How do you know now the right time to buy?
Current market conditions are a dwindling inventory of homes for sale and an increase in pending and contingent homes for sale. Avaialble listings have decreased from just over 28,000 homes for sale in January 2008 to just under 22,000 today. Homes under contract have increased from just over 1,800 to almost 7,000 in that same period. Sales are up well over 100% from this time last year. Properties that are competetively priced have recently been receiving multiple offers with many homes selling above asking price. Also banks have been witholding inventory from the market in order to stabilize pricing and have also been activetly pursuing loan modifications rather than foreclosure whenever possible thus reducing the supply of future repos. With the current foreclosure crisis still in swing and interest rates at historical lows, now is a great time to take advantage of a great but temporary buying opportunity where many homes are selling for less than replacement cost. See the reports below for details.
_______________________________________________________________________
Jun. 04, 2008
Copyright © Las Vegas Review-Journal
Homeowners, you can almost touch bottom
By JENNIFER ROBISON
REVIEW-JOURNAL
Are we there yet? Are we there yet? Are we there yet?
That's not just an endless series of queries from road-weary kids on summer vacation. It's also become the plaintive cry of local homeowners desperately seeking the bottom of a housing market that has shed more than 20 percent of its value in the last year.
Las Vegas homeowners could have their answer soon.
A Monday report, plus a few springtime indicators thrown in for good measure, hints that the city's housing market may be at or near its nadir.
The latest House Prices in America study from Massachusetts research firm Global Insight and Ohio bank-holding company National City Corp. showed Southern Nevada's first move toward housing-market undervaluation since the companies launched their joint report in 2004.
At $232,600 in the first quarter, the median home price in Las Vegas fell 3.1 percent below the value that historical market trends establish as sensible or healthy, the House Prices in America analysis said.
That's compared to the 22.9 percent overvaluation the market saw in the first quarter of 2007, when the median price came in at $286,100.
It's also down from the fourth quarter's $258,900 median price and 9.2 percent overvaluation.
At its highest point, in the third quarter of 2006, the Las Vegas market was overvalued by 30.4 percent.
Today's valuation statistics mean housing prices in Las Vegas have returned to their 23-year "historic norms" based on household income, population density, interest rates and other factors, said Richard DeKaser, chief economist for National City.
Las Vegas also placed well below several regional markets in its valuation ranking. Los Angeles, for example, remains 15.4 percent overvalued at its median price of $432,200.
Phoenix, with a median price of $224,900, is 20.2 percent overvalued, the report said. Salt Lake City is 16.1 percent overvalued at a median of $265,700. Reno has reached equilibrium, with its median price of $251,500 coming in at 0.2 percent below its historic norm.
"I would describe Las Vegas as a fairly valued market," DeKaser said. "It presents fair purchasing opportunities for home buyers. And if prices are fairly valued, I would think it's a reasonable time to buy, if you're making your decision based on whether you find an area attractive for family, friends, employment opportunities and climate. People should not be making these (buying) decisions based on the view that they're going to gain 20 percent a year for the next 20 years."
Despite the Las Vegas market's foray into negative historical-pricing territory, DeKaser stopped short of calling Las Vegas homes undervalued.
National City classifies the range between 15 percent above the pricing baseline and 15 percent below it as fairly valued, so the city has a way to go before it's positioned for significant appreciation jumps.
But Las Vegas no longer occupies a spot on National City's "watch list," a roster of markets risking price declines of 10 percent or more for two years or longer.
"One thing which is clear is that the majority of Las Vegas' price correction is now behind it," DeKaser said.
Local observers said the Global Insight/National City analysis makes sense.
Researchers at Sullivan Group Real Estate Advisors recently assessed where local new-home prices would be if the Las Vegas market had appreciated at normal rates of 5 percent to 7 percent a year since 2002. They found prices would be around $256,000, a difference of just a few thousand dollars compared with the $260,000 median new-home price industry researcher Hanley Wood shows now, said Ken Perlman, vice president of Sullivan Group.
That indicates a return to sustainable pricing trends.
"It's a positive sign that the market is headed in a direction where we might see some stabilization," Perlman said. "It suggests buying a home in Las Vegas is becoming more of a reasonable proposition. I do agree the biggest price declines are behind us."
Add local home builder Tom McCormick to the list of believers.
He comes armed with statistics: Las Vegas posted a 68 percent increase in resale closings from December to April. Median asking prices on existing homes stabilized at $230,000 in March and April. Resale inventory fell from 14 months to 11 months in April.
