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Thursday, Nov. 18, 2010 | 2:05 a.m.
Las Vegas home prices are projected to fall 16 percent by next June and another 7 percent in early 2012 before rising by the end of that year, according to a Wisconsin research firm.
The latest report by Fiserv, which produces the Case-Shiller Indexes, paints a poorer picture about the Las Vegas housing market than it did in July, when it projected existing home prices would fall 14 percent by early 2011 and another 4 percent in 2012.
Fiserv Chief Economist David Stiff attributes the worsening picture to the reduced demand for Las Vegas housing since the federal homebuyers tax credit ended effectively in April.
Starting in May and going through October — the last month of available data — Las Vegas-based SalesTraq has reported existing home sales have fallen year-over-year.
“What happened was the tax credit delayed the full correction in prices,” Stiff said. Fiserv reported prices fell only 5 percent between the second quarter of 2009 and second quarter of 2010, the latest period available.
The Las Vegas price decline of 5 percent in the second quarter contrasts to the nation as a whole as prices rose 3.6 percent, Fiserv reported.
“You have a large supply of distressed properties and with a high unemployment rate, you don’t have a high enough demand for your inventory,” Stiff said. “I think there is a lot of uncertainty of where prices will bottom.”
Fiserv’s housing numbers show bigger drops than other research firms, and their numbers have sparked debate.
The company calculates prices by what the same homes sold for in the past and not by comparing sales of whatever homes are sold in a particular month.
SalesTraq, for example, has reported that Las Vegas home prices have held steady for 18 months. Since June 2006, average prices have fallen $170,000 to $118,000, a decline of 59 percent, SalesTraq reported.
Stiff said investors have helped boost the Las Vegas market and keep prices up by their activity, which some analysts said falls in the mid-40 percent range of existing home sales.
If their activity falls off, that would further depress prices, Stiff said.
In the second quarter, Phoenix’s prices rose 5.5 percent, but Fiserv projects its prices will fall 16 percent through the second quarter of 2011. The nation’s prices are expected to decline 7.1 percent during that time span, the firm reported.
Meanwhile, CoreLogic, a California-based research firm reported that Nevada home prices in September fell 6.86 percent when excluding foreclosures and other distressed sales. When including foreclosures, prices fell 3 percent from September 2009, the firm reported.
i have been saying this for ages yet people think i am mad, prices are nowhere near the bottom..
Apart from future factors such as interest rate rises, payback of all the bailouts, QE, etc
what this country needs is a real plan, if immigrants are allowed in to open a business to employ people, make it easier rather than harder, we need their money and their skills. The government could even sell visas for foreign nationals to invest in the USA for say $10,000 per visa a great money spinner
another great way to get money back into the dead system is legalize prostitutes and collect taxes rather than waste money on enforcing an old law which is not inline with current society
In short I would say let it keep on falling so people don't have to lie and the banks don't have to fudge numbers again. Doing this, people can take pride in home ownership.
Prices ARE near the bottom, and they're going to stay there for another 2-4 years. Yes,prices and sales may go up or down a little in any given month, but it's going to take time for the foreclosures to unwind, and for robustness to return to real estate markets.
This is poor research from a wisconsin research firm. I suggest
Las Vegas Sun: Nov 3 "MGM:Las Vegas market stabilizing, but mid tier resorts challange"
Marcus and Milchamp Commercial Real Estate
Third-Quarter 2010 Real Estate Investment Outlook
"Investors Go on the Offense- Improving capital markets spark renewed interest across property types"
Barron's Oct 27 "Viva Las Vegas Sands: Even Vegas Properties Did Well"
David Coooer
Realtors want us to think prices are rising,but Las Vegas isn't gaining jobs or people and this research seems objective.
Hi-rises and condos etc should do somewhat worse than Vegas as a whole but 2012 seems reasonable for a bottoming out.
William Clarke: I didn't "lie" to get my mortgage pre-boom in 2001 (neither did my mortgage broker who, BTW, is still in business). I didn't "lie" to get a pretty good rate. I didn't "fudge [any] numbers" to do this either. "Pride"? Oh yeah as I was the first one in my family to own a home.
Yet, thanks to financial crooks who get off scot-free because they have the politicians in their pockets (NOT because people who couldn't afford homes bought homes; I had no problem affording my home), I am now underwater in my home. Thanks in no small part to "short sales" and MBS and the like (not because of FANNY or FREDDY), I am now underwater in home.
Is there some lesson I'm supposed to learn from this? I mean, beyond "money talks", of course.
and the realtors say...
now is the perfect time to buy...
hee hee hee...
hoo hoo hoo...
haa haa haa...
listen up boys and girls...
if memory serves...
something like 8 out of every 10 homes in las vegas is under water...
HELLO!!!
wake up and smell the coffee...
the are many many many more foreclosures to come...
and the market will not bottom out until all of the foreclosures work there way thru the system...
and let's not forget...
there are something like 600,000 homes that are already foreclosed on, owned by the banks. and NOT YET on the market...
