QUESTION:
My broker says now is the time to buy real estate because prices are low, mortgage rates are down, and it will soon be difficult to finance a property with less than 20 percent down. Why will it become hard to get loans with little down?
ANSWER:
There's been considerable confusion about this, so let's try to straighten it out.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act lenders are allowed to make whatever mortgages they like. However, if they make mortgages with certain characteristics - say, with fully documented loan applications and points and fees equal to no more than 3 percent of the loan amount - they then get certain benefits such as less liability and no need to set aside 5 percent of the loan amount in a reserve fund.
Dodd-Frank also says that loans within the "safe harbor" created to protect lenders from liability must have 20 percent down. But - and here's the part you don't hear too much about - there are huge exceptions. For instance, the 20-percent rule does not apply to FHA or VA financing, conventional loans sold to Fannie Mae and Freddie Mac or loans that lenders keep in portfolio.
The question is this: Who would benefit if mortgages with little money down were increasingly unavailable? Not sellers. Fewer sales would mean lower prices. Not lenders. They would originate fewer loans and lose substantial business. Not servicers. They would have less to manage on behalf of mortgage investors. Not real estate brokers. They would have fewer homes to sell. Not states and local communities. With fewer real estate transactions their tax collections would plummet.
There's now an effort to raise the FHA down payment from 3.5 percent to 5 percent and exchange Fannie Mae and Freddie Mac for institutions from the private sector. But even if we make changes, borrowers will still want loans with little down, and, as a matter of self-interest lenders, brokers and government will still want to make sure that such financing is available with far less than 20 percent down.
for more information about bank own homes in las vegas please visit www.buybankownhomes.com
Sunday, July 24, 2011
The Right Season For Home Sale
Trying to time the market and determine the perfect home selling season can be a risky strategy, especially in the current real estate climate of buyer uncertainty.
Conventional wisdom holds that wintertime is the worst season in which to put a "for sale" sign up. But that may not be true, for example, in warmer Southwestern states. And the peak of summer, when foliage is robust and sunshine-graced curb appeal is high, may not necessarily be prime home showing time in areas like Florida and Arizona, where prospective sellers may choose to vacation out of state to escape the heat.
"In the past, there have been peak selling seasons that vary, depending on who you speak to," says Lisa Johnson Sevajian, with Coldwell Banker in Andover, says. "Many believe the spring market starts in May when in fact spring time buyers usually start looking in February. Others believe no one buys houses in December, which is completely untrue. Buyers who are trudging through snow are far more serious than causal springtime lookers."
Overall, it's important to consider that seasonality can fluctuate from market to market. In the northeast, the spring market brings the highest demand, says Greg Rand, host of the "Rand on Real Estate" radio program on 77 WABC Radio in New York.
If you need to sell quickly, it's probably not best to wait out the weather for a better time of year. However, if you live in a cold climate, it's often better to wait out the winter and list your home in the early spring because, if it doesn't sell relatively quickly, it will be considered "tired inventory" by the time spring rolls around, says Bill Golden, with RE/MAX Metro Atlanta Cityside.
Ultimately, in the current market, the longer you wait to list, the lower your sales price may turn out to be. Waiting for prime selling season could eat up the anticipated profit you hope to gain due to a specific season. And homes priced right for the market will usually sell fast, regardless of Mother Nature
If you want to short sale your house please visit www.buybankownhomes.com
Conventional wisdom holds that wintertime is the worst season in which to put a "for sale" sign up. But that may not be true, for example, in warmer Southwestern states. And the peak of summer, when foliage is robust and sunshine-graced curb appeal is high, may not necessarily be prime home showing time in areas like Florida and Arizona, where prospective sellers may choose to vacation out of state to escape the heat.
"In the past, there have been peak selling seasons that vary, depending on who you speak to," says Lisa Johnson Sevajian, with Coldwell Banker in Andover, says. "Many believe the spring market starts in May when in fact spring time buyers usually start looking in February. Others believe no one buys houses in December, which is completely untrue. Buyers who are trudging through snow are far more serious than causal springtime lookers."
Overall, it's important to consider that seasonality can fluctuate from market to market. In the northeast, the spring market brings the highest demand, says Greg Rand, host of the "Rand on Real Estate" radio program on 77 WABC Radio in New York.
If you need to sell quickly, it's probably not best to wait out the weather for a better time of year. However, if you live in a cold climate, it's often better to wait out the winter and list your home in the early spring because, if it doesn't sell relatively quickly, it will be considered "tired inventory" by the time spring rolls around, says Bill Golden, with RE/MAX Metro Atlanta Cityside.
Ultimately, in the current market, the longer you wait to list, the lower your sales price may turn out to be. Waiting for prime selling season could eat up the anticipated profit you hope to gain due to a specific season. And homes priced right for the market will usually sell fast, regardless of Mother Nature
If you want to short sale your house please visit www.buybankownhomes.com
Real estate executive keeps eyes on future, heart in deals
By Hubble Smith
LAS VEGAS REVIEW-JOURNAL
Posted: Jul. 24, 2011 | 2:00 a.m.
Cathy Jones admits she doesn't have a great head for numbers. That's why she uses a calculator.
Nonetheless, she's a shrewd number cruncher.
Jones, a certified public accountant with a bachelor's degree from Ohio State University, founded Sun Commercial Real Estate in 2006, just before the start of the recession. She has survived the steepest real estate market downturn in Las Vegas history. She doubled her staff from five to 10, including three new hires in July.
"I think we've become market experts in office, retail, industrial and land," Jones said at Sun Commercial's office in the Park at Spanish Ridge, near the Las Vegas Beltway and Russell Road. "We're asked to provide a broker's price opinion all the time for banks and special servicers.
"I think what we do that's a step above the competition is a full-blown, discounted cash-flow analysis for our clients," she said. "It's very comprehensive."
Jones provided a broker's opinion of value on several commercial properties in Las Vegas for LNR Partners, the company that held the $1 billion commercial real estate auction here in May.
Sun Commercial has negotiated more than $650 million in commercial real estate sales and lease transactions, including about $30 million this year, Jones said. About 80 percent of current transactions involve distressed properties, either bank-owned or in default.
The company's scope of services includes buyer and seller representation; investment sales; acquisitions and dispositions; property management; asset valuation; and market research.
When she's not brokering deals, Jones enjoys horseback riding and equestrian jumping with her Dutch warmblood, Maple.
"She's a bad-ass girl," Jones said.
Question: What brought you to Las Vegas?
Answer: I took an auditor job with Deloitte, Haskins and Sells at that time. I interviewed in both Phoenix and Las Vegas.
Question: And you were living in Phoenix. Was it hard to leave?
Answer: When I moved to Phoenix, it was a very welcoming town. When I moved here, people I worked with were friendly, but they were very private. Come the weekend, you didn't have people opening up their homes and inviting you over. It's a challenging city for a young, single woman to move here.
Question: What kept you here for 30 years?
Answer: I enjoyed the people I met and I enjoyed the fact that Las Vegas provides a unique opportunity for businesspeople to make a difference through volunteer work and being actively involved with organizations. I've been involved with the United Way as treasurer and chairman. Even though the city is large, the business community is small. In a larger community, it's harder to get involved. From a career and business standpoint, you're in a position to reach out and meet people at all levels in the business community. It's harder to meet with the president of banks and large firms in big cities.
Question: What's the most fascinating part of your job?
Answer: I'm a transaction junkie. I love working on transactions. Every transaction is different and unique. And I enjoy the clients. One of the things that sets our company apart is our focus on long-term relationships, not just the deal, and that's very important to us. Seventy percent of our business is repeat, which is really high. People understand we're there for the long term. Sometimes we recommend not doing a deal because of the timing not being right.
Question: What trends do you see in commercial real estate? Will we ever recover?
Answer: I do feel we're bouncing along the bottom as everyone says. There's a lot of money looking at Las Vegas for long-term potential just because the price point to acquire property is at such a low. Most of the buyers are what we call value-add clients. They buy properties with higher vacancy and they spend the next one to three years stabilizing them and look to sell down the road or hold for a while.
Question: What advice would you give someone starting out in commercial real estate?
Answer: The most important thing is to pick the right (brokerage) team to work with so you get deep experience. Don't be in a hurry to get out and form your own team. Get some experience under your belt working with a team to provide you with a good foundation.
Question: What do they need to learn?
Answer: The skill sets you have to have are very good people skills. You have to be a good listener. You have to have an aptitude for numbers. In commercial, you have to be able to analyze the numbers and be comfortable with contracts. You have to be able to read and understand contracts.
Question: Who taught you about the business?
Answer: Terry Wright at Nevada Title Co. My experience at Nevada Title was very significant in my success. I had financial experience, but the contracts, the people skills ... Terry Wright really mentored me on people skills on client calls.
Question: Will we continue to struggle with commercial mortgage defaults in Las Vegas?
Answer: There's still a large issue with CMBS (commercial mortgage-backed securities). We've only touched the tip of the iceberg, I'm afraid. A lot of those loans will come due in the next two or three years and the value is not there to refinance. That's going to be a continuing problem, not because borrowers are delinquent, but because the loans come due.
Question: What about workouts with the banks? Are they willing to extend or alter the terms of the loan to avoid foreclosure?
Answer: I haven't seen a lot of workouts. I do feel like lenders are working harder to work out a short sale with the owner where the lender shares in the loss of value. I know CMBS lenders will work on them for a year before they decide to foreclose. Borrowers were able to bid on their own properties at the (LNR) auction. Who's going to pay more for the property than the borrower?
Question: How tough is it to get financing these days?
Answer: Banks are starting to do some financing again. Their underwriting requirements are so stringent, so it makes it more challenging and they're definitely giving no special deals. It's 75 percent loan to value, whereas it used to be 85 percent, and they're going with market interest rates.
Question: Who's lending?
Answer: Life insurance companies, pension funds and believe it or not, some of the CMBS is in play again. There's a lot of private money and institutional money.
Question: If you weren't in commercial real estate or finance, what else might you have liked to do for a living?
Answer: Money's not an object? I'd like to train horses for jumping and show.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491
for free las vegas bank own homes search please visit
http://www.buybankownhomes.com
LAS VEGAS REVIEW-JOURNAL
Posted: Jul. 24, 2011 | 2:00 a.m.
Cathy Jones admits she doesn't have a great head for numbers. That's why she uses a calculator.
Nonetheless, she's a shrewd number cruncher.
Jones, a certified public accountant with a bachelor's degree from Ohio State University, founded Sun Commercial Real Estate in 2006, just before the start of the recession. She has survived the steepest real estate market downturn in Las Vegas history. She doubled her staff from five to 10, including three new hires in July.
"I think we've become market experts in office, retail, industrial and land," Jones said at Sun Commercial's office in the Park at Spanish Ridge, near the Las Vegas Beltway and Russell Road. "We're asked to provide a broker's price opinion all the time for banks and special servicers.
"I think what we do that's a step above the competition is a full-blown, discounted cash-flow analysis for our clients," she said. "It's very comprehensive."
Jones provided a broker's opinion of value on several commercial properties in Las Vegas for LNR Partners, the company that held the $1 billion commercial real estate auction here in May.
Sun Commercial has negotiated more than $650 million in commercial real estate sales and lease transactions, including about $30 million this year, Jones said. About 80 percent of current transactions involve distressed properties, either bank-owned or in default.
The company's scope of services includes buyer and seller representation; investment sales; acquisitions and dispositions; property management; asset valuation; and market research.
When she's not brokering deals, Jones enjoys horseback riding and equestrian jumping with her Dutch warmblood, Maple.
"She's a bad-ass girl," Jones said.
Question: What brought you to Las Vegas?
Answer: I took an auditor job with Deloitte, Haskins and Sells at that time. I interviewed in both Phoenix and Las Vegas.
Question: And you were living in Phoenix. Was it hard to leave?
Answer: When I moved to Phoenix, it was a very welcoming town. When I moved here, people I worked with were friendly, but they were very private. Come the weekend, you didn't have people opening up their homes and inviting you over. It's a challenging city for a young, single woman to move here.
Question: What kept you here for 30 years?
Answer: I enjoyed the people I met and I enjoyed the fact that Las Vegas provides a unique opportunity for businesspeople to make a difference through volunteer work and being actively involved with organizations. I've been involved with the United Way as treasurer and chairman. Even though the city is large, the business community is small. In a larger community, it's harder to get involved. From a career and business standpoint, you're in a position to reach out and meet people at all levels in the business community. It's harder to meet with the president of banks and large firms in big cities.
Question: What's the most fascinating part of your job?
Answer: I'm a transaction junkie. I love working on transactions. Every transaction is different and unique. And I enjoy the clients. One of the things that sets our company apart is our focus on long-term relationships, not just the deal, and that's very important to us. Seventy percent of our business is repeat, which is really high. People understand we're there for the long term. Sometimes we recommend not doing a deal because of the timing not being right.
Question: What trends do you see in commercial real estate? Will we ever recover?
Answer: I do feel we're bouncing along the bottom as everyone says. There's a lot of money looking at Las Vegas for long-term potential just because the price point to acquire property is at such a low. Most of the buyers are what we call value-add clients. They buy properties with higher vacancy and they spend the next one to three years stabilizing them and look to sell down the road or hold for a while.