Such figures likely mean the faltering housing market will even out soon, he said.
"I know what it costs to build a home, and these homes can't be replaced at the prices they're being sold for. We builders have been arguing for a long time that we can't build homes at the prices they're being sold for. By definition, (the decline) can't go farther."
But analysts aren't so sure the price declines have ended.
Brian Gordon, a principal in local economic-research firm Applied Analysis, said he sees potential for additional value cuts. But future pricing declines probably would be "modest," Gordon said, and buyers who plan to live in their homes for a year or more are "less likely to be harmed by any additional devaluation."
"We're certainly approaching the bottom at this point."
Gordon's firm predicts the market will reach its low point by year's end. It'll "drag along the bottom" for six months to a year, with flat asking prices, and return to single-digit appreciation by late 2009 or early 2010.
Perlman said he also foresees a leisurely recovery pace. Sales could stay sluggish for several more months as buyers, spooked at the prospect of potential price drops, sit on the sidelines a little longer. And tightened credit markets for consumers looking to borrow remain a "wild card," he said.
DeKaser said his analysis can't forecast how much more local prices might fall, or when the valuation slide might stop.
But he did offer this general prognosis: "We're much closer to the bottom than the top."
Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.
LAS VEGAS HOME PRICES
House prices in Las Vegas have fallen into undervalued territory, according to new data from research firm Global Insight and bank National City Corp. It’s the first time in five years that statistics from the first quarter have shown undervalued housing prices here:
| First quarter of each year | |||||
| 2004 | 2005 | 2006 | 2007 | 2008 | |
| Local median price | $296,000 | $259,800 | $290,200 | $286,100 | $232,600 |
| Value change from historic norm |
+3.7% | +20.7% | +29.9% | +22.9% | -3.1% |
| Source: Global Insight/National City Corp. | |||||
Click the link below and VegasRepos.com will e-mail you a complete list of all properties meeting your search criteria.
FROM " In Business Las Vegas " - May 23 - 29 2008
| Real estate clouds clearing |
| By Brian Wargo / Staff Writer |
For the real estate industry, it's been comparable to getting rained on day after day with no end in sight. When it finally stops and the skies are sunny, there is a sense of relief and appreciation.
A pickup in home sales is behind the optimism: four straight months of higher sales than the month before, according to the Greater Las Vegas Association of Realtors. In April the 1,794 home sales on the Multiple Listing Service were 30 percent higher than April 2007, the first meaningful month-over-month gain amid the housing slowdown.
No one is expecting a boom, but there is a sense of hope in the real estate community that the bottom has been reached and the market is inching back up.
In the first quarter, transactions handled by Coldwell Banker Premier Realty were up 70 percent over the previous quarter and 20 percent above 2007's first quarter, said Bob Hamrick, president and chief executive of the Las Vegas brokerage. April transactions rose substantially over last year, and Hamrick said he expects an increase in the second quarter compared with 2007's quarter.
"There have been reports that the bottom has been hit," Hamrick said. "I can't guarantee this, but we can certainly see it from here. It's not with great velocity, but we are bouncing off it."
So far, May hasn't been as good as April, and Hamrick said the market may be at a "sloppy bottom," where there are monthly variations.
Properties owned by banks and other lenders continue to account for more than half of the homes being sold every month, and foreclosures and short sales have contributed to declining prices. But many foreclosures were sold after numerous offers were received.
"A property's true market value is $400,000, and it's listed for $375,000," Hamrick said. "There might be 10 to 15 offers on the property and it sells for $400,000 or $410,000. In some ways, it is back to a crazy market."
The $235,875 median price in April was 23 percent below the price in April 2007.
Demand has been pent up, with many buyers on the sidelines because of the credit crunch that hit in August and worries about buying into a market with falling prices. Some buyers are worried about missing out on an opportunity and are stepping in, brokers say.
"I don't think this is temporary," said Rick Shelton, the broker-owner of RE/MAX Associates. "It is definitely a warming trend. I won't call it a recovery yet, but people are getting a sense of the bargains on the market because of the vast amount of properties and decline in prices."
Most activity has been high end - exceeding $1.5 million - and homes for $250,000 or less, said Mark Stark, chief executive of Prudential Americana Group. He said his office's transactions were down during the first quarter, but April picked up 12 percent compared with April 2007.
High-end buyers aren't willing to pay $900,000 for a noncustom home that is only selling for that price because of appreciation, Stark said.
Thirty percent of buyers are using the Federal Housing Administration's federally insured loans that allow a 3 percent down payment. That has helped the entry-level market, brokers say.
