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Analyst: Las Vegas home prices will increase 3 percent this year
Sam Morris / Las Vegas Sun file
Houses sprawl across the Las Vegas Valley. When the housing bubble burst in 2007, Las Vegas became the No. 1 area in foreclosures nationwide.
Thursday, Feb. 4, 2010 | 12:47 p.m.
Dennis Smith
A Las Vegas housing analyst said today he expects sales of existing homes in 2010 to mirror those in 2009 and predicts prices will increase by more than 3 percent by the end of the year.
Dennis Smith, the president of Home Builders Research, said in a seminar held over the Web that existing home prices will rise by $4,000, or 3.3 percent, from $123,000 at the end of 2009 to $127,000 by the end of 2010. It will jump another 5.6 percent to $134,000 by 2011, Smith said.
Prices have fallen nearly 60 percent from the peak of the market.
“I am not expecting prices to take a big jump for a long time,” Smith said. “Anybody who thinks home prices are going to appreciate markedly in the next couple of years is not listening to what’s happening out there,” Smith said.
Smith predicts the existing home market will have 45,000 sales, keeping pace with the 44,885 in 2009 in one of the market’s best years. By 2011, however, Smith said he expects sales to fall to 44,000 because of higher interest rates.
Investors continue to buy up foreclosures properties and shut first-time buyers out of the marketplace. Smith said those buyers will turn more to the new-home market.
Las Vegas had 4,968 sales of single-family homes in 2009, and that should increase slightly to 5,400 in 2010 and increase to 6,000 in 2011.
The first half of 2010 should have stronger new home sales because of the $8,000 tax credit for first-time buyers and $6,500 credit for other buyers is set to expire by June 30, he said.
“The second half is up in the air because we can’t assume they will extend the tax credit again,” Smith said. “We won’t have a big increase but it is an increase. That suggests we have reached the bottom of the new-home segment.”
As for new-home permits, Smith projects 4,400 will be issued in 2010, up from 3,850 in 2009. By 2011, builders will take out 5,100 permits, he said.
Smith said he can’t predict when the market will return to 10,000 permits. Builders took out 32,879 permits in 2004.
“I don’t know when we will get back to normal,” Smith said. “We have to change the definition of that.”
Smith said the median new-home price should increase to $220,000 by the end of 2010, a 2.8 percent gain over the $216,000 price in 2009. The new home price was $244,090 in 2008.
Smith said he’s not expecting a flood of foreclosures in 2010 and suggested the market can absorb those it is getting because of strong demand from investors.
According to newly released data from First American CoreLogic on foreclosures for the Las Vegas, the rate of foreclosures among outstanding mortgage loans was 8.53 percent in December, an increase of 4.34 percentage points compared to December of 2008 when the rate was 4.20 percent. Foreclosure activity in Las Vegas is higher than the national foreclosure rate, which was 3.16 percent for December 2009, representing a 5.37 percentage point difference, the firm reported.
The mortgage delinquency rate has increased. First American CoreLogic data for December 2009, shows that 21.08 percent of mortgage loans were 90 days or more delinquent compared to 11.91 percent for the same period last year, representing an increase of 9.17 percentage points.
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Just what we DON'T need is a flood of investment buyers to turn the properties into rentals and turn over homes which will turn what is left of any decent neighborhoods into trash.
Dennis Smith must be on drugs or in deep debt to some realitor or loan company to make this statement. The question: Why is it that so called experts (especially the ones in Las Vegas) consistently call the Las Vegas Housing Market WRONG! The key to housing-sustainability is JOBS Mr. Smith. Stop placing your foot in-mouth like some many of you in your industry. You, Mr. Smith like some many in your group as largely responsibile for the gross speculation on the LV housing market which resulted in the free-for-all from appraisers, to loan officers, to lenders, to title companies and local officials placing the burden on the hourly worker. Please shut Up, will ya!
Gosh, a 3% increase. Man, I'm ready to sell my $200,000 house now worth $100,000 for $103,000. This is good news.
Thanks, Dennis.
....Further more, it is apparent that Mr. Smith has met with the banks that have huge inventories of foreclosed homes, and now the banks are prepared to release the foreclosed home on the market. Where is the integrity in being a professional and doing the right thing? Must everything be about money and screwing the working people? Where is the integrity in this the system? Mr. Smith Please, say no more!
@environ:
Investors/renters are a double edged sword. On one hand, do you want the home next door to remain vacant for 8-12 months while the bank forecloses and doesn't keep it up, meth heads move in, etc, or do you want (mostly) normal people to move in.