Question: What advice would you give someone starting out in commercial real estate?
Answer: The most important thing is to pick the right (brokerage) team to work with so you get deep experience. Don't be in a hurry to get out and form your own team. Get some experience under your belt working with a team to provide you with a good foundation.
Question: What do they need to learn?
Answer: The skill sets you have to have are very good people skills. You have to be a good listener. You have to have an aptitude for numbers. In commercial, you have to be able to analyze the numbers and be comfortable with contracts. You have to be able to read and understand contracts.
Question: Who taught you about the business?
Answer: Terry Wright at Nevada Title Co. My experience at Nevada Title was very significant in my success. I had financial experience, but the contracts, the people skills ... Terry Wright really mentored me on people skills on client calls.
Question: Will we continue to struggle with commercial mortgage defaults in Las Vegas?
Answer: There's still a large issue with CMBS (commercial mortgage-backed securities). We've only touched the tip of the iceberg, I'm afraid. A lot of those loans will come due in the next two or three years and the value is not there to refinance. That's going to be a continuing problem, not because borrowers are delinquent, but because the loans come due.
Question: What about workouts with the banks? Are they willing to extend or alter the terms of the loan to avoid foreclosure?
Answer: I haven't seen a lot of workouts. I do feel like lenders are working harder to work out a short sale with the owner where the lender shares in the loss of value. I know CMBS lenders will work on them for a year before they decide to foreclose. Borrowers were able to bid on their own properties at the (LNR) auction. Who's going to pay more for the property than the borrower?
Question: How tough is it to get financing these days?
Answer: Banks are starting to do some financing again. Their underwriting requirements are so stringent, so it makes it more challenging and they're definitely giving no special deals. It's 75 percent loan to value, whereas it used to be 85 percent, and they're going with market interest rates.
Question: Who's lending?
Answer: Life insurance companies, pension funds and believe it or not, some of the CMBS is in play again. There's a lot of private money and institutional money.
Question: If you weren't in commercial real estate or finance, what else might you have liked to do for a living?
Answer: Money's not an object? I'd like to train horses for jumping and show.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491
for free las vegas bank own homes search please visit
http://www.buybankownhomes.com
New and improved Web site launched
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If you or someone you konows is having financial difficulty and want to short sale the house in las vegas , please visit this web site and you will get a lot of helpful information for short selling your house.
Sunday, June 12, 2011
Turnaround specialist hired for Nevada real estate fund
The CEO of a troubled Southern Nevada real estate investment trust has resigned and a Chicago company has been hired to manage the firm.
Desert Capital REIT Inc. of Henderson on Monday disclosed the resignation of CEO Todd Parriott and the hiring of MorrisAnderson & Associates Ltd. to manage the company and assist it in preparing a reorganization plan.
Desert Capital, a hard money lender and investor in real estate and mortgages, was hit with an involuntary bankruptcy petition on April 29 by lenders owed $43.7 million.
Under the deal with MorrisAnderson, a managing director there, David Bagley, was appointed president and chairman of the board of Desert Capital.
MorrisAnderson is a consulting firm for distressed and underperforming companies and Bagley is a turnaround specialist there.
Desert Capital, which has seen its fortunes decline amid the worst economic downturn in memory in Southern Nevada, with many of its borrowers defaulting on loans, lost $1.947 million in the first quarter.
At the end of the first quarter, it reported liabilities of $55.7 million vs. assets of $25.1 million.
Parriott, in the meantime, also ran CM Capital Services, formerly known as Consolidated Mortgage Co. LLC. In March it agreed to pay a $200,000 fine for lending violations under a settlement with the state.
CM Capital Services, which originated loans and serviced them for Desert Capital, in March also was not able to comply with the solvency requirements of that settlement agreement and forfeited its mortgage license to the state.
That forced it to cease its loan origination business.
www.buybankownhomes.com
Desert Capital REIT Inc. of Henderson on Monday disclosed the resignation of CEO Todd Parriott and the hiring of MorrisAnderson & Associates Ltd. to manage the company and assist it in preparing a reorganization plan.
Desert Capital, a hard money lender and investor in real estate and mortgages, was hit with an involuntary bankruptcy petition on April 29 by lenders owed $43.7 million.
Under the deal with MorrisAnderson, a managing director there, David Bagley, was appointed president and chairman of the board of Desert Capital.
MorrisAnderson is a consulting firm for distressed and underperforming companies and Bagley is a turnaround specialist there.
Desert Capital, which has seen its fortunes decline amid the worst economic downturn in memory in Southern Nevada, with many of its borrowers defaulting on loans, lost $1.947 million in the first quarter.
At the end of the first quarter, it reported liabilities of $55.7 million vs. assets of $25.1 million.
Parriott, in the meantime, also ran CM Capital Services, formerly known as Consolidated Mortgage Co. LLC. In March it agreed to pay a $200,000 fine for lending violations under a settlement with the state.
CM Capital Services, which originated loans and serviced them for Desert Capital, in March also was not able to comply with the solvency requirements of that settlement agreement and forfeited its mortgage license to the state.
That forced it to cease its loan origination business.
www.buybankownhomes.com
Las Vegas land prices down 83 percent from 2007 peak, report says
Land transactions remain scarce in Las Vegas, but when deals get done, the price apparently has yet to find its bottom.
Las Vegas-based Applied Analysis reported the price paid for vacant land during the first quarter fell to an average of $156,700 an acre outside the resort corridor.
That’s a decline of 6.3 percent since the fourth quarter, when it was $167,276 per acre, and down 14.1 percent from the first quarter of 2010 when it was $182,461 per acre.
Since the peak of the market in the fourth quarter of 2007, land prices have fallen by 83.3 outside the resort corridor, the firm reported.
Applied Analysis Principal Brian Gordon said the oversupply on the market in all real estate sectors continues to put downward pressure on new construction and ultimately the need for land.
High vacancy rates in commercial properties and limited residential construction are expected to limit the demand for land.
The land acquisitions have tended to be by speculative investors with a long-term investment outlook, he said. With property changing hands through distressed sales, that will further decrease prices, he said.
Applied Analysis said 442 acres was sold in the first quarter, up from 421 in the fourth quarter but down from 526 acres in the first quarter of 2010.
That includes 11 acres in the resort corridor sold during the first quarter. The three-parcel property adjacent to the Hard Rock Hotel on Paradise Rose sold for $2.1 million per acre through a deed in lieu of foreclosure.
More than three-quarters of the transactions in the first quarter represented distressed sales, Applied Analysis reported. Lender foreclosures accounted for 56.4 percent of the properties changing hands. Traditional sales accounted for 21.9 percent. The rest were deeds in lieu of foreclosure, quitclaim deeds and special warranty deeds.
www.buybankownhomes.com
Las Vegas-based Applied Analysis reported the price paid for vacant land during the first quarter fell to an average of $156,700 an acre outside the resort corridor.
That’s a decline of 6.3 percent since the fourth quarter, when it was $167,276 per acre, and down 14.1 percent from the first quarter of 2010 when it was $182,461 per acre.
Since the peak of the market in the fourth quarter of 2007, land prices have fallen by 83.3 outside the resort corridor, the firm reported.
Applied Analysis Principal Brian Gordon said the oversupply on the market in all real estate sectors continues to put downward pressure on new construction and ultimately the need for land.
High vacancy rates in commercial properties and limited residential construction are expected to limit the demand for land.
The land acquisitions have tended to be by speculative investors with a long-term investment outlook, he said. With property changing hands through distressed sales, that will further decrease prices, he said.
Applied Analysis said 442 acres was sold in the first quarter, up from 421 in the fourth quarter but down from 526 acres in the first quarter of 2010.
That includes 11 acres in the resort corridor sold during the first quarter. The three-parcel property adjacent to the Hard Rock Hotel on Paradise Rose sold for $2.1 million per acre through a deed in lieu of foreclosure.
More than three-quarters of the transactions in the first quarter represented distressed sales, Applied Analysis reported. Lender foreclosures accounted for 56.4 percent of the properties changing hands. Traditional sales accounted for 21.9 percent. The rest were deeds in lieu of foreclosure, quitclaim deeds and special warranty deeds.
www.buybankownhomes.com
Las Vegas home sales, prices notch rebound in May
Southern Nevada home prices and sales rebounded slightly in May, according to statistics released today by the Greater Las Vegas Association of Realtors.
The 3,111 sales of single-family homes were about 1 percent higher than April and nearly 8 percent higher than May 2010. The median price registered a rare monthly increase, going from $125,000 to $126,000, but it’s still more than 11 percent below where it was a year ago.
Many housing analysts, however, aren’t expecting the increase to be a trend. Prices are expected to continue to decline because of foreclosures coming into the market.
GLVAR President Paul Bell said any increase is welcome news and points out that what happened in the single-family sector also occurred with town homes and condos.
“One month doesn’t constitute a trend, but it’s certainly welcome news to our members and most homeowners to see more homes selling at slightly higher prices,” Bell said.
Bank-owned homes accounted for 43.8 percent of all existing homes sales in May, down from 46.3 percent in April. Short sales also fell from 23.8 percent in April to 23 percent in May.
“It’s a gradual trend, but it certainly is an improvement over what we’ve been seeing,” Bell said of the increase in traditional sales. Those homes fetch higher prices than foreclosures, he said.
The number of town homes and condominiums sold in May was 880, up 7.6 percent over April and 14.4 percent over May 2010.
The median price of those units was $62,750 in May, up 4 percent over April but down 12.8 percent from May 2010.
Some 51.4 percent of all existing homes sold in Southern Nevada in May were purchased with cash, down from 51.9 percent in April.
The number of single-family home listings at the end of May was 22,767, a 1.4 percent increase over April. More than 11,000 homes remain on the market without offers with a median asking price at $135,000.
The market recorded 5,055 new single-family home listings in May, a 3.7 percent increase over April and 15.1 percent increase over May 2010.
The total dollar value of single-family homes sold in May was $491.4 million, a 0.3 percent increase over April. Condo sales totaled $76.2 million, an 11.9 percent increase over April.
The GLVAR tracks sales of new and existing homes on the Multiple Listing Service in Clark, Nye, Lincoln and White Pine counties
The 3,111 sales of single-family homes were about 1 percent higher than April and nearly 8 percent higher than May 2010. The median price registered a rare monthly increase, going from $125,000 to $126,000, but it’s still more than 11 percent below where it was a year ago.
Many housing analysts, however, aren’t expecting the increase to be a trend. Prices are expected to continue to decline because of foreclosures coming into the market.
GLVAR President Paul Bell said any increase is welcome news and points out that what happened in the single-family sector also occurred with town homes and condos.
“One month doesn’t constitute a trend, but it’s certainly welcome news to our members and most homeowners to see more homes selling at slightly higher prices,” Bell said.
Bank-owned homes accounted for 43.8 percent of all existing homes sales in May, down from 46.3 percent in April. Short sales also fell from 23.8 percent in April to 23 percent in May.
“It’s a gradual trend, but it certainly is an improvement over what we’ve been seeing,” Bell said of the increase in traditional sales. Those homes fetch higher prices than foreclosures, he said.
The number of town homes and condominiums sold in May was 880, up 7.6 percent over April and 14.4 percent over May 2010.
The median price of those units was $62,750 in May, up 4 percent over April but down 12.8 percent from May 2010.
Some 51.4 percent of all existing homes sold in Southern Nevada in May were purchased with cash, down from 51.9 percent in April.
The number of single-family home listings at the end of May was 22,767, a 1.4 percent increase over April. More than 11,000 homes remain on the market without offers with a median asking price at $135,000.
The market recorded 5,055 new single-family home listings in May, a 3.7 percent increase over April and 15.1 percent increase over May 2010.
The total dollar value of single-family homes sold in May was $491.4 million, a 0.3 percent increase over April. Condo sales totaled $76.2 million, an 11.9 percent increase over April.
The GLVAR tracks sales of new and existing homes on the Multiple Listing Service in Clark, Nye, Lincoln and White Pine counties
that sold for $30 million fetches $4.4 million after foreclosure
A 23.53-acre property at the Las Vegas Beltway and Hacienda Avenue that sold for $30.2 million in 2007 and was later foreclosed upon has been sold for $4.4 million.
Lightstone Acquisitions, part of the Lightstone Group, a New York-based real estate investment company, acquired the property from City National Bank. It plans to hold the property as an investment, said Michael Stuart, a broker with Colliers International Las Vegas, who represented City National along with Scott Heaton.
Icon Real Estate Services of Las Vegas sold the property for $30.2 million to Newport Beach developer Dominic Magliarditi, who planned a mixed-use development when he bought it in November 2007, Stuart said.
The property is next to the Tropicana Beltway Center, a 600,000-square-foot regional shopping center.
www.buybankownhomes.com
Lightstone Acquisitions, part of the Lightstone Group, a New York-based real estate investment company, acquired the property from City National Bank. It plans to hold the property as an investment, said Michael Stuart, a broker with Colliers International Las Vegas, who represented City National along with Scott Heaton.
