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Sales of new homes slide, homebuilder confidence shaken
Steve Marcus / File photo
Six of seven months of this year the number of new-home sales has topped last year’s numbers, but signs show the demand for new homes might drop after the expiration of a federal tax credit.
Tuesday, Aug. 17, 2010 | 11:39 a.m.
Sales in the Las Vegas new-home market tumbled in July in a sign the expiration of a federal tax credit could hamper the industry the rest of the year.
SalesTraq reported this morning that the 408 closings of new homes in July represents a 58 percent decline from June, when 983 closings were reported.
The 408 sales in July are six more than July 2009, but the fewest since February, and homebuilder confidence in the market appears to be sinking. Builders took out 364 building permits in July, the fewest since January and a 19 percent decline compared to July 2009.
On Monday, the National Association of Home Builders said its monthly index of builders' sentiment about the housing market fell to 13, the lowest reading since March 2009. Readings below 50 indicate negative sentiment about the market. The last time the index was above 50 was in April 2006.
SaleTraq reported that the one positive note about Las Vegas’ new-home market is in six of seven months of the year, sales have topped last year’s numbers.
Buyers closed on 3,505 homes through the end of July, about 1,700 fewer than all of 2009. But sales need to average about 400 a month to surpass 2009.
The average sale per subdivision was 1.86 in July, down from 4.41 in June. That’s the fewest sales per subdivision since 1.49 in February.
The median price of new homes sold in July was $210,000, the highest price since September 2009 and about $28,000 higher than June.
SalesTraq reported that new home prices were boosted by 90 closings at CityCenter.
In the existing home market, SalesTraq reported 4,128 closings in July, 840 fewer than June but sales have been running more than 4,000 a month since March.
Still, the existing home market isn’t as heated as it was a year ago. The July sales were 19 percent lower than July 2009 when there were 5,098 sales.
The market will have to pick up the pace from July to surpass the 52,015 sales in 2009. There were 29,583 through the end of July, SalesTraq reported.
The median price of homes closed in July was $120,000, $3,000 lower than June. Since August 2009, prices have floated between $115,000 on the low end and $126,000 on the high end.
The price per square foot has remained steady. It was $79.78 in July, close to the average of $79.11 for the entire year.
Short sales fetched the highest price in July at $125,000. Foreclosures sold for a median price of $115,000 while those sold at foreclosure auctions went for $98,500. Traditional sales went for a median price of $120,000.
Short sales made up 46 percent of the existing home sales in July based on the Multiple Listing Service data of the Greater Las Vegas Association of Realtors, SalesTraq reported.
SalesTraq reported 1,907 homes were repossessed in July, 358 more than June but 12 percent fewer than July 2009.
Las Vegas is on pace to have fewer foreclosures in 2010. There were 10,388 reported through July compared to 20,426 for all of 2009.
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Please NO MORE new homes!!
Rather than build, LV should be buying up entire "distressed home" areas and creating parks or other public facilities in their place.
The city may have already entered a period of contraction that could take a long, long time to work its way through.
We cannot or should not interfere with the free markets, but don't feel bad for builders who fight this reality.
New homes???? Since the Valley is pretty much built up - Where in the hell did they find empty land to build them?
Just what Vegas needs.....
"The median price of new homes sold in July was $210,000, the highest price since September 2009 and about $28,000 higher than June."
"The price per square foot has remained steady. It was $79.78 in July, close to the average of $79.11 for the entire year."
Hey Buck -- what's the current market per-square-foot cost/price differences between new and used homes in the valley?
Thanks
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Either our finest realtors naturally left for greener pastures, or their "art of the deal" to fetch hire prices wore off.
For the life of me I cannot understand why anyone would want to live in Vegas, it's a hell hole and getting contually worse day by day.
@gbigs
Two things I would disagree with you on.
1. I don't think that Dems or Libs are solely responsible for this entire mess. If there is truly one bipartisan motivator, it's GREED. I'm sure that if we had all the answers and money trails available to us, we'd see that. No longer are we electing the best person for the job: We just want to get the person in who will do the least damage.
2. I don't think that Vegas casinos are going away any time soon. They will always exist on some level to skim away the disposable income, but they certainly will be shells of their former selves.
I do totally agree however that Vegas is done for. The casinos and hotels have already begun treating their workforce as disposable. Vegas has always been a transient town, but it will become even more so as time goes one. Families laying down roots will be the vast minority, as there will no longer be any stability for anyone here. The online incentive will be for degenerate gamblers to have easy access to slot machines and liquor. Be it a major construction project, or a quick entry-level work, nothing here will be long-term any longer. Doesn't matter how long a person stays, they WILL eventually be leaving. Only retirees and victims will call Las Vegas their final resting place.