"The middle range is the getting hit the hardest," Stark said. "The homes $400,000 to $900,000 are getting crushed."
The demand for more affordable homes has cut into agents' income, Stark said. It takes 1.5 transactions to earn the same amount as one transaction in the past, he said. That is evident in sales volume reported by the Realtors' group, which was down 5 percent in April compared with April 2007.
Century 21 JR in Henderson reported 40 sales in March, 10 more than in March 2007 and 45 sales in April, 12 more than a year ago.
"Pricing has definitely something to do with it," said Rosa Herwick, the broker-owner of Century 21 JR. "There is a larger percentage of buyers who can afford these prices."
The inventory of the homes between $200,000 and $300,000 is dwindling because of the strong demand and that should eventually fuel interest in the next level of homes, Herwick said.
A key will be the willingness of homeowners to cut prices to the point where they can attract buyers.
"The sellers have to become more realistic," Herwick said.
The Realtors' group reported about 23,000 single-family homes were on market at the end of April, and Hamrick suggested that level of inventory will scare off new-home construction for now. That will allow the inventory to be reduced even quicker and help any housing recovery.
No one can put a timetable on the recovery, which many expect to be aided with the opening of more resorts in 2009 and 2010 that will create jobs and bring more people into the city. For now, many are just happy that the latest numbers are trending up, not down.
Brian Wargo covers real estate and development 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.
Click the link below and VegasRepos.com will e-mail you a complete list of all properties meeting your search criteria.
Click Here to Request More Information
___________________________________________________________________
Another interesting article came out in the business section Las Vegas Review Journal. While not entirely positive, it does point to the bottom of the housing cycle. It also supports what I've been seeing in the market lately which is a definite pick up in home sales and a decrease in available listings. Since January the available inventory has fallen from just over 28,000 in greater Las Vegas to just over 22,000 today. What is more telling is that homes in Contingent and Pending status ( which are homes under contract in escrow and a sign of future closings ) is up from just over 1,800 in January to over 6,200 today. Therefore with a declining inventory and many homes selling from $70 a square foot ( well below replacement cost ) now is a great time to buy.
If you'd like specific listings meeting your search criteria feel free to contact me.
"The nation's foreclosure hemorrhage slowed in April as both pre foreclosure filings and bank repossessions declined from the previous month,
"The sky isn't falling, and the bottom of the housing market is in sight," Alexis McGee said."
Attached below is an article out of the Las Vegas Review-Journal newspaper about the current state of the Las Vegas housing market. The article talks about decreasing supply yet increasing demand which is what I've been seeing as well. This is a positive indicator that the housing market in Las Vegas is at the bottom. If you're thinking about buying real estate in the Las Vegas area now is a great time with many homes available at very affordable prices. Condos starting in the 90's and single family homes in the low 100's. These are prices that we have not seen for years. If you'd like specific information on real estate meeting your search criteria, feel free to contact me and I'd be happy to assist you.
Another article from the Las Vegas Review Journal has some interesting statistics pointing to the bottom of the housing downturn in Las Vegas. Sales and activity are up significantly as many people that have been waiting to buy are now jumping into the market.
If you're looking to buy property in Southern Nevada now is the best time to do so. Contact me for specifics on what you're looking for.
"...we don't anticipate that prices can get much lower because homes are now selling for less than what it would cost to build that same home today."
"Statistics show that sales increased by nearly 35 percent..."
"Kelley said that local real estate transactions tracked through the MLS during March totaled more than $450 million of sales volume, up 38 percent from last month."
Click the link below and VegasRepos.com will e-mail you a complete list of all properties meeting your search criteria.
Click Here to Request More Information
_______________________________________________________________________
In Business Las Vegas Paper
They talk about the current condition of the Las Vegas housing market and is in line with what I've been seeing lately. That is home prices bottoming out and even starting to increase. I'm having many buyers having difficulty getting homes under contract as we're seeing multiple offers on most properties often above list price.
Homes in escrow ( under contract ) have increased from 1,800 in January to close to 6,000 today all the while the available inventory is steadily decreasing.
With homes now selling for below replacement cost, I believe that we are now at a great time to buy while the foreclosure crisis is still here. With the influx of an estimated 300,000 - 400,000 residents coming into Las Vegas in the next 3 - 5 years and very little new home permitting, there will certainly be a strong rebound and even housing shortage by 2009.
If you are thinking about buying now is definitely the time. Condo/ town homes are starting in the low 100's and single family detached homes can be found for under $150,000. Contact me for specific details.