Icon Real Estate Services of Las Vegas sold the property for $30.2 million to Newport Beach developer Dominic Magliarditi, who planned a mixed-use development when he bought it in November 2007, Stuart said.
The property is next to the Tropicana Beltway Center, a 600,000-square-foot regional shopping center.
www.buybankownhomes.com
Real Estate in Crisis
The subprime mortgage crisis is hitting the Las Vegas metro area particularly hard. In fact, Nevada has the highest foreclosure rate in the country and the metro area is consistently one of the top five worse in the nation. The crisis jeopardizes further growth by creating an overflow of available homes, which in turn slows the construction of new homes and invariably effects property values. But at the same time it creates opportunities of more affordable housing for those who have been priced out of the market in recent years.
The crisis entails homeowners losing their houses after they are unable to afford their mortgage payment. It was brought about by lenders and banks giving risky loans, or subprime mortgages, to people with poor credit scores or finances. Low interest rates first attracted such homebuyers. However, as many loans were adjustable rate mortgages (ARMs), higher interest rates down the road made payments nearly impossible, ultimately leading to foreclosure. Furthermore, predatory lenders have been accused of perpetuating the situation by unfairly taking advantage of uninformed or new buyers. There were a large number of investors who bought homes at the height of the market and expected to flip them for a profit, only to see values decline.
www.buybankownhomes.com
The crisis entails homeowners losing their houses after they are unable to afford their mortgage payment. It was brought about by lenders and banks giving risky loans, or subprime mortgages, to people with poor credit scores or finances. Low interest rates first attracted such homebuyers. However, as many loans were adjustable rate mortgages (ARMs), higher interest rates down the road made payments nearly impossible, ultimately leading to foreclosure. Furthermore, predatory lenders have been accused of perpetuating the situation by unfairly taking advantage of uninformed or new buyers. There were a large number of investors who bought homes at the height of the market and expected to flip them for a profit, only to see values decline.
www.buybankownhomes.com
Las Vegas housing market fluctuating
By Hubble Smith
LAS VEGAS REVIEW-JOURNAL
Posted: Jun. 3, 2011 | 2:00 a.m.
The housing market is going through a "catfish recovery," finding the bottom and then coming up for air before going down again, market analyst Scott Sambucci of San Francisco-based Altos Research said Thursday.
It's different from the "double dip" reported by the national media and shows nothing more than the historical volatility of housing prices, Sambucci said during a 40-minute webcast.
The analyst said he "respectfully disagrees" with statements made by David Blitzer, chairman of the Standard & Poor Case-Shiller Index widely used as a measuring stick for home prices. Blitzer said home prices "continued their downward spiral with no relief in sight."
Most of the data used in the Case-Shiller index is three to six months in the "rearview mirror," Sambucci said. He's seeing a seasonal uptick in real-time prices that probably won't show up in Case-Shiller's index until late summer or early fall, he said.
The "catfish recovery" is a much better description of the market, Sambucci said.
Catfish spend their time moving slowly along the bottom of lakes and rivers, bobbing up and down from place to place without a clear direction, he said. They'll swim to the surface to eat and then return to the bottom.
"Plan for prices over the long term to hit a bottom, rise a bit, sink back down, rise again -- a pattern we expect with the housing market for several years," Sambucci said. "The housing recovery will take a long time and it is going to happen slowly."
May numbers are showing signs of strength in the market, as did March and April numbers. Prices are rising in all 20 cities tracked by Altos Research except New York and Las Vegas, which experienced only moderate declines.
The firm showed Las Vegas with an average home price of $140,598 in May, a decrease of 0.76 percent from the previous month and down 1.92 percent over the last three months.
The new Altos Mid-Cities Composite is also showing signs of strength in markets across the country. This composite examines an alternate set of smaller metropolitan statistical areas across the country to counter the volatility seen in larger, mostly coastal cities in the Case-Shiller index.
"Volatility is what we're talking about in the catfish recovery," Sambucci said. "Watch housing just like other assets. You're not going to get one, two, three, five, 10 or 15 years of growth. You're going to get volatility and finding that inflection point is the opportunity to make money."
Those who say strong job gains are needed to bolster housing are thinking backward, said Quinn Eddins, director of research for New York-based RadarLogic.
The bulk of jobs created during the housing boom disappeared when the market collapsed and builders stopped building new homes. Competition from distressed property sales are keeping housing starts near historic lows.
The problem is the huge supply of homes already in foreclosure or on their way, Eddins said.
"It could take years for the inventory of distressed homes to be absorbed and for prices to stabilize to the point where new construction is deemed to be a worthwhile endeavor," he said. "As such, sustained and robust job creation will not occur in the construction sector until the excess supply of homes is absorbed and homebuilding resumes in a sustained and robust manner. And even then, not all of the construction jobs lost in the great recession will return."
Rather than watch for job growth, watch the banks for a real measure of when the housing market hits bottom, Eddins said. They know the depth of inventory overhang because they own most of it.
Banks recognize that current dynamics suggest further declines in value and are requiring larger down payments. When banks start lending 85 percent loan-to-value as opposed to 70 percent or 75 percent, that will be a good sign that they either feel comfortable with the market or they will have figured out a new way to manage the risk.
Sambucci said he's seeing more higher-end homes move through the real estate-owned inventory, which is a good sign.
Pricing of new listings has been accelerating rapidly since spring and the price of listings being absorbed also moved higher, another good sign for the market, he said.
"Typically you assume prices will move up in the spring and this is the first time in four years we've seen that trend," he said. "This data is not captured in lagging data indices out there."
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
Altos Research Price Composite MSA May
Price 1-month
change 3-month
change
Denver $321,820 1.95% 5.24%
Las Vegas $140,598 -0.76% -1.92%
Los Angeles $596,001 1.56% 2.94%
Phoenix $230,028 2.26% 5.63%
Portland $285,332 0.86% 1.37%
Salt Lake City $293,426 0.85% 1.54%
San Diego $595,105 1.19% 3.04%
San Francisco $648,018 3.33% 8.36%
San Jose $706,051 3.14% 7.59%
Seattle $335,425 0.69% 1.08%
SOURCE: Altos Research
LAS VEGAS REVIEW-JOURNAL
Posted: Jun. 3, 2011 | 2:00 a.m.
The housing market is going through a "catfish recovery," finding the bottom and then coming up for air before going down again, market analyst Scott Sambucci of San Francisco-based Altos Research said Thursday.
It's different from the "double dip" reported by the national media and shows nothing more than the historical volatility of housing prices, Sambucci said during a 40-minute webcast.
The analyst said he "respectfully disagrees" with statements made by David Blitzer, chairman of the Standard & Poor Case-Shiller Index widely used as a measuring stick for home prices. Blitzer said home prices "continued their downward spiral with no relief in sight."
Most of the data used in the Case-Shiller index is three to six months in the "rearview mirror," Sambucci said. He's seeing a seasonal uptick in real-time prices that probably won't show up in Case-Shiller's index until late summer or early fall, he said.
The "catfish recovery" is a much better description of the market, Sambucci said.
Catfish spend their time moving slowly along the bottom of lakes and rivers, bobbing up and down from place to place without a clear direction, he said. They'll swim to the surface to eat and then return to the bottom.
"Plan for prices over the long term to hit a bottom, rise a bit, sink back down, rise again -- a pattern we expect with the housing market for several years," Sambucci said. "The housing recovery will take a long time and it is going to happen slowly."
May numbers are showing signs of strength in the market, as did March and April numbers. Prices are rising in all 20 cities tracked by Altos Research except New York and Las Vegas, which experienced only moderate declines.
The firm showed Las Vegas with an average home price of $140,598 in May, a decrease of 0.76 percent from the previous month and down 1.92 percent over the last three months.
The new Altos Mid-Cities Composite is also showing signs of strength in markets across the country. This composite examines an alternate set of smaller metropolitan statistical areas across the country to counter the volatility seen in larger, mostly coastal cities in the Case-Shiller index.
"Volatility is what we're talking about in the catfish recovery," Sambucci said. "Watch housing just like other assets. You're not going to get one, two, three, five, 10 or 15 years of growth. You're going to get volatility and finding that inflection point is the opportunity to make money."
Those who say strong job gains are needed to bolster housing are thinking backward, said Quinn Eddins, director of research for New York-based RadarLogic.
The bulk of jobs created during the housing boom disappeared when the market collapsed and builders stopped building new homes. Competition from distressed property sales are keeping housing starts near historic lows.
The problem is the huge supply of homes already in foreclosure or on their way, Eddins said.
"It could take years for the inventory of distressed homes to be absorbed and for prices to stabilize to the point where new construction is deemed to be a worthwhile endeavor," he said. "As such, sustained and robust job creation will not occur in the construction sector until the excess supply of homes is absorbed and homebuilding resumes in a sustained and robust manner. And even then, not all of the construction jobs lost in the great recession will return."
Rather than watch for job growth, watch the banks for a real measure of when the housing market hits bottom, Eddins said. They know the depth of inventory overhang because they own most of it.
Banks recognize that current dynamics suggest further declines in value and are requiring larger down payments. When banks start lending 85 percent loan-to-value as opposed to 70 percent or 75 percent, that will be a good sign that they either feel comfortable with the market or they will have figured out a new way to manage the risk.
Sambucci said he's seeing more higher-end homes move through the real estate-owned inventory, which is a good sign.
Pricing of new listings has been accelerating rapidly since spring and the price of listings being absorbed also moved higher, another good sign for the market, he said.
"Typically you assume prices will move up in the spring and this is the first time in four years we've seen that trend," he said. "This data is not captured in lagging data indices out there."
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
Altos Research Price Composite MSA May
Price 1-month
change 3-month
change
Denver $321,820 1.95% 5.24%
Las Vegas $140,598 -0.76% -1.92%
Los Angeles $596,001 1.56% 2.94%
Phoenix $230,028 2.26% 5.63%
Portland $285,332 0.86% 1.37%
Salt Lake City $293,426 0.85% 1.54%
San Diego $595,105 1.19% 3.04%
San Francisco $648,018 3.33% 8.36%
San Jose $706,051 3.14% 7.59%
Seattle $335,425 0.69% 1.08%
SOURCE: Altos Research
Cash buyers dominate Las Vegas housing market
By Hubble Smith
LAS VEGAS REVIEW-JOURNAL
Posted: Feb. 8, 2011 | 12:12 p.m.
Updated: Feb. 9, 2011 | 9:09 a.m.
More than half of existing-home sales in Las Vegas were purchased with cash in January, the first time that's happened here or perhaps anywhere else in the country, the president of Greater Las Vegas Association of Realtors said Tuesday.
The association reported that cash buyers accounted for 51 percent of January's resale activity, a percentage that has been steadily rising as Las Vegas emerged as one of the most affordable housing markets in the nation.
Most cash buyers are investors who renovate deteriorating homes and rent them out or sell them at a profit, said Paul Bell, president of the Realtors association.
While longtime homeowners in a neighborhood would prefer owner-occupants over renters, it's better than having the homes sit vacant, Bell said.
"I'd say we're fortunate to have these buyers in our community. These smart-money buyers are voting with their pocketbooks on the future of our local housing market," he said. "It shows domestic and worldwide interest in real estate here because we're seeing many international investors buying property here at an amazing rate."
Bell thinks investors will keep paying cash for homes as long as lending standards remain tight, prices remain at bargain levels and availability of lower-priced, bank-owned homes is plentiful.
Realtors sold 2,509 single-family homes and 705 condominiums and townhomes in January, compared with 2,608 homes and 658 condos in the same month a year ago.
The median price of a single-family home was $125,000, a decrease of 7.4 percent from a year ago. Condo and townhome prices fell 5.9 percent to $64,900.
The inventory of homes available for sale on the Multiple Listing Service increased to 22,010 in January, an 11.5 percent increase from 19,742 a year ago.
Donna Webster of Re/Max Central in Las Vegas said she has investor clients from the United States, Australia, Hong Kong and every province in Canada looking for a good rate of return in a buy-and-hold market.
"I think that investors are contributing in a large way to improve Las Vegas," she said. "They are buying homes that owners have trashed in anger and despair. The renovations and quality tenants are improving neighborhoods."
About 28 percent of home sales nationally were all-cash transactions last year, the National Association of Realtors reported. That's double the rate from October 2008, when the trade group began tracking the measure.
The percentage of cash buyers in Las Vegas has been higher than 40 percent for more than a year, the local Realtors association reported. The percentage is about the same in Phoenix.
Kent Clothier of Boca Raton, Fla.-based REI Marketing said he's found cash buyers for hundreds of investment homes over the last two years. Most of them are lawyers, doctors and other professionals who pulled their money from underperforming investment portfolios, sat on the sideline and are now putting it into real estate, he said.
"They're hearing that the market has bottomed out and this is the time to invest," Clothier said. "We found these people are pushing massive amounts of money into this market. It's a free-for-all right now, a very exciting time to be in real estate. Cash buyers are the key in this market, these circumstances, this system. It's never going to get any better."
While investors are being lured by bargain prices, they're not going to lead the way to recovery in the housing market, said Quinn Eddins, research director at New York-based Radar Logic.