Why do we have NEW homes being built? There should not have NEW homes built until we stabilize the current ones and foreclosures . Enough said.
@gbigs
1. Most casinos elsewhere (be it Asia or Sovereign Native-American land) are either owned, or operated by the same people that own/operate Vegas Casinos. So the companies themselves will not suffer. The joints here in Vegas will, but the owners will not.
2. And just as Fannie/Freddie helped fuel those sup-prime loans, so did Bush junior not do a thing to stop them, nor any of the other contributing factors that got us into this situation. Bonus: he put the federal government on the fast-track to bail out GM. So much for free market.
But still we agree, Vegas is through.
Perhaps with the sup-par construction materials and build quality, we can get Obama to initiate a "Cash for Clunkers" type program to outright destroy the oversupply of foreclosed homes as a forced-initiative for people to buy new ones?
WHY DO WE NEED NEW HOMES BUILT RIGHT NOW??? Give me a break..how many thousands sit empty? If we can't sell what we have empty - why approve builders to build more? Why? Because city Gov't needs the money. You forget that as soon as builders buy land - they have to put there money to work - build homes? They are taxed..all going to city government..
Montana's looking pretty good right now!
More importantly, has Nic Cage's Las Vegas stabbin' cabin sold yet?
I visit Las Vegas frequently and would retire there in a heartbeat and probably will when I reach the age. Great weather, lots to do and close proximity to many interesting places to see and vacation. Friends of mine have retired and are moving there in Sept. Retirees are not enough to save the market though... It will take years for the glut of homes to be absorbed. How many, who knows?
Harley
The median price of new homes was $101.57 per square foot but that didn't include the 90 high rises in July.
The existing home price was $79.78 per square foot.
about a $22 dollar difference.
By no means am I unconcerned about the loss of jobs, loss of revenues, hardships to home buyers, etc. But I am curious about something. During the big growth boom, all the realtors I spoke to said the same thing: that by 2010, there would be no more land to build on. They said "get a house now, while you can afford it! They won't be building any more of them in just a few years!" So, if the economy had not gone bust, and if this presumed prophecy had come true, then wouldn't the construction industry still have ended up doing much less well by now? It seems to me that, one way or another, the livelihood of construction in Las Vegas was destined to hit a wall.
Good, maybe the developers will leave and destroy the way of life in some other town..
Thanks again, Buck -- I was looking for the current market premium between new and used.
Example:
New 2500 sq.ft home = $253.925
Used 2500 sq.ft home = $199,450
(~+21.5% premium new to used)
Now the question becomes what has been the historic premium trend?
"WERE OUT OF WATER! IN THE WORST DROUGHT I'VE SEEN IN 50 YEARS"
Oh my god.....we're all going to die!!!!!!
These posts are interesting as most seem to indicate a further demise of LV. I'm sure a year ago the posts would indicate tough times but certainly not to the level of "ghost town" predictions. I certainly hope the bottom is near and not a prolonged death spiral that never ends. The only way to recovery is the rest of the country gets good job growth and confidence in the future. Many "experts" think that's years away and a few think we may have 9-10% unemployment for decades to come. It's always easier said than done.
"The 408 sales in July are six more than July 2009, but the fewest since February, and homebuilder confidence in the market appears to be sinking."
Appears to be sinking? LOL... So confidence just NOW started to sink? Please.
This bomb went off a while ago and it was televised on 60 Minutes on December 14th, 2008.
The explosions and the fallout continue well into 2012 people, and that's just the residential market.
Wait till failures of commercial properties start getting more ink/airtime... They're the next big thing that you could have heard about back in December of 2008.
The unwinding of this debt is about 1/3 of the way through it's course at best. It's probably more like 1/4 of the way through.
There are more stones to pass. THAT, you can bank on.
P.S. Don't expect the country's unemployment rate to be below 6% until after 2015 at the earliest.
OK OK dont over react.....3 yrs ago people said buy buy buy now their saying vegas is dead sell sell sell.....the truth is in the middle... vegas was way inflated and now is headed toward under inflation (not there yet).... but in all reality Vegas will still be around just not tons and tons of excess people still come here in large numbers they are just not spending as much...but then again you really dont know what there spending I know a casino tax auditor who tells me casinos never really tell how much they are making or losing, but pay attention to owners like the Fretitas....they wouldnt bother to basically buy back Stations unless they see pleanty of profit now and in the future, that you can be sure of
What is WRONG with these people who 'build' houses in Las Vegas.