"Some analysts and builders have suggested that the best time to buy a new home may have already passed. Builders had been offering both discounted prices and incentives, but with inventories whittled to next to nothing, some builders are dropping incentives such as paying for closing costs and upgrades and focusing on low prices."
"I think this is the bottom, and if you don't go out and buy now, you can't expect it to get any better," Home Builders Research President Dennis Smith said.
"So what do you see happening?
As demand exceeds supply - we have had fewer than 400 permits a month in seven of the last eight months - and yet we closed about 1,000 homes a month. That is eating up all of our supply, and we are not putting any new supply in. They call it the law of economics for a reason. When supply is gone, but demand is here and population grows and jobs come - if you don't have to offer the incentives, you won't. You are seeing more and more builders do that now. I just went to their sales office and they said they got rid of their incentives. There were no closing costs and credits. We just have a rock-bottom price and when we start selling this product, our rock-bottom price will start to disappear, too.
Has the best time to buy a new home passed?
My argument is that it has passed because if you look at builders, we have fewer than a thousand finished homes in the market right now and most neighborhoods have maybe one, two or three and they are usually on a challenged lot or less popular plans in the neighborhood."
"How do you see your industry in Las Vegas?
When you look at homebuilding, (it) is always driven by two things. It is population growth and job growth, and a lot of people will lump them into one, but it is really not one because if you are getting retirees, they don't need jobs but they may move here with our tax climate and wonderful weather. If you read the projections through 2010 - and I believe we are supposed to have 125,000 jobs created here - and with the historical trend of 2.5 people per job, then you are looking at 300,000 to 400,000 new residents coming to town."
How quickly will this happen? Will there be another boom?
That is anybody's guess, but it is hard to imagine that if you are adding 35 percent to our room inventory, we are not going to see tremendous demand. We are already absorbing all the foreclosures that have happened, and builders have stopped permitting homes. How long does it take to burn off these foreclosures is anyone's guess, but when you look at the fact that we are selling so many and banks are getting multiple offers on them now, I talk to people who are typically residential real estate investors and they are telling me, one on one, they are making offers on homes and someone always outbids them or they can't find a quality foreclosure.
What do you see the rest of this year and into 2009?
It is hard for me to believe that permitting stays at this level. If we keep bringing in the 4,000 to 6,000 people a month and we continue to work the MLS numbers down, there is a buyer out there for neighborhoods like ours that are different. It is hard to imagine that we keep permitting that 300 to 400 homes a month. During the boom, we were permitting 3,000 homes a month. We've got to go back up. Even if we got back to a historical average of 2002 and 2003 when we were running 20,000 homes a year, that is 1,600 a month. If we get up to 1,000, that is three times as many as we have now. That is why I believe the bottom has come and gone, because if all of a sudden I have demand for three times as many homes, I am going to cut back incentives. I am not going to sell below replacement costs because when I go back to the old world of I got to buy land to replace the land I am selling and pay a certain price for it, why would I give away this? This workforce housing issue hasn't gone away.
Do you believe there will be a workforce housing shortage in 2009 as suggested by a study done for the Southern Nevada Home Builders Association?
I am sure of it. I think that by 2009 we will be talking about, and all the employers are already talking about, "Where are we going to house these people who are coming to town?" If you look at the mix of what is selling right now, the lowest-priced homes are selling the most and that makes sense. You don't have house-to-sell contingencies, ample financing through the FHA and VA programs. Eighty percent of our homes are using FHA and VA loans right now. The stuff we are selling off quickest is the workforce housing. There is no workforce housing coming to market. The workforce is going to have to go into apartments and older, used homes. Builders are not going to have the land left any more to provide the $200,000 home.
"While home prices are still declining, down 20.3 percent from a year ago, Kelley said she doesn't expect them to go much lower because they're now selling for less than what it would cost to build that same home today.
She said foreclosure homes are getting multiple offers. It's taking longer for banks to approve sales and for buyers to close escrow.
"It's starting to become a feeding frenzy," Kelley said. "The banks, the title and escrow companies are backed up. They laid off all their people and now they don't have the staff to handle the volume. We could get foreclosures and short sales out of the inventory. We have buyers coming back, but the banks can't act fast enough."
"Distressed property sales are among the greatest opportunities in Las Vegas right now, Jeremy Aguero of Applied Analysis said."
"Sharks are swimming around the blood," he said at an economic forum last week.
Click the link below and VegasRepos.com will e-mail you a complete list of all properties meeting your search criteria.