That low home prices are fueling demand is only half the story, he said.
"The growth in cash purchases is also a function of the tight lending environment in which many buyers, even those with good credit and large down payments, are sometimes turned down for mortgage loans," Eddins said.
It's important to note that much of the low-priced housing inventory in markets such as Las Vegas, Phoenix and Miami is being sold by lenders, he said.
Bank-owned homes accounted for nearly 49 percent of all existing home sales in January, the Greater Las Vegas Association of Realtors reported. Another 26.6 percent were short sales, or lender-approved sales for less than the principal mortgage balance.
Investors are buying homes in Las Vegas that are deteriorating and not in good enough condition to be financed by lenders, Bell said. There were no safeguards against amateur investors during the boom when financing was easy.
"We just see a continued trend of investors buying houses in blighted areas and restoring them for lease or resale," he said. "We've seen many small single-family, one-story homes in North Las Vegas purchased for cash. It's one of the most active areas because a home can be purchased for less than the construction cost and the new veterans hospital is coming. We're going to see more military retirees."
The monthly Realtors' statistics are based on transactions tracked through the Multiple Listing Service and do not necessarily include sales by owner, newly constructed homes sold by builders and other transactions not involving a Realtor.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491
www.buybankownhomes.com
LAS VEGAS REVIEW-JOURNAL
Posted: Feb. 8, 2011 | 12:12 p.m.
Updated: Feb. 9, 2011 | 9:09 a.m.
More than half of existing-home sales in Las Vegas were purchased with cash in January, the first time that's happened here or perhaps anywhere else in the country, the president of Greater Las Vegas Association of Realtors said Tuesday.
The association reported that cash buyers accounted for 51 percent of January's resale activity, a percentage that has been steadily rising as Las Vegas emerged as one of the most affordable housing markets in the nation.
Most cash buyers are investors who renovate deteriorating homes and rent them out or sell them at a profit, said Paul Bell, president of the Realtors association.
While longtime homeowners in a neighborhood would prefer owner-occupants over renters, it's better than having the homes sit vacant, Bell said.
"I'd say we're fortunate to have these buyers in our community. These smart-money buyers are voting with their pocketbooks on the future of our local housing market," he said. "It shows domestic and worldwide interest in real estate here because we're seeing many international investors buying property here at an amazing rate."
Bell thinks investors will keep paying cash for homes as long as lending standards remain tight, prices remain at bargain levels and availability of lower-priced, bank-owned homes is plentiful.
Realtors sold 2,509 single-family homes and 705 condominiums and townhomes in January, compared with 2,608 homes and 658 condos in the same month a year ago.
The median price of a single-family home was $125,000, a decrease of 7.4 percent from a year ago. Condo and townhome prices fell 5.9 percent to $64,900.
The inventory of homes available for sale on the Multiple Listing Service increased to 22,010 in January, an 11.5 percent increase from 19,742 a year ago.
Donna Webster of Re/Max Central in Las Vegas said she has investor clients from the United States, Australia, Hong Kong and every province in Canada looking for a good rate of return in a buy-and-hold market.
"I think that investors are contributing in a large way to improve Las Vegas," she said. "They are buying homes that owners have trashed in anger and despair. The renovations and quality tenants are improving neighborhoods."
About 28 percent of home sales nationally were all-cash transactions last year, the National Association of Realtors reported. That's double the rate from October 2008, when the trade group began tracking the measure.
The percentage of cash buyers in Las Vegas has been higher than 40 percent for more than a year, the local Realtors association reported. The percentage is about the same in Phoenix.
Kent Clothier of Boca Raton, Fla.-based REI Marketing said he's found cash buyers for hundreds of investment homes over the last two years. Most of them are lawyers, doctors and other professionals who pulled their money from underperforming investment portfolios, sat on the sideline and are now putting it into real estate, he said.
"They're hearing that the market has bottomed out and this is the time to invest," Clothier said. "We found these people are pushing massive amounts of money into this market. It's a free-for-all right now, a very exciting time to be in real estate. Cash buyers are the key in this market, these circumstances, this system. It's never going to get any better."
While investors are being lured by bargain prices, they're not going to lead the way to recovery in the housing market, said Quinn Eddins, research director at New York-based Radar Logic.
That low home prices are fueling demand is only half the story, he said.
"The growth in cash purchases is also a function of the tight lending environment in which many buyers, even those with good credit and large down payments, are sometimes turned down for mortgage loans," Eddins said.
It's important to note that much of the low-priced housing inventory in markets such as Las Vegas, Phoenix and Miami is being sold by lenders, he said.
Bank-owned homes accounted for nearly 49 percent of all existing home sales in January, the Greater Las Vegas Association of Realtors reported. Another 26.6 percent were short sales, or lender-approved sales for less than the principal mortgage balance.
Investors are buying homes in Las Vegas that are deteriorating and not in good enough condition to be financed by lenders, Bell said. There were no safeguards against amateur investors during the boom when financing was easy.
"We just see a continued trend of investors buying houses in blighted areas and restoring them for lease or resale," he said. "We've seen many small single-family, one-story homes in North Las Vegas purchased for cash. It's one of the most active areas because a home can be purchased for less than the construction cost and the new veterans hospital is coming. We're going to see more military retirees."
The monthly Realtors' statistics are based on transactions tracked through the Multiple Listing Service and do not necessarily include sales by owner, newly constructed homes sold by builders and other transactions not involving a Realtor.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491
www.buybankownhomes.com
Expect flat home sales, prices this year
By Hubble Smith
LAS VEGAS REVIEW-JOURNAL
Posted: Feb. 11, 2011 | 2:02 a.m.
The housing market in Las Vegas is expected to chug along at about the same pace as last year, with the "shadow inventory" of bank-owned homes clouding any prospect of even modest recovery, housing analyst Dennis Smith said Thursday.
He projected about 4,500 new-home closings in 2011 and 4,700 in 2012, compared with 4,761 last year. Resales will increase to 43,250 in 2011 and 44,500 the next year, up slightly from 42,673 in 2010.
Median existing-home prices have consistently bounced between $119,000 and $125,000 for all but two of the last 19 months and will probably remain flat this year, the president of Home Builders Research said in his Housing Outlook 2011 webinar.
The median price for a traditional single-family new home was $216,000 at the end of last year, almost identical to 2009.
Buyer traffic through new-home subdivisions fell to 101,305 in 2010 from 129,442 the previous year, while net sales dropped to 4,264 from 4,811, Home Builders Research reported.
Weekly net sales per subdivision bottomed out near 0.1 at the end of 2008 and into early 2009, peaked at 1.1 around the middle of 2010 as buyers took advantage of the federal tax credit and slipped to the 0.2-to-0.3 range at the end of the year.
Traffic count rose to 13.4 a week during the tax credit period, dropped to 7.5 toward the end of the year and bounced back to 11.8 in the last two to three weeks, though net sales have not kept pace.
"This leads us to believe that buyers are much more discretionary," Smith said. "They're taking the time to look at product from new-home builders and there's a lot of competition."
D.R. Horton grabbed a 15 percent market share with 659 new-home sales in 2010, followed by Richmond American with 526 sales (12 percent) and KB Home with 483 (11 percent).
Smith said the top homebuilders bought most of the distressed lots in the Las Vegas Valley and were able to turn them around quickly, building at a competitive price advantage because of lower land costs.
More than 19,000 finished lots remain in the valley, about 70 percent of them controlled by builders or developers and the rest owned by investors and banks.
Most of the builders have no interest in selling those lots at this time, Smith said.
"They're holding them and that shows they have confidence in the long-term outlook of the Las Vegas market," he said. "Now that may change. We may have by the end of the year some builders who want to liquidate their lot holdings, but that remains to be seen."
The typical cost of a finished lot is $45,000 to $50,000, depending on location, Smith said. Pulte and Richmond American paid $70,000 to $105,000 per finished lot in an "A-plus" area across from Bishop Gorman High School in the Summerlin community, he said.
Smith projected 4,300 new-home building permits for 2011, down from 4,550 last year. They should climb to 4,600 in 2012.
"We leveled off at about 350 (permits) a month and I think we'll see that pace continue through 2011," the housing expert said. "Don't expect to see a spike like we did in 2010 when it went to 730 during the federal tax credit."
Estimates of the so-called "shadow inventory" of foreclosed homes not yet listed for sale range from 50,000 to 100,000, depending on the source.
Smith looked at data from Foreclosure.com, RealtyTrac and Foreclosure Radar and said they're all different. The Clark County Assessor's Office showed 3,132 more foreclosure sales than trustee deeds, or bank acquisitions, in 2010.
Smith settled on 12,450 as the number in the silent inventory and another 9,100 properties that will go from short-sale listing to real estate-owned, or bank-owned. Add 15,000 notices of default filed last year and that's 37,000 to 38,000 imminent foreclosures "staring you in the face," he said.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
Top-selling master plans Community 2010 resales Average price Average age Average lot size
Summerlin 2,651 $314,408 10.8 6,738
Mountain's Edge 1,182 $208,369 4.5 5,073
Anthem 998 $309,468 7.2 8,101
Southern Highlands 956 $264,688 7.7 6,346
Aliante 819 $188,569 5.8 6,180
Coronado Ranch 721 $204,984 6.5 3,667
Rhodes Ranch 765 $188,607 6.8 4,136
Silverado Ranch 657 $167,730 10.4 4,914
Eldorado 421 $150,161 12.3 6,356
Green Valley 432 $218,160 21.8 8,044
The Lakes 435 $195,425 23.1 6,223
Spring Valley 441 $136,311 29.5 6,170
Spring Mountain Ranch 433 $158,147 8.4 4,865
Source: Home Builders Research
LAS VEGAS REVIEW-JOURNAL
Posted: Feb. 11, 2011 | 2:02 a.m.
The housing market in Las Vegas is expected to chug along at about the same pace as last year, with the "shadow inventory" of bank-owned homes clouding any prospect of even modest recovery, housing analyst Dennis Smith said Thursday.
He projected about 4,500 new-home closings in 2011 and 4,700 in 2012, compared with 4,761 last year. Resales will increase to 43,250 in 2011 and 44,500 the next year, up slightly from 42,673 in 2010.
Median existing-home prices have consistently bounced between $119,000 and $125,000 for all but two of the last 19 months and will probably remain flat this year, the president of Home Builders Research said in his Housing Outlook 2011 webinar.
The median price for a traditional single-family new home was $216,000 at the end of last year, almost identical to 2009.
Buyer traffic through new-home subdivisions fell to 101,305 in 2010 from 129,442 the previous year, while net sales dropped to 4,264 from 4,811, Home Builders Research reported.
Weekly net sales per subdivision bottomed out near 0.1 at the end of 2008 and into early 2009, peaked at 1.1 around the middle of 2010 as buyers took advantage of the federal tax credit and slipped to the 0.2-to-0.3 range at the end of the year.
Traffic count rose to 13.4 a week during the tax credit period, dropped to 7.5 toward the end of the year and bounced back to 11.8 in the last two to three weeks, though net sales have not kept pace.
"This leads us to believe that buyers are much more discretionary," Smith said. "They're taking the time to look at product from new-home builders and there's a lot of competition."
D.R. Horton grabbed a 15 percent market share with 659 new-home sales in 2010, followed by Richmond American with 526 sales (12 percent) and KB Home with 483 (11 percent).
Smith said the top homebuilders bought most of the distressed lots in the Las Vegas Valley and were able to turn them around quickly, building at a competitive price advantage because of lower land costs.
More than 19,000 finished lots remain in the valley, about 70 percent of them controlled by builders or developers and the rest owned by investors and banks.
Most of the builders have no interest in selling those lots at this time, Smith said.
"They're holding them and that shows they have confidence in the long-term outlook of the Las Vegas market," he said. "Now that may change. We may have by the end of the year some builders who want to liquidate their lot holdings, but that remains to be seen."
The typical cost of a finished lot is $45,000 to $50,000, depending on location, Smith said. Pulte and Richmond American paid $70,000 to $105,000 per finished lot in an "A-plus" area across from Bishop Gorman High School in the Summerlin community, he said.
Smith projected 4,300 new-home building permits for 2011, down from 4,550 last year. They should climb to 4,600 in 2012.
"We leveled off at about 350 (permits) a month and I think we'll see that pace continue through 2011," the housing expert said. "Don't expect to see a spike like we did in 2010 when it went to 730 during the federal tax credit."
Estimates of the so-called "shadow inventory" of foreclosed homes not yet listed for sale range from 50,000 to 100,000, depending on the source.
Smith looked at data from Foreclosure.com, RealtyTrac and Foreclosure Radar and said they're all different. The Clark County Assessor's Office showed 3,132 more foreclosure sales than trustee deeds, or bank acquisitions, in 2010.