That said, this article is somewhat deceptive - the median home price might increase, but I would expect that's because of fewer foreclosures and more short sales. Banks are finally realizing they can get more for a short sale vs. foreclosure; it only took them a year and a half to figure it out, no wonder why we're in this mess. It wont be due to someone thinking your home is worth more for any particular reason.
You are right on VegasVegas. Comments such of Mr. Smith trying to incite the market which is the working person into going out acquiring debt because of his projections. This is what happen before. Playing on the uneducated, thinking they will be left out. Well, Mr. Smith and you bankers, the workers are not working. And the ones that are working are saving their money.
Again, where is the integrity in the Las Vegas Realestate Market among the so called professionals? Text book Unethical behavior on full display.
Socialism For All !
Mr. Smith is peckering the would be buyers with ham and cheese on lots in the Everglades. He has to be auditioning for a comic's job at the Heather & Basket.
There is not one sane individual adult on the Las Vegas, Miami or California scene that would put one milligram of credibility on this absurd pickem' up sticks.
How 'bout lets sell just one of these turkeys at say $120,000 with a mortgage at 4.3%. See if that ever happens in today's market.
Goodly thing he's President of what ever the company is 'cause if not he'd be out pounding the sidewalks with resumes in hand.
Yours Deeply in Laughter, Merci.
....One more thing, the Title Analyst, President, and others should have a definition placed next to the comments, and the artictle, to measure the person being quoted and the contents of artictles such of one by Mr. Smith.
LMAO
"As for new-home permits, Smith projects 4,400 will be issued in 2010, up from 3,850 in 2009. By 2011, builders will take out 5,100 permits, he said."
I wonder who the 4,400 idiots are that are forecast to build a new home.
hey buck...
why don't you give us some info on how mr. smith's predictions have panned out over the past few years...
now that would be worth reading...
why don't you tell us who pays mr. smith's salary...
we readers want to know...
come on buck...
you can do better...
What about the 80% of Las Vegas home owners that are under water? Some percentage of these people will walk-away, even if it's only 10-20%, that's enough to increase the flood of foreclosures 100%
Add the tightening of financing and the continue loss of jobs and I see the market continuing to go the other way, if we only see a 3% decline we will be extremely lucky!
Mr. Smith is about 6 to 8 years early with his projection!
nednougat
Even though it really isn't funny, I had to laugh about that.
What's the big deal of 3% when so many lost more than 30% on their home values??
Yeah, right!
The history of Las Vegas suggests Smith may be right. Whether we have hit bottom already or are near the very bottom of the local housing market is not really that important.
The fact is you can now buy a decent home here for less than what it cost to build it. That's called value. And that's why smart and well-funded buyers are investing (with more than 40 percent paying cash) in the LV housing market in near-record numbers.
I'll bet with the smart money folks and against the naysayers posting comments to stories like this one.
Then again, I knew just enough to buy property here before the boom and resisted buying again until now.
Walkin away ryt now!
GM
You must be an investor with no real ties to Las Vegas other than buying properties and trying to rent to a population that continues to become smaller and unemployed daily. So many rental properties now, who will be left to rent these investor properties? And who will stay employed long enough to actually buy one of these homes? No job security in Las Vegas.
The investors screwed us the first time around and they will be screwing themselves this next time go round. They will just "abandon" the homes they can't rent....or all become Section 8 landlords.
I am sorry, but this dude is full of it. Just go to CBER, http://cber.unlv.edu/county.html, every category is in decline, except unemployment, which is on the rise. With growth declining, unemployment rising, where does he expect the buyers to come from. The other point if it does rise it will be from the same BS that got us here, which are investor purchases. Rents are declining, vacancy rates are increasing, so that might keep a lot of investors at bay. None of the data supports his conclusions. This is another feel good attempt to try and get people to buy in this market. The truth is we haven't seen the end of foreclosures. REO's and short sales are taking forever to close. Buyer's are falling out from frustration of having to deal with this. I repeat nothing supports this guy's comments.
and i believe jessica simpson will finally call me for a date this year...can i get in the paper?
i think too many people have "tunnel vision" when it comes to the housing market in vegas.
for houses to go up, there has to be new people moving into town.
for vegas that means them coming for the tourism industry. and how many NEW jobs ( not just switched jobs ) will be created this year?
probably very, very little...and i bet there will more more jobs cut than created.
also, people like GM are full of it.
all the "i KNEW when the boom was starting and when it was over" are just showing how dumb they are.
nobody...i repeat nobody...including the subject of this "article" can predict what the market will do because you don't know a cycle has started or stopped until well after that point in time.
and again...someone is saying "realtors should be jailed"?
why?
that's just a stupid statement. i'm so sick of trying to blame realtors for the housing market.
either give some kind of FACTUAL evidence of how a realtor...not a LOAN person...but a REALTOR is a cause of housing prices being down.