NEVADA ONLY GETS *TWO* PERCENT (2%) OF ALL THE WATER IN THE COLORADO RIVER BY *IMMUTABLE* LAW.
AND THAT'S IT.
California and Arizona and the other states get all the rest.
When's the last time you heard this from an incumbent 'Politico'?
And you say you're going to vote for WHO...?
Comment removed by moderator. Post in all caps.
It will come back and it will survive but not the way anyone that bought a home in the past 12 years wants it to....
By gbigs
Aug. 17, 2010
2:09 p.m.
Suggest removal DMC.
You dont understand. JOBS will not be in Vegas. doesnt matter who owns them.
You also dont get that Bush had NOTHING to do with the Fannie subprime crash, he tried to reform fannie in 05, Dodd in the Senate stopped the voter, it passed the house.
The culprits are the Dems, and Vegas is a victim of it. Vegas housing was in the biggest spec bubble due to it.
You can choose, like many like you to ignore reality, it wont change the outcome though.
I warned that the Dems were the black hats, and their agenda would simply continue what they started in the Subprime crash. Its all coming true, sadly.
In the end, Nevada will decline substantially, and Las Vegas will become an Urban Ghost Town.
There is NOTHING to stop it. Nevada has nothing to offer except Geothermal, and it costs too much money to get that going
@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
You are in total denial. The Wall street crash occurred because Wall street was built on "voodoo" economics designed to scam the average Joe engineered by the endless Republican greed; sell overpriced real estate deals to Fannie mae and profit on the sale and on the government guaranteed foreclosure. Under Bush sales were made without income verification !!!
The dems are the fall guys trying to correct the evil..Any way Vegas is finished for at least 2 reason; The relentless Western drought that will empty Lake Meade and the advent of the computer connected to all Vegas gambling machines. The PC has killed the pre 1996 Vegas wiining style I lived from 1985 til it died. I now feel no need to go to vegas. Its a black hole for all money...
OH MY GOD! REALLY? how is any of this a surprise? how is any of this "news?"
Gbigs why don't you just get a moving company hook up to your trailer and pull it to some other state where you can poison the locals there with your whining..errr.wit and wisdom you have loooong wore out your welcome here?
Your welcome!
@gbigs said: "You also dont get that Bush had NOTHING to do with the Fannie subprime crash, he tried to reform fannie in 05, Dodd in the Senate stopped the voter, it passed the house.
The culprits are the Dems, and Vegas is a victim of it."
So who controlled the White House and Congress in 2005? Oh yeah, the Republicans. Dodd's no prize but he wasn't in control. Here's a link with some more information: http://uspolitics.about.com/b/2008/09/18...
I can't believe the city would let these companies build new homes, there are thousands of great homes only a couple years old sitting vacant.
i talk las v up to my buddies. i don't live in nevada but plan to retire there. i have a house in henderson and my renter never misses a $$ month. mortgage going down, doing upgrades to house and everything rosey considering horrid last cpl yrs and esp. for spending/borrowing crowd. equity is down but it was all on paper anyway and if higher again someday great.
I'm sure these are NOT homes just now being built from the ground up.I'm sure these are homes were foundations were set and never completed.Clearly...new home contruction is at its all time low. I saw a bank owned house @ 2400+ sf going for $224k....the seller paid 5 years ago...you ready for this $682,000 for that very house.You wanta know why the bubble burst??The other half of that sad story is,their taxes are based on that $682k for a house that has NOW assetted in 2010 for $86,000.You do the math.Your high end is now set at about $225-250k max.The problem here is....the county has already SPENT the tax money that is not coming in for projects and higher salaries for the union FF & police.That situation is going to get alot worse for several more years. Is anyone in the county listening?
To homebuilders: STOP!!!! Put your efforts in contracting with banks and others who own and repair what we have. Also repair apartments. Do something else. Like the manufacturing did in WW II from consumer to war, or like liguor plants did in prohabition from spirits to soda and other drinks. Use your immagination. That's what made America great! Wait until we get on our feet and consume what we have, then I will be the 1st in line to buy a bigger place.
newsy97, PARKS? Are you kidding. You know someone has to pay for the construction and ongoing maintenance of parks. And too many parks have been over run by druggies and criminals.
I seriously doubt that anyone would want taxes raised for that.