Smith settled on 12,450 as the number in the silent inventory and another 9,100 properties that will go from short-sale listing to real estate-owned, or bank-owned. Add 15,000 notices of default filed last year and that's 37,000 to 38,000 imminent foreclosures "staring you in the face," he said.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
Top-selling master plans Community 2010 resales Average price Average age Average lot size
Summerlin 2,651 $314,408 10.8 6,738
Mountain's Edge 1,182 $208,369 4.5 5,073
Anthem 998 $309,468 7.2 8,101
Southern Highlands 956 $264,688 7.7 6,346
Aliante 819 $188,569 5.8 6,180
Coronado Ranch 721 $204,984 6.5 3,667
Rhodes Ranch 765 $188,607 6.8 4,136
Silverado Ranch 657 $167,730 10.4 4,914
Eldorado 421 $150,161 12.3 6,356
Green Valley 432 $218,160 21.8 8,044
The Lakes 435 $195,425 23.1 6,223
Spring Valley 441 $136,311 29.5 6,170
Spring Mountain Ranch 433 $158,147 8.4 4,865
Source: Home Builders Research
Experts see hope for Southern Nevada’s housing market
By Buck Wargo (contact)
Mon, Mar 21, 2011 (3 a.m.)
Sun Topics
■Real Estate in Crisis
■Sun business and economy coverage
Las Vegas has served as a destination point for brokerages holding their international conventions. The top executives of Coldwell Banker and RE/MAX took their turn to speak about the housing market and its prospects for recovery.
Jim Gillespie, CEO of Coldwell Banker, said real estate and the housing markets have traditionally led the nation out of major recessions, but that’s not happening this time. The economy is going to recover from other scenarios because improvement in the housing market has been slow and gradual, he said
The housing market effectively tanked when the federal housing tax credit expired last spring, but despite what some media have suggested, it isn’t dead and has picked up in the past six months, Gillespie said.
Some suggest that prices will fall another 15 to 20 percent, but Gillespie said he thinks prices are stabilizing nationally with the biggest weakness in Nevada, California and Arizona, which have high foreclosure rates.
Gillespie said he’s optimistic about the continued recovery of the housing market because of the improvement in the nation’s economy. Even 18 months ago, jobs were being cut, but the country gained more than 1 million jobs in 2010 and added nearly 200,000 in February, he said. More than 2 million will be created this year, he said.
Consumer confidence is at its highest level since 2008, and auto sales have rebounded, Gillespie said. Retail sales had their highest year-over-year gain since 1999.
“All of these things are happening from a low base, and it doesn’t mean we are back to a boom,” Gillespie said. “I don’t think we want to see housing prices spike through the roof again. We have learned what goes up, goes down, and as long as we are showing a steady increase and unemployment goes down and jobs are created, we will get out of this.”
The housing market will have some pent-up demand because a lot of younger people have been moving in with each other or in with their parents until the economy improves, Gillespie said. Once it does, a lot of those people will be looking to buy homes, he said.
Las Vegas had led the nation with more than half of purchases recently involving cash, meaning that investors are a central part of the market. Gillespie said he doesn’t see that as a negative, but the foreclosure properties and short sales need to be “flushed through the system” as quickly as possible.
This isn’t speculation like what happened during the run-up of prices in the past. A lot of checks have been put in place to prevent that from happening again, he said.
Mortgage brokers won’t be earning higher commissions as they did by pushing buyers into subprime loans. There are no more loans without substantiating the ability to pay, he said.
Underwriting standards may be too tough but they aren’t going to go back to the days when they were so loose, he said.
Dave Liniger, co-founder of RE/MAX, said his message to agents has changed over the years. In 2006, he said there was a huge bubble and that the market would crash but that even he didn’t think it would be this bad. He said he didn’t understand the depth of the subprime loan crisis.
Liniger said he told agents this year that the worst is behind them, but the foreclosure problem hasn’t ended and states such as Nevada, Arizona and California are affected by it.
Sales should increase nationwide in 2011 by 300,000 but Liniger said the recovery won’t begin until 2012 or 2013 because of foreclosures.
But he said the future of the housing market is bright because the population is growing and consumer confidence is rising. Foreign buyers are helping the market with its excess inventory, and as the economy recovers and people are able to sell their homes in the Midwest and Northeast, they will move to places such as Las Vegas because housing is so affordable and weather is warmer, he said.
“We’re going to have another mass exodus to the Sunbelt,” Liniger said.
Liniger said his firm has decided to hold conferences in Las Vegas for three consecutive years rather than two years.
Brookings Institution
Las Vegas didn’t fare well in the latest economic performance of the 100 largest metropolitan areas in the nation. The city was in a group of the 20 weakest performing areas that included Phoenix and four California cities.
Las Vegas was ranked No. 96 in change of employment from the second quarter of 2007 to the fourth quarter of 2007. It fell 14.8 percent. It was ranked 96th in unemployment and 100th in a three-year change in its jobless rate.
The valley’s gross metropolitan product fell 8.1 percent for a 97th ranking. Housing prices fell 57.6 percent for a 98th ranking and the percentage of foreclosure properties had Las Vegas 99th on the list.
The one bit of good news noted by Brookings Mountain West, based at UNLV, is that during the fourth quarter of 2010, Las Vegas enjoyed one of its best quarters since the onset of the recession, growing 0.7 percent.
In other news
• CIP Real Estate said it completed 14 lease transactions at Hughes Airport Center in 2010 with a value of $19.4 million. It includes 282,000 square feet of industrial, office and flex space in the 3.3-million-square-foot complex. The 14 leases were 10 new leases and four renewals, including one with Cox Communications for $5.5 million to lease an 84,000-square-foot industrial building. The other leases were Cirque du Soleil and Sitel Operating Corp.
• Housing analyst John Burns lists Mountain’s Edge and Providence as the fifth and sixth leading master-planned communities in housing sales across the nation in 2010. Mountain’s Edge had 645 sales compared with 481 sales in Providence. Both are by Focus Property Group. The Villages in Orlando, Fla., was first with 2,208 sales, followed by Irvine Ranch in Orange County, Calif., with 984; Cinco Ranch in the Houston with 815; and the Woodlands in Houston with 786. The Houston area had four of the top 10. Burns said the popularity of master-planned communities continues because they are considered synonymous with good schools, parks, safer environments and recreational opportunities. They command a 6 to 10 percent price premium over the competition.
www.buybankownhomes.com
Mon, Mar 21, 2011 (3 a.m.)
Sun Topics
■Real Estate in Crisis
■Sun business and economy coverage
Las Vegas has served as a destination point for brokerages holding their international conventions. The top executives of Coldwell Banker and RE/MAX took their turn to speak about the housing market and its prospects for recovery.
Jim Gillespie, CEO of Coldwell Banker, said real estate and the housing markets have traditionally led the nation out of major recessions, but that’s not happening this time. The economy is going to recover from other scenarios because improvement in the housing market has been slow and gradual, he said
The housing market effectively tanked when the federal housing tax credit expired last spring, but despite what some media have suggested, it isn’t dead and has picked up in the past six months, Gillespie said.
Some suggest that prices will fall another 15 to 20 percent, but Gillespie said he thinks prices are stabilizing nationally with the biggest weakness in Nevada, California and Arizona, which have high foreclosure rates.
Gillespie said he’s optimistic about the continued recovery of the housing market because of the improvement in the nation’s economy. Even 18 months ago, jobs were being cut, but the country gained more than 1 million jobs in 2010 and added nearly 200,000 in February, he said. More than 2 million will be created this year, he said.
Consumer confidence is at its highest level since 2008, and auto sales have rebounded, Gillespie said. Retail sales had their highest year-over-year gain since 1999.
“All of these things are happening from a low base, and it doesn’t mean we are back to a boom,” Gillespie said. “I don’t think we want to see housing prices spike through the roof again. We have learned what goes up, goes down, and as long as we are showing a steady increase and unemployment goes down and jobs are created, we will get out of this.”
The housing market will have some pent-up demand because a lot of younger people have been moving in with each other or in with their parents until the economy improves, Gillespie said. Once it does, a lot of those people will be looking to buy homes, he said.
Las Vegas had led the nation with more than half of purchases recently involving cash, meaning that investors are a central part of the market. Gillespie said he doesn’t see that as a negative, but the foreclosure properties and short sales need to be “flushed through the system” as quickly as possible.
This isn’t speculation like what happened during the run-up of prices in the past. A lot of checks have been put in place to prevent that from happening again, he said.
Mortgage brokers won’t be earning higher commissions as they did by pushing buyers into subprime loans. There are no more loans without substantiating the ability to pay, he said.
Underwriting standards may be too tough but they aren’t going to go back to the days when they were so loose, he said.
Dave Liniger, co-founder of RE/MAX, said his message to agents has changed over the years. In 2006, he said there was a huge bubble and that the market would crash but that even he didn’t think it would be this bad. He said he didn’t understand the depth of the subprime loan crisis.
Liniger said he told agents this year that the worst is behind them, but the foreclosure problem hasn’t ended and states such as Nevada, Arizona and California are affected by it.
Sales should increase nationwide in 2011 by 300,000 but Liniger said the recovery won’t begin until 2012 or 2013 because of foreclosures.
But he said the future of the housing market is bright because the population is growing and consumer confidence is rising. Foreign buyers are helping the market with its excess inventory, and as the economy recovers and people are able to sell their homes in the Midwest and Northeast, they will move to places such as Las Vegas because housing is so affordable and weather is warmer, he said.
“We’re going to have another mass exodus to the Sunbelt,” Liniger said.
Liniger said his firm has decided to hold conferences in Las Vegas for three consecutive years rather than two years.
Brookings Institution
Las Vegas didn’t fare well in the latest economic performance of the 100 largest metropolitan areas in the nation. The city was in a group of the 20 weakest performing areas that included Phoenix and four California cities.
Las Vegas was ranked No. 96 in change of employment from the second quarter of 2007 to the fourth quarter of 2007. It fell 14.8 percent. It was ranked 96th in unemployment and 100th in a three-year change in its jobless rate.
The valley’s gross metropolitan product fell 8.1 percent for a 97th ranking. Housing prices fell 57.6 percent for a 98th ranking and the percentage of foreclosure properties had Las Vegas 99th on the list.
The one bit of good news noted by Brookings Mountain West, based at UNLV, is that during the fourth quarter of 2010, Las Vegas enjoyed one of its best quarters since the onset of the recession, growing 0.7 percent.
In other news
• CIP Real Estate said it completed 14 lease transactions at Hughes Airport Center in 2010 with a value of $19.4 million. It includes 282,000 square feet of industrial, office and flex space in the 3.3-million-square-foot complex. The 14 leases were 10 new leases and four renewals, including one with Cox Communications for $5.5 million to lease an 84,000-square-foot industrial building. The other leases were Cirque du Soleil and Sitel Operating Corp.
• Housing analyst John Burns lists Mountain’s Edge and Providence as the fifth and sixth leading master-planned communities in housing sales across the nation in 2010. Mountain’s Edge had 645 sales compared with 481 sales in Providence. Both are by Focus Property Group. The Villages in Orlando, Fla., was first with 2,208 sales, followed by Irvine Ranch in Orange County, Calif., with 984; Cinco Ranch in the Houston with 815; and the Woodlands in Houston with 786. The Houston area had four of the top 10. Burns said the popularity of master-planned communities continues because they are considered synonymous with good schools, parks, safer environments and recreational opportunities. They command a 6 to 10 percent price premium over the competition.
www.buybankownhomes.com
Slightly better news for Las Vegas housing
By Hubble Smith
LAS VEGAS REVIEW-JOURNAL
Posted: Jun. 8, 2011 | 10:08 a.m.
The number of homes sold in Las Vegas and their median price increased slightly in May from the previous month, though prices are down 11.3 percent from a year ago, the Greater Las Vegas Association of Realtors reported Wednesday.
Realtors sold 3,991 single-family homes, condominiums and townhomes in May, up from 3,902 in April and 3,653 in May 2010. Single-family home sales increased 7.9 percent, while sales of condos and townhomes increased by 14.4 percent, compared to May 2010.
The median price of a single-family home sold in May was $126,000, up 0.8 percent from $125,000 in April, but down 11.3 percent from a year ago.
"This was the first time so far this year that both of these key indicators increased in the same month for both single-family homes and for condos and townhomes," Realtors association President Paul Bell said. "We'll take anything positive these days."
Bell said he sees a positive trend in the increasing number of home sales involving "traditional" buyers and sellers, as opposed to investors and lenders who have dominated Southern Nevada sales for many months.
He noted that the number of traditional home sales increased in May as the percentage of sales involving bank-owned homes and short sales declined.
"It's a gradual trend, but it certainly is an improvement over what we've been seeing," he said.
Realtors' statistics showed 51.4 percent of existing homes sold in Southern Nevada in May were bought with cash. That's down from 51.9 percent in April, but remains near record levels.
Las Vegas-based Residential Resources reported 1,322 REO, or bank-owned, sales in May, or 43.1 percent of all closings; 985 regular sales, or 32 percent of the total; and 758 short sales, or 24.7 percent of the total.
Assuming that owners of homes listed for short sale have stopped making payments, that's a financial stimulus of $5.54 million flowing into Southern Nevada's economy and not going to financial institutions, said Frank Nason, president of Residential Resources.
He based his estimate on an average mortgage payment of $750 for principal and interest and 7,389 short-sale listings in Las Vegas.