HELLO!!!
more pain ahead...
much more pain ahead...
just like all the experts said there would be a rebound in 2008, then 2009, then 2010.
until vegas wakes up, grows up, and gets some jobs going that pay more than $9.00 per hour, housing will never come back.
In my subdivision in Henderson, the foreclosures are increasing. One across the street, 2 more down the hill. Another really nice home 2 doors up has been in foreclosure since April, but the fools who paid $425,000 for it 5 years ago are still living in it. Gaming the system, I guess.
This downfall has a long way to go. Where it stops, nobody knows. Like roulette...
Try using these figures when submitting a bid on foreclosed and short sale properties and you'll see your offer rejected and a counter offer returned seeking the original asking price. Now who is being greedy here? Housing prices are still too high in Las Vegas on extremely distressed properties.
All of these reports use a little bit of crystal ball magic. The bottom line is the pain is still there and no one on the street thinks this is going to get better in the next year. If interest rates rise 1-2 points just add another 2-3 yrs to any recovery. At least that's what my magic 8 ball says.
but...but...my REALTOR said...
I don't get it, Dennis Williams. Price and value are relative to the marketplace. My parents bought their 1500 sq ft house here in 1968 for $30,000. Does that mean the the 1200 sq ft house I bought in Las Vegas for $92,000 in 1993 was "overvalued"?
Prices and values are set by the market, not by a comment on a news story.
The home price predictions quoted in this story are far more pessimistic than the leading local sources. Some national experts, not just Realtors, are also forecasting better Las Vegas home price performance than this.
The fact that nearly half of all existing homes sold here are being purchased with cash month after month suggests the "smart money" thinks Las Vegas real estate is a good investment. I put more faith in the opinion of thousands of cash buyers from all over the world.
Last year, in October, another out-of-state magician (Veros Real Estate Solutions) projected that the Reno market was the "weakest" in the country and projected the home values to decrease 12% over the next 12 months. The median value for SF homes in Washoe County by quarter in 2010 are $174,000, $175,000, and $175,000, with October coming in at $175,000.
Not learning from their mistakes in 2010, the same magician has now come out this October and reported that the Reno home values will drop another 7% over the year.
Based on the "actuals" in 2010, I no longer give credit to projections from sources outside Nevada.
hey gm...
"local experts"...
hee hee hee...
do tell...
who are these people...
the way i see it pal...
all the "local experts" quoted here and in the other town rag have been dead wrong...
dead wrong...
in fact...
i would suggest somebody go thru the archives and call these clowns out...
embarrass the crap out of them...
too bad flogging is illegal...
these clowns hurt many many thousands of people...
they should be ashamed of themselves...
as should the sun and the other rag for quoting the same wrong sources over and over again...
when it was clear to all they didn't have a damn clue...
or perhaps an ulterior motive...
so please...
stop the "local expert" crap...
i know of no such creature!!!
hey gm...
one other thing partner...
this so called "smart money"...
is it a good thing to have the house next door to you owned by someone from canada???
and what pray tell happens when the investors have their fill???
Another example of how much Harry Reid has done for Las Vegas.
Where is Harry Reid? Working on social issues instead of paying attention to the economy.
Of course, what else is new???
hey larry...
or should i call you one trick pony...
who has been wrong so many times i've lost track...
but i do admire your spunk...
you're like a weeble...
you might wooble...
but you always come back for more...
hee hee hee...
and yet, the city governments still approve new housing permits for these builders to keep building..if people are unemployed and NOT moving to LV, these houses will sit empty for a long time - on top of the inventory currently built..
markp is such a liberal doofus.
Incorrect. "Market values" are set, conveniently enough, by the market. If people don't pay, then prices adjust accordingly. Just because liar loans made it possible for many foolish people to, um, lie on their applications and buy more house than they were capable of affording doesn't change anything.
When you start talking about "intrinsic value" you introduce a concept that has little to do with market value. Something is worth what people will pay for it, and what people will pay is determined by how much they are willing to spend, ie market value.
hey james...
correct-a-mundo...
basic supply and demand...
period...
end of story...
excess demand feuled by liar loans drove prices up...
increased demand from investors kept prices from plummeting even further...
but eventually all those investors will get their fill...
and demand and prices will fall further...
especially when you have 15% unemployment...
not complicated...
It will be against the law to be a realtor in 2012. The will be Wanted Criminals!!! They should re-invent themselves and become the "REAL" Parasites that they are!
While this report is probably going to be looked at 2 years from now as reasonably accurate, It certainly doesn't make one who is thinking of buying want to jump in, If they know they can wait it out another year or 2 and get it for 20% or so less. It seems that now that the election is over, the "good news" various government agencies had recently reported in prices has suddenly vanished as new reports like this show otherwise. If I was in a buying mood, I certainly would sit it out another year and re evaluate if it's even time then. There is a bottom, but I don't think we're there yet.