A NY Times piece on CNBC.com reported that homeowners who are 25% or more underwater seriously consider a "strategic walk-away". If there's any truth to this, we'll see many more "walk-aways" here in LV since so many are buried so deep.
Recently a co-worker of mine did exactly that, and is renting an identical house in the same subdivision for less than half of what his previous mortgage payment was!
This mess is not going to end anytime soon.
I'm an expert. I predict home prices in Las Vegas will average out to what a $10 per hour wage can afford.
Dennis Smith in the RJ Real Estate section, Saturday, November 8, 2008: "If you're looking for a better deal in 2009 than you can find today, I don't think that's going to happen". He added, "I think the fourth quarter of this year (2008) is going to be the worst for us in Las Vegas".
Enough said.
really DENNIS u really think so. BoA will be put 600 foreclose home a month on the market. i can't until other lenders put there house on the market. these lender are POS they maipulated this city for so long it destroy this city. hey DENNIS i make a prediction housing will plummet and people don't have to paid me for that answer
who dennis smith work for
I guess, and just a guess that he's probably has a connection somehow with the National Association of used house salesmen....realtors. Thanks for pulling up the old quotes to show his past predictions.
Using the same "Kentucky Windage" prognostication technique, I predict that either Indianapolis or New Orleans will win the Super Bowl this weekend...
Whoever, pays this this guy for this information, I will do the same thing for half price...
Geez...two key factors missing in his 'prediction'...jobless recovery, and declining rental prices...what an amateur, poser...DO NOT believe this guy...as soon as he wipes the crap off his crystal ball, he'll see what is really going on...or until he gets an education...ugh...same wine, new bottle...
"....The fact is you can now buy a decent home here for less than what it cost to build it. That's called value. And that's why smart and well-funded buyers are investing (with more than 40 percent paying cash) in the LV housing market in near-record numbers....."
What kinda B.S. is this...? People are moving OUT of here. Get it? OUT. These 'well-funded investors' had to have gotten their money from INHEIRITANCE, or EXCHANGE RATES not BRAINS.
They are too STUPID to have earned it on their own....
Forget it, folks. The Sun stenographers will never ask this Dennis Smith to account for all of his lousy predictions.
Just once, I wish they would ask him to explain -- IN DETAIL -- his methodology for coming up with his annual predictions. He says prices will rise $4,000 this year. How did he arrive at that figure? Moreover, has he changed his methodology since his previous incorrect calls for price increases in 2007 and 2008?
If he tries to tell you "that's proprietary information," then stop quoting him.
Of course, these are all rhetorical questions. It's a little wink-wink game Wargo plays with all of his compromised housing sources. They pretend not to laugh when they make these phony predictions, and he quietly prints it as if it's real "information" without asking, "How did you come up with that number?"
That's OK. I'll keep showing up here and letting him know that NO ONE IS FOOLED.
Increase? What is he smoking?
dennis smith is smoking crack again
Do you really want to know the sad thing about his article that was not written about? With the new home permits to be approved by the Clark County Commissioners to include the real estate agent Susan Brager(D) who will be voting to approve these permits will actually be profiting off the sales of the homes and getting enormous fiscal kickbacks to her for doing this for the builders!
She is a licensed real estate agent and she has voted on the Clark County commission always to approve new homes and business build outs to be done by builders. All the time she is benefiting herself fiscally and her company of which she works for, Prudential American, and also to her peers in the real estate industry!
As she has done to the Southwest portion of Las Vegas, Mountains Edge, she will allow builders to renege on any deals they will of had made to improve the communities and will vote to change the zoning laws of residential neighborhoods to allow for bars to be inserted directly into the residential neighborhoods!
Also, is we are to experience any growth, which is not likely, because this Brager(D) assess Clark County property below market value for property that is suppose to go to public auction, but guess what it never gets to the public auction because she and her friends/peers buy up the property at the rocket bottom prices she has assessed it at and then that lowers everyone's home values and then she sells it and gets an enormous cash profit.
Also, the cash kickbacks she gets is worthy of her going to jail for corruption. A while back she couldn't pay a simple State Ethics fine and asked for a waiver of payment because she told the state she did not have any money, but she had $10K to give to Rory Reid!
How did she avoid paying a legal state fine for an ethics violation and then is able to give Rory Reid $10K? The answer is so obvious! That is why there is an Independent American running for the office in District F. This person is honest, has integrity and is a career military person, a 100% Disabled American Veteran, an ex-immigration officer, and ex-Federal Inspector General, and if you know who they are, the are the pitbulls of government watchdogs! In addition he is a successful small business owner!