"I started thinking about this in national terms estimating that there is probably quite a large stimulus occurring," Nason said. "Is it purposeful stimulus or just a serendipitous result of the slow approval process? I don't have any answers to the larger questions."
The least expensive closing was $10,052 for a home at 1812 Princeton St.; the most expensive was $15 million for a home at 7030 Tomiyasu Lane, according to Residential Resources.
The number of homes for sale on the Multiple Listing Service increased slightly, to 22,767, in May, up 7.7 percent from a year ago. About half list pending or contingent offers.
Bell said real estate agents are seeing a tightening of inventory in master-planned neighborhoods such as Summerlin, Green Valley and Seven Hills, and near employment centers.
Rob Jenson of ReMax Central said the Las Vegas housing market shows stability in the lowest price range with less than six months' supply. It gets softer in the mid-range and luxury markets.
"Once the price hits $600,000, the supply more than doubles, then it just goes up from there," Jenson said.
The monthly value of single-family home transactions tracked through the MLS increased 0.3 percent, to more than $491 million. For condos and townhomes, sales volume was more than $76 million, up 11.9 percent from April.
Realtors' statistics are based on data collected through its MLS, which may not account for new homes sold by builders or for sale by owners.
Contact reporter Hubble Smith at hsmith@ reviewjournal.com or 702-383-0491.
LAS VEGAS REVIEW-JOURNAL
Posted: Jun. 8, 2011 | 10:08 a.m.
The number of homes sold in Las Vegas and their median price increased slightly in May from the previous month, though prices are down 11.3 percent from a year ago, the Greater Las Vegas Association of Realtors reported Wednesday.
Realtors sold 3,991 single-family homes, condominiums and townhomes in May, up from 3,902 in April and 3,653 in May 2010. Single-family home sales increased 7.9 percent, while sales of condos and townhomes increased by 14.4 percent, compared to May 2010.
The median price of a single-family home sold in May was $126,000, up 0.8 percent from $125,000 in April, but down 11.3 percent from a year ago.
"This was the first time so far this year that both of these key indicators increased in the same month for both single-family homes and for condos and townhomes," Realtors association President Paul Bell said. "We'll take anything positive these days."
Bell said he sees a positive trend in the increasing number of home sales involving "traditional" buyers and sellers, as opposed to investors and lenders who have dominated Southern Nevada sales for many months.
He noted that the number of traditional home sales increased in May as the percentage of sales involving bank-owned homes and short sales declined.
"It's a gradual trend, but it certainly is an improvement over what we've been seeing," he said.
Realtors' statistics showed 51.4 percent of existing homes sold in Southern Nevada in May were bought with cash. That's down from 51.9 percent in April, but remains near record levels.
Las Vegas-based Residential Resources reported 1,322 REO, or bank-owned, sales in May, or 43.1 percent of all closings; 985 regular sales, or 32 percent of the total; and 758 short sales, or 24.7 percent of the total.
Assuming that owners of homes listed for short sale have stopped making payments, that's a financial stimulus of $5.54 million flowing into Southern Nevada's economy and not going to financial institutions, said Frank Nason, president of Residential Resources.
He based his estimate on an average mortgage payment of $750 for principal and interest and 7,389 short-sale listings in Las Vegas.
"I started thinking about this in national terms estimating that there is probably quite a large stimulus occurring," Nason said. "Is it purposeful stimulus or just a serendipitous result of the slow approval process? I don't have any answers to the larger questions."
The least expensive closing was $10,052 for a home at 1812 Princeton St.; the most expensive was $15 million for a home at 7030 Tomiyasu Lane, according to Residential Resources.
The number of homes for sale on the Multiple Listing Service increased slightly, to 22,767, in May, up 7.7 percent from a year ago. About half list pending or contingent offers.
Bell said real estate agents are seeing a tightening of inventory in master-planned neighborhoods such as Summerlin, Green Valley and Seven Hills, and near employment centers.
Rob Jenson of ReMax Central said the Las Vegas housing market shows stability in the lowest price range with less than six months' supply. It gets softer in the mid-range and luxury markets.
"Once the price hits $600,000, the supply more than doubles, then it just goes up from there," Jenson said.
The monthly value of single-family home transactions tracked through the MLS increased 0.3 percent, to more than $491 million. For condos and townhomes, sales volume was more than $76 million, up 11.9 percent from April.
Realtors' statistics are based on data collected through its MLS, which may not account for new homes sold by builders or for sale by owners.
Contact reporter Hubble Smith at hsmith@ reviewjournal.com or 702-383-0491.
Tuesday, June 7, 2011
Las Vegas valley new-home sales shrink
By Hubble Smith
LAS VEGAS REVIEW-JOURNAL
Posted: May 25, 2011 | 2:01 a.m.
New homes accounted for just 7 percent of total housing sales in April, a radical departure from past years when they were about 40 percent of the Las Vegas market, a local housing analyst said Tuesday.
Home Builders Research reported 258 new-home sales during the month, down from 293 the previous month and down from 471 in April 2010. For the first four months of the year, new-home sales declined 33 percent, to 1,020.
The new-home industry was once a huge contributor to the Las Vegas economy with as many as 30,829 closings in 2005. That number fell to 15,584 just two years later and then to 4,761 last year.
The reduction in new-home market share is an "unbelievable alteration" and sums up how the Las Vegas housing market has changed, Home Builders Research President Dennis Smith said.
"It's hard to compare to the way things used to be," he said. "This is what the market is resetting into, something it's never been before. I'm not saying it's bad. It's different."
Adapting to the changing market, homebuilders laid off most of their staffs and cut operations to the bone, Smith said. He counted 323 homebuilding permits in April, for a total of 1,130 for the year, down 45 percent from a year ago.
It's not a fair comparison because last year's numbers reflected increased demand from the government's homebuyer tax credit, he said.
"The numbers are sobering," the analyst said. "Closings are one thing, but I watch permits. I'd be really surprised if we don't see an increase (in permits) in the coming months."
Customer traffic at new-home subdivisions has slowly increased and net sales per subdivision have climbed to about 0.4 a week, about double from the beginning of the year, Smith said.
D.R. Horton pulled the most permits in April (182) followed by KB Home (157) and Lennar (133).
The median price of a new home in Las Vegas dropped 7.2 percent from a year ago, to $188,450 in April.
The resale segment continued to chug along, with 3,849 recorded closings in April, largely boosted by investor purchases. For the year, existing home sales increased 3.8 percent, to 14,375.
Median resale price was $112,000, a loss of $16,000, or 12.5 percent, from a year ago. Smith noted that 19 homes closed escrow for $1 million or more .
Smith said he's seeing signs that Las Vegas may be emerging from the recession, such as packed restaurants and an uptick in discretionary spending.
"There's some good news around the country and hopefully it'll filter down to us," Smith said.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491
LAS VEGAS REVIEW-JOURNAL
Posted: May 25, 2011 | 2:01 a.m.
New homes accounted for just 7 percent of total housing sales in April, a radical departure from past years when they were about 40 percent of the Las Vegas market, a local housing analyst said Tuesday.
Home Builders Research reported 258 new-home sales during the month, down from 293 the previous month and down from 471 in April 2010. For the first four months of the year, new-home sales declined 33 percent, to 1,020.
The new-home industry was once a huge contributor to the Las Vegas economy with as many as 30,829 closings in 2005. That number fell to 15,584 just two years later and then to 4,761 last year.
The reduction in new-home market share is an "unbelievable alteration" and sums up how the Las Vegas housing market has changed, Home Builders Research President Dennis Smith said.
"It's hard to compare to the way things used to be," he said. "This is what the market is resetting into, something it's never been before. I'm not saying it's bad. It's different."
Adapting to the changing market, homebuilders laid off most of their staffs and cut operations to the bone, Smith said. He counted 323 homebuilding permits in April, for a total of 1,130 for the year, down 45 percent from a year ago.
It's not a fair comparison because last year's numbers reflected increased demand from the government's homebuyer tax credit, he said.
"The numbers are sobering," the analyst said. "Closings are one thing, but I watch permits. I'd be really surprised if we don't see an increase (in permits) in the coming months."
Customer traffic at new-home subdivisions has slowly increased and net sales per subdivision have climbed to about 0.4 a week, about double from the beginning of the year, Smith said.
D.R. Horton pulled the most permits in April (182) followed by KB Home (157) and Lennar (133).
The median price of a new home in Las Vegas dropped 7.2 percent from a year ago, to $188,450 in April.
The resale segment continued to chug along, with 3,849 recorded closings in April, largely boosted by investor purchases. For the year, existing home sales increased 3.8 percent, to 14,375.
Median resale price was $112,000, a loss of $16,000, or 12.5 percent, from a year ago. Smith noted that 19 homes closed escrow for $1 million or more .
Smith said he's seeing signs that Las Vegas may be emerging from the recession, such as packed restaurants and an uptick in discretionary spending.
"There's some good news around the country and hopefully it'll filter down to us," Smith said.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491
Short sellers in valley look for aid, left frustrated
By Hubble Smith
LAS VEGAS REVIEW-JOURNAL
Posted: May 27, 2011 | 2:09 a.m.
The man on Sam Wagmeister's voice mail goes ballistic with a string of expletives warning a Realtor to stay (the bleep) away from him, not to call him or his wife, not to send any emails and that he'll get a (bleeping) court injunction if necessary.
That's the kind of frustration shown by Las Vegas homeowners trying to complete a short sale, or lender-approved sale for less than the principal mortgage balance.
Wagmeister said he was close to getting a short sale done when the bank asked for updated financial statements from the seller. When those weren't provided, the house went to foreclosure.
Government programs such as the Home Affordable Foreclosure Alternative, or HAFA, have been widely criticized as dismal failures in streamlining the short-sale process and providing incentives for borrowers and lenders.
Of Nevada's 687 applications for HAFA in the year since the Obama administration announced the program, 359 have closed, 253 are pending and 75 were cancelled, a U.S. Treasury Department official said Thursday.
"The results were underwhelming," said Laurie Maggiano, policy director in the Treasury's Office of Homeownership Preservation. "We went back to the drawing board and identified some problems impeding (loan) servicers and made some changes that would allow more borrowers to participate in the program."
Maggiano oversees the Making Home Affordable Program, aimed at helping millions of American families avoid foreclosure through refinance or loan modification. HAFA was closely tied to HAMP with extensive eligibility requirements.
The Treasury eliminated major impediments from HAFA such as income documentation and a requirement that the home be owner-occupied, Maggiano said. Another huge part is releasing borrowers of deficiency judgments on second liens.
"That impacts their credit and their ability to buy another home down the line and it allows borrowers to recover financially," Maggiano said. "This is about keeping owners in their homes with affordable mortgage payments. If more short sales could be approved, it would help values of all homes in a community."
Maggiano came to Las Vegas on Wednesday to follow up on a recent meeting in Washington, D.C., with real estate agents, mortgage company representatives and loan servicers from five states hit hardest by the housing downturn.
Mike Young, president of Nevada Association of Realtors in Reno, said he was impressed with Maggiano's efforts to educate people on how to take advantage of the government program.
HAFA didn't get much use in Nevada, but at least it established guidelines on paying $3,000 to borrowers, $1,500 to loan servicers and $6,000 to settle second liens, Young said. That structure needs to apply to all lenders, not just those participating in HAFA, he said.
"Some of the big lenders were all over it, like Wells (Fargo) and Bank of America," Young said. "They seemed to have investors in their portfolio and servicers who know the parameters."
Maggiano said the only requirement for servicers is to document borrowers' hardships.
"This is not a program for people who can afford to make their payment and choose not to, but for those in need," she said. "With the highest unemployment rate in the nation, you truly have enough borrowers who can't afford to live in the homes they're in and they need a graceful exit."
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491
LAS VEGAS REVIEW-JOURNAL
Posted: May 27, 2011 | 2:09 a.m.
The man on Sam Wagmeister's voice mail goes ballistic with a string of expletives warning a Realtor to stay (the bleep) away from him, not to call him or his wife, not to send any emails and that he'll get a (bleeping) court injunction if necessary.
That's the kind of frustration shown by Las Vegas homeowners trying to complete a short sale, or lender-approved sale for less than the principal mortgage balance.
Wagmeister said he was close to getting a short sale done when the bank asked for updated financial statements from the seller. When those weren't provided, the house went to foreclosure.
Government programs such as the Home Affordable Foreclosure Alternative, or HAFA, have been widely criticized as dismal failures in streamlining the short-sale process and providing incentives for borrowers and lenders.
Of Nevada's 687 applications for HAFA in the year since the Obama administration announced the program, 359 have closed, 253 are pending and 75 were cancelled, a U.S. Treasury Department official said Thursday.
"The results were underwhelming," said Laurie Maggiano, policy director in the Treasury's Office of Homeownership Preservation. "We went back to the drawing board and identified some problems impeding (loan) servicers and made some changes that would allow more borrowers to participate in the program."
Maggiano oversees the Making Home Affordable Program, aimed at helping millions of American families avoid foreclosure through refinance or loan modification. HAFA was closely tied to HAMP with extensive eligibility requirements.