Most new parks are paid for by developers (and passed on to the buyer), who have to pay thousands in park fees for each house built and/or set aside land to construct the parks.
Park construction follows home sales.
For all those who think no new homes should be built at all, I guess you are O.K. with builders, engineers, architects, landscapers, etc. adding thousands more to the unemployment rolls?
sevenhills, there are still SOME buyers who WANT a new home, and are willing to pay a premium for it. I'm the kind who would go for the deal on a 2 year old foreclosure you mentioned (and have done just that) but some folks still want "new".
Thinga are tough all over. Pinnacle Gaming is selling its AC boardwalk property(the sands) at 30% of the original purchase price
Things sorry.
gbigs:
"You can thank two things for it:
1. Democrats and their false alturism to destroy housing giving them to their inner city, and illegals consituents"
The following quotes by George W. Bush on May 17, 2002 from his 'Home of your Own' speech. George W. Bush's initiatives led to the beginning of America's housing meltdown in 2006-2008. You can access the video of the speech here http://www.youtube.com/watch?v=kNqQx7sjo......
"The single greatest barrier to first time home ownership is a high down payment, it is really hard for many, many, low income families to make the high down payment, and so that's why I proposed and urge congress to fully fund the 'American Dream Down Payment Fund', this will use tax payer money to help a low income buyer make a down payment"
"If one of the barriers to home ownership is the inability to make a down payment, and one of the goals is to increase home ownership, it makes sense to help people to pay that down payment"
"I've proposed what we call a single family affordable housing tax credit, to encourage the development of affordable housing in neighborhoods where housing is scarce."
"We certainly don't want there to be fine print preventing people from owning their home, we can change the print"
"These are important initiatives that we can do at the federal government, and the federal government obviously has to play an important role, and we will, when I lay out a goal I mean it" (In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. Source http://www.washingtonpost.com/wp-dyn/con...... )
"The real estate industry benefits when people are encouraged to buy homes, it's in their self interest that we encourage people to buy homes"
"So one of the things I want to talk about today is how to create a sustained commitment by the private sector that will have a powerful impact. First of all, we want to make sure that we help work to expand capital available to buyers, and as I mentioned overcome the barriers" (and banks responded with numerous new 'predatory loans' http://money.cnn.com/2007/03/19/news/eco...... )
"That's why I've challenged the industry leaders all across the country, to get after it for this goal, to stay focused, to make sure that we achieve a more secure America, by achieving the goal of five and half million new minority home owners, I call it 'America's Home Ownership Challenge'." (check the graph here for the spike in subprime mortgages http://bigpicture.typepad.com/.shared/im...... )
-CONTINUED-
First of all government sponsored corporations that helped create our mortgage system, I introduced two of the leaders here today, they call those people Fannie Mae and Freddie Mac, as well as the federal home loan banks, will increase their commitment to minority markets by more than 440 billion dollars."
"I want to thank Leland (Freddie Mac) and Franklin (Fannie Mae) for that commitment; it's a commitment that conforms to their charters as well and also conforms to their hearts. This means they will purchase more loans made by banks to African Americans, Hispanics, and other minorities which will encourage home ownership. Freddie Mac will launch 25 initiatives to eliminate home ownership barriers, under one of these consumers with poor credit will be able to get a mortgage with an interest rate that automatically goes down after a period of consistent payments." (Bush's initiatives to eliminate barriers, code for lax oversight or deregulation, led to an explosion in predatory lending http://www.usatoday.com/money/economy/ho...... )
"I'm serious about this, this is a very important initiative, for all of America, see it as a chance for us to empower people, we're not going to talk about empowering government, we are talking about empowering people so they have got choices over their lives"
"It means we use the mighty muscle of the federal government in combination with state and local governments to encourage owning your own home" George W. Bush, May 17, 2002
The Gravy Train in Clark County is over That is for sure there will still be people who want new homes but that market will struggle for a extremely longtime coming.Allot of people do not understand why the bubble began to begin with.I believe people understand why it burst.Back in 1998 while the country was still under the Clinton administration there was a lady who actually was a cannidate for attorney General but Clinton choose Janet Reno instead anyway she was appointed to another position by Bill Clinton which she was over area which looked at the stock market(Not the SEC )Not sure the name of the commission but she saw this comming .She took it to Allan Greenspun.Allan Greenspun dismissed her concerns and she then pressed forward and took it to congress Now he testified before congress that the banks could and would regulate themselves which we know now did not happen Back a few years ago when this crises started shortly after the bailouts Mr Greenspun testified that he had know idea this would happen Now BUSH is not to blame on the hosing crises but the dems are for overlooking and turning a blind eye
Crying the blues over your problems. Ihave a beautiful vacant lot in a prestige watershed with sailing tacking slip etc., golfing, walking, birding and not a bite on the bidding. Except darthvader who probably thinks rubbing against my car door since the car is "city property" will warrant him a little hot air on the circulation of the genitals.