He is not a democrat or a skirt chasing republican but an INDEPENDENT! We need Independents more than ever this year, when the same old corruption is not acceptable to me and to you!
Why the character assassination of Brager? She is a resale type. Has virtually no new home business. Why would she approve bars or inappropriate new developments? She could not care less professionally. This writer apparently specializes in low level character asassination - half the hits on Brager ethics bring up his posts.
The 2007 and 2008 projections reflect the fact that neither Smith or anyone else saw the lender kamikaze mission until it was well underway.
I think by the way it was probably a good thing that they went out of control. It probably shorten a 5 or 6 year problem into a two or three year one.
Note also that pricing has been pretty much flat since last June. The mythical foreclosure tsunami will again prove mythical. All indications indicate a slow decrease in the availablity of foreclosed homes.
So we are in the bottom and likely to remain their for at least a couple more months...then we see.
vote her out
olecapt
Are you one of the people of whom is sharing the wealth with Brager?
As for your question about why Brager(D) allowed builders to put bars and the like into residential neighborhoods I do not know the answer!
Probably the same reason she voted to put a graveyard into a residential neighborhood as well on the southwest side of town, even though many of the residents who own homes protested this graveyard being put right into their residential neighborhood!
We have all this space around us, and they should of had put this graveyard in the open areas nearest the mountains, not in my own backyard!!!!
Do you know what that did to my home values????
But what does she care! She is getting kickbacks left and right by her votes to screw over us here in District F.
Also, what right does she have in appraising property that is to be sold by the Clark County government? We have a County Assessor who has this job. For her to be involved in this and by her devaluing the property so low that it never gets to public auction as required by law, because it is bought up prior to being publicly sold!
Guess who buys the property? You got it, her and her friends and groups that conceal her relationship but she is getting cash for her actions. That is for damn sure, how else could she give Rory Reid $10K when she couldn't even pay an ethical violation of $25? She told the state board of ethics after they fined her she did not have the money ($25) to pay the fine and asked for a waiver of payment? Then she gives Rory Reid $10K? Common on, you can't be that stupid to see that relationship are you?
She needs to go and before she goes, she needs to face a State Ethics Board and a criminal investigation as well! Since the last 4-5 Clark County commissioner have all been released slowly from jail this past year, she needs to replenish the stock in prison for her illegal actions!
How much did you make, olecapt? Evidently you are on her payroll or are you her employer, her peer, or her second husband? By the way, Brager needs to update her photo, it is at least 30 years old and she is nothing but a little old 64 year old criminal!
Brager was nailed for a technical violation dealing with the timing of the filing of financial disclosures. It was a lot more than $25. It was waived because she had a death in the family and some medical emergencies that the Ethics board believed sufficient to waive the fine. There was no plea of poverty.
Yeah I am an RE Agent. That is why I know that she sells little if any new property.
What kickbacks? If you have even the least evidence turn it over to the RJ or the Sun. They love that stuff.
In the interim I presume you are some political type trying to run or get someone to run against her.
By the way the last time I testified on an issue at the County Commission she whacked me right up the side of the head and sent me on my way. She was wrong by the way...but she meant well...and I still respect her position.
Now crawl back into your hole and pull it tight around you...
olecapt
Since you are a real estate agent and she is a real estate agent it is a good possibility you are one her partners, and at the very least one of her peers.
I am extremely concerned now about what you said about her physically striking you.
I hope you called the police for this assault and battery by her!
This person is not only criminal and corrupt, but is a physical menace as well to the public. Does she carry any firearms that, we the public, should know about?
Wow, it is amazing that this 64 year old corrupt real estate agent is not only doing what she is doing illegally, as she does have a history of being taken to task by the courts for her dealings with builders, etc., as noted on the internet.
But now to know that she physically assaults people that may disagree with her publicly makes me wonder whether she should be committed for being a threat to others, in general, to all of society is anyone tries to tell her as you did that she is wrong and doesn't accept that!
However, it is very consistent with many democrats to have a superior attitude towards others. As well, as displaying signs of narcissism. This striking out at people shows a borderline personality disorder that is very, very dangerous and also displays her contempt and arrogance of all the citizens of Clark County and her district F which I am sure she will be losing this year, because there are many good people out there who are not corrupt or have hidden agendas!
Sergio. What happens if a meteor hits the earth??? What will happen to home prices? Will Obama have caused it? Most people buy a home to live in. If they can make the payments they will be fine. The problem was caused by the taxi driver in 2007 who told me he was flipping 10 houses at a time because the market would always go up ie. greed.
Crackerjack
I am sorry. I did not realize that you have a handicap until this last post.
Do you think you should be runnig for office with your diminished capabilities?
WOW only 143% to go.