The Treasury eliminated major impediments from HAFA such as income documentation and a requirement that the home be owner-occupied, Maggiano said. Another huge part is releasing borrowers of deficiency judgments on second liens.
"That impacts their credit and their ability to buy another home down the line and it allows borrowers to recover financially," Maggiano said. "This is about keeping owners in their homes with affordable mortgage payments. If more short sales could be approved, it would help values of all homes in a community."
Maggiano came to Las Vegas on Wednesday to follow up on a recent meeting in Washington, D.C., with real estate agents, mortgage company representatives and loan servicers from five states hit hardest by the housing downturn.
Mike Young, president of Nevada Association of Realtors in Reno, said he was impressed with Maggiano's efforts to educate people on how to take advantage of the government program.
HAFA didn't get much use in Nevada, but at least it established guidelines on paying $3,000 to borrowers, $1,500 to loan servicers and $6,000 to settle second liens, Young said. That structure needs to apply to all lenders, not just those participating in HAFA, he said.
"Some of the big lenders were all over it, like Wells (Fargo) and Bank of America," Young said. "They seemed to have investors in their portfolio and servicers who know the parameters."
Maggiano said the only requirement for servicers is to document borrowers' hardships.
"This is not a program for people who can afford to make their payment and choose not to, but for those in need," she said. "With the highest unemployment rate in the nation, you truly have enough borrowers who can't afford to live in the homes they're in and they need a graceful exit."
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491
Las Vegas home prices could fall further
LAS VEGAS REVIEW-JOURNAL
Posted: May 31, 2011 | 12:20 p.m.
Updated: Jun. 1, 2011 | 8:00 a.m.
Las Vegas homeowners are getting a tentative answer to the question: "How much lower can housing prices go?"
And the answer appears to be, "Lower still."
Standard & Poor's National Case-Shiller Home Price Index on Tuesday showed home prices hitting a new recession low for Las Vegas and the nation.
The average price of a Las Vegas area house slipped 1.1 percent from February to March. That represents a decline of 5.3 percent from a year ago.
"I'm not surprised," said Dennis Smith, president of Home Builders Research.
"Are the (home) prices still soft?" Smith asked. "Yes. Do we think they are going to continue to be soft? Yes. For how long? It could be for years."
Las Vegas home prices have now fallen below their January 2000 level, according to Case-Shiller.
The national figure fell 4.2 percent in the first three months of the year and dropped 5.1 percent over the level a year ago. Case-Shiller is an index that started at 100 in January 2000.
"This month's report is marked by the confirmation of a double-dip in home prices across much of the nation," David Blitzer, index committee chairman at S&P Indices, said in a statement.
Blitzer said home prices rebounded slightly in 2009 and 2010 mainly because of the first-time home buyers tax credit.
But since December, home prices have slipped in many areas, Blitzer said. In March, Las Vegas and 11 other cities "fell to their lowest levels as measured by the current housing cycle," he said.
DIFFERING VIEWS
Still, Paul Bell, president of the Greater Las Vegas Association of Realtors, said Case-Shiller data are 90 days old and said he sees a brighter outlook based on more current and reliable multiple listing service statistics that the association compiles.
The typical $125,000, one-story house with three bedrooms and two baths is selling quickly. "If you want that type of product, you better buy it now," Bell said. "These things are selling faster than pancakes at IHOP."
Even $1 million-plus single-family homes are starting to come back although slower than the average home, he said.
But Tim Kelly Kiernan, a certified distressed property expert with ReMax Extreme, took a different perspective. Case-Shiller has been "pretty much on the mark" with its home price index, he said.
"I advise my sellers that unless they really have to sell, don't sell," Kiernan said. Nationwide, roughly 92 percent of homeowners say it's a bad time to sell their home, according to the latest Thomson Reuters/University of Michigan index of consumer sentiment.
But Kiernan agreed with Bell that the time is right for long-term buyers.
"The prices are the lowest in many years, but don't expect any (home price) appreciation anytime soon," he said.
STABILIZATION EXPECTED
Jeff Thredgold, economist for Nevada State Bank, said home prices might fall a little more, but mortgage rates are within one-half point of their lowest level in 50 years, about 4.6 percent on 30-year, fixed rate products.
A homebuyer could buy at a lower price if he waits but wind up paying a higher interest rate on his mortgage, Thredgold said. "I suspect (home prices) will probably dip a little lower over the next couple of months, but most of the pain is behind us."
"By the later part of the year, I think you will see some stabilization in home prices, and some markets may see some improvement, but it's going to be slow and painful," Thredgold said.
One obstacle to a rebound in prices: a delay in processing foreclosures. Homes in foreclosure sell at a 20 percent discount on average, which can hurt prices in the neighborhood. But many foreclosure sales have been delayed while federal regulators, state attorneys general and banks review how those foreclosures were carried out over the past two years.
Once those homes are eventually foreclosed upon, they will cause prices to fall even further. Those declines are "etched in stone," said Patrick Newport, U.S. economist at IHS Global Insight.
Thredgold pointed out that the Nevada housing bust was born in the boom of the early 21st century.
Home prices in Nevada, California, Arizona and Florida doubled between 2003 and 2007, Thredgold said.
"Obviously, areas like Las Vegas and Phoenix and various parts of Florida are down more than (other areas) because they were up higher," he said.
During the housing boom days, lenders made a flood of subprime mortgages to buyers with below-standard credit. Many of these borrowers couldn't pay the monthly mortgage bill after teaser rates ended. Defaults spread to prime homeowners with better credit when they lost their jobs.
The massive number of foreclosures drove down home values for others, and some of them decided to walk away and make a strategic default, causing home prices to decrease even more.
Resale home prices plunged 12.5 percent over the past year to $112,000 from $128,000 in April, according to Home Builders Research. New Home prices dropped 6.6 percent to $186,900 from almost $200,000 in the same period.
However, sale of foreclosed houses, many of which are extensively damaged and looted, are skewing the averages, said Forrest Barbee, corporate broker at Prudential Americana Group.
Traditional sales by homeowners with equity are doing better, he said. Statistics he compiled for Equity Title of Nevada indicated that homeowners with equity sold 937 houses for a $200,000 average during May.
Areas near employment centers and in master-planned communities, such as Summerlin, are doing well, Bell said. North Las Vegas is overbuilt, but the new Veterans Administration hospital is attracting health care professionals and retired military veterans, he said.
"Jobs are everything," Barbee said.
Thredgold predicted even the jobs market will improve before housing, however. "Housing is contributing nothing to the recovery," he said.
Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420. The Associated Press contributed to this report.
Posted: May 31, 2011 | 12:20 p.m.
Updated: Jun. 1, 2011 | 8:00 a.m.
Las Vegas homeowners are getting a tentative answer to the question: "How much lower can housing prices go?"
And the answer appears to be, "Lower still."
Standard & Poor's National Case-Shiller Home Price Index on Tuesday showed home prices hitting a new recession low for Las Vegas and the nation.
The average price of a Las Vegas area house slipped 1.1 percent from February to March. That represents a decline of 5.3 percent from a year ago.
"I'm not surprised," said Dennis Smith, president of Home Builders Research.
"Are the (home) prices still soft?" Smith asked. "Yes. Do we think they are going to continue to be soft? Yes. For how long? It could be for years."
Las Vegas home prices have now fallen below their January 2000 level, according to Case-Shiller.
The national figure fell 4.2 percent in the first three months of the year and dropped 5.1 percent over the level a year ago. Case-Shiller is an index that started at 100 in January 2000.
"This month's report is marked by the confirmation of a double-dip in home prices across much of the nation," David Blitzer, index committee chairman at S&P Indices, said in a statement.
Blitzer said home prices rebounded slightly in 2009 and 2010 mainly because of the first-time home buyers tax credit.
But since December, home prices have slipped in many areas, Blitzer said. In March, Las Vegas and 11 other cities "fell to their lowest levels as measured by the current housing cycle," he said.
DIFFERING VIEWS
Still, Paul Bell, president of the Greater Las Vegas Association of Realtors, said Case-Shiller data are 90 days old and said he sees a brighter outlook based on more current and reliable multiple listing service statistics that the association compiles.
The typical $125,000, one-story house with three bedrooms and two baths is selling quickly. "If you want that type of product, you better buy it now," Bell said. "These things are selling faster than pancakes at IHOP."
Even $1 million-plus single-family homes are starting to come back although slower than the average home, he said.
But Tim Kelly Kiernan, a certified distressed property expert with ReMax Extreme, took a different perspective. Case-Shiller has been "pretty much on the mark" with its home price index, he said.
"I advise my sellers that unless they really have to sell, don't sell," Kiernan said. Nationwide, roughly 92 percent of homeowners say it's a bad time to sell their home, according to the latest Thomson Reuters/University of Michigan index of consumer sentiment.
But Kiernan agreed with Bell that the time is right for long-term buyers.
"The prices are the lowest in many years, but don't expect any (home price) appreciation anytime soon," he said.
STABILIZATION EXPECTED
Jeff Thredgold, economist for Nevada State Bank, said home prices might fall a little more, but mortgage rates are within one-half point of their lowest level in 50 years, about 4.6 percent on 30-year, fixed rate products.
A homebuyer could buy at a lower price if he waits but wind up paying a higher interest rate on his mortgage, Thredgold said. "I suspect (home prices) will probably dip a little lower over the next couple of months, but most of the pain is behind us."
"By the later part of the year, I think you will see some stabilization in home prices, and some markets may see some improvement, but it's going to be slow and painful," Thredgold said.
One obstacle to a rebound in prices: a delay in processing foreclosures. Homes in foreclosure sell at a 20 percent discount on average, which can hurt prices in the neighborhood. But many foreclosure sales have been delayed while federal regulators, state attorneys general and banks review how those foreclosures were carried out over the past two years.
Once those homes are eventually foreclosed upon, they will cause prices to fall even further. Those declines are "etched in stone," said Patrick Newport, U.S. economist at IHS Global Insight.
Thredgold pointed out that the Nevada housing bust was born in the boom of the early 21st century.
Home prices in Nevada, California, Arizona and Florida doubled between 2003 and 2007, Thredgold said.
"Obviously, areas like Las Vegas and Phoenix and various parts of Florida are down more than (other areas) because they were up higher," he said.
During the housing boom days, lenders made a flood of subprime mortgages to buyers with below-standard credit. Many of these borrowers couldn't pay the monthly mortgage bill after teaser rates ended. Defaults spread to prime homeowners with better credit when they lost their jobs.
The massive number of foreclosures drove down home values for others, and some of them decided to walk away and make a strategic default, causing home prices to decrease even more.
Resale home prices plunged 12.5 percent over the past year to $112,000 from $128,000 in April, according to Home Builders Research. New Home prices dropped 6.6 percent to $186,900 from almost $200,000 in the same period.
However, sale of foreclosed houses, many of which are extensively damaged and looted, are skewing the averages, said Forrest Barbee, corporate broker at Prudential Americana Group.
Traditional sales by homeowners with equity are doing better, he said. Statistics he compiled for Equity Title of Nevada indicated that homeowners with equity sold 937 houses for a $200,000 average during May.
Areas near employment centers and in master-planned communities, such as Summerlin, are doing well, Bell said. North Las Vegas is overbuilt, but the new Veterans Administration hospital is attracting health care professionals and retired military veterans, he said.
"Jobs are everything," Barbee said.
Thredgold predicted even the jobs market will improve before housing, however. "Housing is contributing nothing to the recovery," he said.
Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420. The Associated Press contributed to this report.
HOA official, state senator debate HOA legislation
By Hubble Smith
LAS VEGAS REVIEW-JOURNAL
Posted: May 31, 2011 | 4:30 p.m.
Nevada homeowners may get "trapped" in foreclosure by legislation passed on Memorial Day by the state Assembly requiring mediation and nonbinding arbitration for HOA complaints, a Las Vegas homeowners' advocate said Tuesday.
Senate Bill 254 could cost homeowners their homes if they can't afford to pay for the mediator and arbitrator, said Jonathan Friedrich, a Rancho Bel Air resident who is leading efforts in Carson City to reform homeowners association regulations.
If complaints can't be resolved in mediation, they go to arbitration, with the $1,000 cost split between the homeowner and HOA. Arbitration goes against homeowners in 85 percent of the cases, Friedrich noted.
"Now the arbitrator socks the homeowner with reasonable attorney fees, whatever that is. Now you can't pay it, they put a lien on your house and now they can foreclose on you," Friedrich said. "All because you filed a complaint. That's the trap."
State Sen. Allison Copening, D-Las Vegas, author of SB 254, said the bill is good for homeowners. It puts a cap of $225 an hour on mediation when the going rate is about $300 an hour and caps arbitration fees at $1,000, she said.
"The problem with the current situation is mediation and arbitration can get expensive because there are no caps in place," Copening said. "SB 254 creates a process by which a complaint is immediately referred to mediation because most cases are resolved in mediation."
The bill passed by a 35-7 vote.
Homeowners who felt they were unfairly fined often discover they were indeed in violation of HOA codes, covenants and regulations when the by-laws are presented at mediation, she said.
"That doesn't take away that some homeowners feel they're being harassed or they're getting too many notices and they're not given the opportunity to fix the problem," the state senator said.