Now say that in the past comment this City was built on chance and many people in this town took a chance on buying a home they could not afford thinking that the rise in income would continue and the economy would continue to thrive but everyone that knows history of this countries economy about every 10 years to 15 years we go through some sort of recession Now in the last 60 years we have not seen on this bad I have lived through at least 2 and my father has seen at least 5.If your income supports a mortgage of 100,000 you do not go out and buy a home for 200,000.If your note on the 200,000 home is at a 100,000 home range and you sign that mortgage knowing in 5 years the note is going to escalate to double and your income is only supportive of the original note You should not gamble on the fact that in 5 years your income will be double.
That is gambling in a different form.Not just in Las Vegas but around the country many people fell into this gab of not knowing.Fortunately I did not fall into this although I could have.But I was taught by my father to live well within your means.Meaning my mortgage did not exceed 30% of my income after taxes.Yes I had to sacrifice but it paid off and now I can say that I can afford my home today and my income is about the same as it was 10 years ago yes it went up but it fell as the recession hit.Being in sales on commission it is hard to forcast your income As for many others.When you make large investments you must look at all factors and live within your means this will most of the time work out for the best.Not one paticular administration is at fault for the housing crisis it is our own for allowing greedy Mortgage brokers for not explaining what product(type of mortgage)they were selling to the buyer.Really in all do respect it is our own fault for signing onto something we did not really understand.I will say tht the federal government should have stepped in in 1999 and told the banks and SEC to be extremely careful and given them some guidelines to go buy.I knew this country was in for a mess once the stock market jumped into the home mortgage business.I feel sorry for those who were deceived into buying a home they really could not afford and now have lost their home and destroyed their credit and we not able to buy a home for many years to come but remember the ones who deceived you made money off of you but now they can not sell you another one for a long time and that will cause them to suffer in the long run I am a salesperson and my first rule is honesty whether I get the sale or not I much rather not sell you something then to lie to you and never sell you something again
This country has learned a hard lesson and will come out of this recession smarter and stronger than ever before It is hard to see the light at the end of the tunnel and it will be many years to come before its back I look at and hear the reports of how well the gaming market is in Macu China right now but that will come to an end.China will see the day of over growth and will have their own recession so we must be patient here in Vegas.Vegas needs to go back to the old school Vegas and revert back to what made Vegas Food and hotel rooms were not the primary source of income of the casinos they were an amenity they were part of a way of keeping the gambler gambling.The gaming floors are what made Vegas not players club cards to calculate what comp you get.You have a player winning you want to keep him here so you give him comps like food and rooms You create more winning and excitement on the floor by loosening the slots and people hearing people cheering on their winnings.What the casinos are doing now is ridculas win a person wins big you see those people leaving with a large part of their winnings.I saw a man hit for 250,000.00 on a table one night and I over heard a floor person ask the pit boss if she could comp him a room and some champaign The pit boss said Naw he probably wants to go home.I heard the floor person ask him the gambler what he wanted to do with the money and he said I want to gamble but instead the guy left with his winnings and the casino did not get some of his winnings back I call that Stupid and to cheap to give the guy something for free what does a room comp truly cost what does a meal truly cost I think not giving the comps to the gambler cost that casino alot more than the value of a few meals a few free nights and a bottle of champaign The casinos report losses which justify layoffs and then people lose their homes and lively hoods and the casinos continue to loose money obviously they are not doing something right and that is customer service I have found that there is at least one casino in town which is maintaining the old school Vegas mentality and every time I go there it is packed I heard that the last couple of weekends that out of its 2100 to 2200 rooms they have had only 100 or less not being used but that casino owner is looked at as though he is crazy for loosening up slots and expanding and comping the way it does.I see this casino as being extremely smart and is getting a reputation as the place to go.That casino may not be showing huge profits but they have not laid off anyone during this recession and has actually added dealers and other jobs and is showing positive growth plus it has a reputation of keeping its employees happy as well as its patrons So when the economy starts to turn around this casino will be known a popular and I hope will grow.
rodtig care to say which casino this is?