Foreclosure.com lists 22,311 pre-foreclosures, 15,665 foreclosures, 9386 bankruptcies, 2854 sheriff's sales in Clark County.
By DTJ

10/24/09 at 11:43 p.m.

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"It seems for the time being (the real estate market) will be more of the same until we get through that product."

Nah. There are empty homes in every valley neighborhood -some neighborhoods worse than others. So many of the homes being sold here now are to more boneheaded investors who still think they're smarter than everyone else. So forget them. Bottom line, Vegas is still losing population. It has to GAIN population -significantly- for all the unoccupied homes to meaningfully be removed from the market. Ain't happening for the foreseeable future.
By judgesmales

10/25/09 at 3:29 a.m.

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Who is stupid enough to believe this paragraph?:

"The competition for homes remains fierce with 10 to 20 offers in many cases, Reiss says. That has caused lenders to take homes off the market because there is no need for 40 to 60 offers on a property, he says."

Huh? That makes no sense. If lenders left more homes on the market, the number of bids per home would go down, not rise from 10 to 20, to 40 of 60. There would be more product for sale, and bidders would have reason to look at other plentiful properties, rather than trying to outbid on one property.

Don't let this BS fool you. By pulling properties off the market, the lenders are trying to do precisely what this article denies. They're trying to create bidding wars on garbage properties by creating "perceived scarcity." They are trying to parcel these properties on to the market slowly, because otherwise the bidding wars end and prices actually resume falling to their proper (not propped-up) levels.

I'll say this: this Brian Wargo is tenacious. He keeps coming back, month after month, with housing BS and thinks he and the Sun can slip fast ones by their readers. Sorry, Bri, try again next month. Maybe you should exhume Steve Bottfeld and give him another go. Is Bottfield still alive? How about Dennis Smith? Larry Murphy?
By rrh13

10/29/09 at 6:57 p.m.

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To the comment above: I think that you misunderstood his comment. The banks will pull the property off the market when they receive multiple offers on ONE property being that they do not need more than 10 offers on ONE house. They do not pull other properties off the market because of that. Contrary to what most people believe, bank ARE NOT holding properties to create demand. Banks are diligently working Short Sales, I know from first hand experience, working loan mods. As they are working these they are willing to postpone foreclosure and when all else fails the bank takes the property to auction. A year or so ago I was receiving over 125 REO properties a month, that has been cut in half. At that time the bank would take the property to auction at the loan amount, i.e, the owner owes 200k, property is worth 125k, opening bid is 200k, no one buys it at auction and it goes back to the bank. Well the game has changed and the banks do not want REO because of government backlash and all the headaches that come with the assets, not to mention REO is just a bad name in the industry for banks. So now the scenario plays out like this: owner owes 200k, worth 125k, bank does all the upfront evaluations, opening bid is 65k, sells 3rd party at auction. There are close to 800 properties being sold a month at the Trustee Sale, these are properties that would have gone REO and then been listed as "bank owned" homes. This is something that is not being talked about in the media, only that banks are "holding". Demand is higher than ever and our market would be increasing if the appraisals would increase w/demand. I have deals fall apart daily where a buyer wants to pay higher, i.e., listed at 100k, offer at 130k, appraisal 90k. This happens even when the comps support 130k. This is a big problem and limits our market in making a turn for the positive and limits home ownership for first time home buyers. Example: FHA buyer makes an offer on a house that is listed at 105k, offer is 112k, worth 112k all day, and appraisal comes in at 107k. Mr/Mrs FHA buyer can't bring the cash to the table to close and even if they could, FHA won't allow it, the seller doesn't budge off the purchase price and everyone gets screwed except the appraiser who collects their check. Point of the blog was to let everyone know that are numerous variables that are causing our crazy market from adjusting and becoming normal, don't believe all the hype.