Copening said the Nevada Real Estate Division established an ombudsman office to handle HOA alternative dispute resolution, but the office was insufficiently compensated to handle the case load. People were waiting months upon months to get an issue resolved, she said.
Friedrich said SB 254 will drive home prices in HOAs down further because nobody will want to be subjected to the "tyranny" and "uncontrolled abuses" of the board.
"HOAs are a social experiment that failed in America," he said.
Friedrich favored Assembly Bill 448, introduced by Assemblyman Harvey Munford, D-Las Vegas, but that bill was killed and parts of it were rolled into SB 254.
The Commission for Common Interest Communities, which oversees HOAs for the Real Estate Division, added about 600 words to SB 254 and changed its terms without sending it back to the Legislative Counsel Bureau for review, Friedrich said. Much of AB 448 was removed, he said.
Copening said the commission took out those parts that would "muddy" otherwise good legislation. While AB 448 is technically dead, some of it may find its way into Senate Bill 174, which seeks to cap HOA collection agency fees at $1,500, she said. Current regulations set the cap at $1,950.
Kevin Wallace, president and chief executive officer of RMI property management firm, said very few homeowners have ever faced foreclosure action from HOAs. Friedrich is off base with his assertions, he said.
"That's a scare tactic more than anything," Wallace said. "We manage 90,000 doors and I can tell you I get emails every day from homeowners thanking us for representing them in the Legislature. The vast majority of homeowners are happy where they live and interact with the HOA boards rarely. But a dozen or so have had bad experiences."
Limiting fees to $500 for a homeowner is a "bargain" for situations that require arbitration, he said.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
LAS VEGAS REVIEW-JOURNAL
Posted: May 31, 2011 | 4:30 p.m.
Nevada homeowners may get "trapped" in foreclosure by legislation passed on Memorial Day by the state Assembly requiring mediation and nonbinding arbitration for HOA complaints, a Las Vegas homeowners' advocate said Tuesday.
Senate Bill 254 could cost homeowners their homes if they can't afford to pay for the mediator and arbitrator, said Jonathan Friedrich, a Rancho Bel Air resident who is leading efforts in Carson City to reform homeowners association regulations.
If complaints can't be resolved in mediation, they go to arbitration, with the $1,000 cost split between the homeowner and HOA. Arbitration goes against homeowners in 85 percent of the cases, Friedrich noted.
"Now the arbitrator socks the homeowner with reasonable attorney fees, whatever that is. Now you can't pay it, they put a lien on your house and now they can foreclose on you," Friedrich said. "All because you filed a complaint. That's the trap."
State Sen. Allison Copening, D-Las Vegas, author of SB 254, said the bill is good for homeowners. It puts a cap of $225 an hour on mediation when the going rate is about $300 an hour and caps arbitration fees at $1,000, she said.
"The problem with the current situation is mediation and arbitration can get expensive because there are no caps in place," Copening said. "SB 254 creates a process by which a complaint is immediately referred to mediation because most cases are resolved in mediation."
The bill passed by a 35-7 vote.
Homeowners who felt they were unfairly fined often discover they were indeed in violation of HOA codes, covenants and regulations when the by-laws are presented at mediation, she said.
"That doesn't take away that some homeowners feel they're being harassed or they're getting too many notices and they're not given the opportunity to fix the problem," the state senator said.
Copening said the Nevada Real Estate Division established an ombudsman office to handle HOA alternative dispute resolution, but the office was insufficiently compensated to handle the case load. People were waiting months upon months to get an issue resolved, she said.
Friedrich said SB 254 will drive home prices in HOAs down further because nobody will want to be subjected to the "tyranny" and "uncontrolled abuses" of the board.
"HOAs are a social experiment that failed in America," he said.
Friedrich favored Assembly Bill 448, introduced by Assemblyman Harvey Munford, D-Las Vegas, but that bill was killed and parts of it were rolled into SB 254.
The Commission for Common Interest Communities, which oversees HOAs for the Real Estate Division, added about 600 words to SB 254 and changed its terms without sending it back to the Legislative Counsel Bureau for review, Friedrich said. Much of AB 448 was removed, he said.
Copening said the commission took out those parts that would "muddy" otherwise good legislation. While AB 448 is technically dead, some of it may find its way into Senate Bill 174, which seeks to cap HOA collection agency fees at $1,500, she said. Current regulations set the cap at $1,950.
Kevin Wallace, president and chief executive officer of RMI property management firm, said very few homeowners have ever faced foreclosure action from HOAs. Friedrich is off base with his assertions, he said.
"That's a scare tactic more than anything," Wallace said. "We manage 90,000 doors and I can tell you I get emails every day from homeowners thanking us for representing them in the Legislature. The vast majority of homeowners are happy where they live and interact with the HOA boards rarely. But a dozen or so have had bad experiences."
Limiting fees to $500 for a homeowner is a "bargain" for situations that require arbitration, he said.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
Las Vegas housing market fluctuating
By Hubble Smith
LAS VEGAS REVIEW-JOURNAL
Posted: Jun. 3, 2011 | 2:00 a.m.
The housing market is going through a "catfish recovery," finding the bottom and then coming up for air before going down again, market analyst Scott Sambucci of San Francisco-based Altos Research said Thursday.
It's different from the "double dip" reported by the national media and shows nothing more than the historical volatility of housing prices, Sambucci said during a 40-minute webcast.
The analyst said he "respectfully disagrees" with statements made by David Blitzer, chairman of the Standard & Poor Case-Shiller Index widely used as a measuring stick for home prices. Blitzer said home prices "continued their downward spiral with no relief in sight."
Most of the data used in the Case-Shiller index is three to six months in the "rearview mirror," Sambucci said. He's seeing a seasonal uptick in real-time prices that probably won't show up in Case-Shiller's index until late summer or early fall, he said.
The "catfish recovery" is a much better description of the market, Sambucci said.
Catfish spend their time moving slowly along the bottom of lakes and rivers, bobbing up and down from place to place without a clear direction, he said. They'll swim to the surface to eat and then return to the bottom.
"Plan for prices over the long term to hit a bottom, rise a bit, sink back down, rise again -- a pattern we expect with the housing market for several years," Sambucci said. "The housing recovery will take a long time and it is going to happen slowly."
May numbers are showing signs of strength in the market, as did March and April numbers. Prices are rising in all 20 cities tracked by Altos Research except New York and Las Vegas, which experienced only moderate declines.
The firm showed Las Vegas with an average home price of $140,598 in May, a decrease of 0.76 percent from the previous month and down 1.92 percent over the last three months.
The new Altos Mid-Cities Composite is also showing signs of strength in markets across the country. This composite examines an alternate set of smaller metropolitan statistical areas across the country to counter the volatility seen in larger, mostly coastal cities in the Case-Shiller index.
"Volatility is what we're talking about in the catfish recovery," Sambucci said. "Watch housing just like other assets. You're not going to get one, two, three, five, 10 or 15 years of growth. You're going to get volatility and finding that inflection point is the opportunity to make money."
Those who say strong job gains are needed to bolster housing are thinking backward, said Quinn Eddins, director of research for New York-based RadarLogic.
The bulk of jobs created during the housing boom disappeared when the market collapsed and builders stopped building new homes. Competition from distressed property sales are keeping housing starts near historic lows.
The problem is the huge supply of homes already in foreclosure or on their way, Eddins said.
"It could take years for the inventory of distressed homes to be absorbed and for prices to stabilize to the point where new construction is deemed to be a worthwhile endeavor," he said. "As such, sustained and robust job creation will not occur in the construction sector until the excess supply of homes is absorbed and homebuilding resumes in a sustained and robust manner. And even then, not all of the construction jobs lost in the great recession will return."
Rather than watch for job growth, watch the banks for a real measure of when the housing market hits bottom, Eddins said. They know the depth of inventory overhang because they own most of it.
Banks recognize that current dynamics suggest further declines in value and are requiring larger down payments. When banks start lending 85 percent loan-to-value as opposed to 70 percent or 75 percent, that will be a good sign that they either feel comfortable with the market or they will have figured out a new way to manage the risk.
Sambucci said he's seeing more higher-end homes move through the real estate-owned inventory, which is a good sign.
Pricing of new listings has been accelerating rapidly since spring and the price of listings being absorbed also moved higher, another good sign for the market, he said.
"Typically you assume prices will move up in the spring and this is the first time in four years we've seen that trend," he said. "This data is not captured in lagging data indices out there."
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
Altos Research Price Composite MSA May
Price 1-month
change 3-month
change
Denver $321,820 1.95% 5.24%
Las Vegas $140,598 -0.76% -1.92%
Los Angeles $596,001 1.56% 2.94%
Phoenix $230,028 2.26% 5.63%
Portland $285,332 0.86% 1.37%
Salt Lake City $293,426 0.85% 1.54%
San Diego $595,105 1.19% 3.04%
San Francisco $648,018 3.33% 8.36%
San Jose $706,051 3.14% 7.59%
Seattle $335,425 0.69% 1.08%
SOURCE: Altos Research
LAS VEGAS REVIEW-JOURNAL
Posted: Jun. 3, 2011 | 2:00 a.m.
The housing market is going through a "catfish recovery," finding the bottom and then coming up for air before going down again, market analyst Scott Sambucci of San Francisco-based Altos Research said Thursday.
It's different from the "double dip" reported by the national media and shows nothing more than the historical volatility of housing prices, Sambucci said during a 40-minute webcast.
The analyst said he "respectfully disagrees" with statements made by David Blitzer, chairman of the Standard & Poor Case-Shiller Index widely used as a measuring stick for home prices. Blitzer said home prices "continued their downward spiral with no relief in sight."
Most of the data used in the Case-Shiller index is three to six months in the "rearview mirror," Sambucci said. He's seeing a seasonal uptick in real-time prices that probably won't show up in Case-Shiller's index until late summer or early fall, he said.
The "catfish recovery" is a much better description of the market, Sambucci said.
Catfish spend their time moving slowly along the bottom of lakes and rivers, bobbing up and down from place to place without a clear direction, he said. They'll swim to the surface to eat and then return to the bottom.
"Plan for prices over the long term to hit a bottom, rise a bit, sink back down, rise again -- a pattern we expect with the housing market for several years," Sambucci said. "The housing recovery will take a long time and it is going to happen slowly."
May numbers are showing signs of strength in the market, as did March and April numbers. Prices are rising in all 20 cities tracked by Altos Research except New York and Las Vegas, which experienced only moderate declines.
The firm showed Las Vegas with an average home price of $140,598 in May, a decrease of 0.76 percent from the previous month and down 1.92 percent over the last three months.
The new Altos Mid-Cities Composite is also showing signs of strength in markets across the country. This composite examines an alternate set of smaller metropolitan statistical areas across the country to counter the volatility seen in larger, mostly coastal cities in the Case-Shiller index.
"Volatility is what we're talking about in the catfish recovery," Sambucci said. "Watch housing just like other assets. You're not going to get one, two, three, five, 10 or 15 years of growth. You're going to get volatility and finding that inflection point is the opportunity to make money."
Those who say strong job gains are needed to bolster housing are thinking backward, said Quinn Eddins, director of research for New York-based RadarLogic.
The bulk of jobs created during the housing boom disappeared when the market collapsed and builders stopped building new homes. Competition from distressed property sales are keeping housing starts near historic lows.
The problem is the huge supply of homes already in foreclosure or on their way, Eddins said.
"It could take years for the inventory of distressed homes to be absorbed and for prices to stabilize to the point where new construction is deemed to be a worthwhile endeavor," he said. "As such, sustained and robust job creation will not occur in the construction sector until the excess supply of homes is absorbed and homebuilding resumes in a sustained and robust manner. And even then, not all of the construction jobs lost in the great recession will return."
Rather than watch for job growth, watch the banks for a real measure of when the housing market hits bottom, Eddins said. They know the depth of inventory overhang because they own most of it.
Banks recognize that current dynamics suggest further declines in value and are requiring larger down payments. When banks start lending 85 percent loan-to-value as opposed to 70 percent or 75 percent, that will be a good sign that they either feel comfortable with the market or they will have figured out a new way to manage the risk.
Sambucci said he's seeing more higher-end homes move through the real estate-owned inventory, which is a good sign.
Pricing of new listings has been accelerating rapidly since spring and the price of listings being absorbed also moved higher, another good sign for the market, he said.
"Typically you assume prices will move up in the spring and this is the first time in four years we've seen that trend," he said. "This data is not captured in lagging data indices out there."
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
Altos Research Price Composite MSA May
Price 1-month
change 3-month
change
Denver $321,820 1.95% 5.24%
Las Vegas $140,598 -0.76% -1.92%
Los Angeles $596,001 1.56% 2.94%
Phoenix $230,028 2.26% 5.63%
Portland $285,332 0.86% 1.37%
Salt Lake City $293,426 0.85% 1.54%
San Diego $595,105 1.19% 3.04%
San Francisco $648,018 3.33% 8.36%
San Jose $706,051 3.14% 7.59%
Seattle $335,425 0.69% 1.08%
SOURCE: Altos Research
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