Crystal Ball is Cloudy

“The clear problem in the housing market today is not foreclosures, but negative equity; and as long as the focus remains on the symptom rather than the disease we will see little progress towards real solutions and this crisis will drag on for years to come," says Sean O’Toole, CEO and Founder of ForeclosureRadar.com.

“…80% of people who have a mortgage in Las Vegas are underwater. 16% are delinquent on their mortgage payments. Why …? Some cannot make their payments... but many others simply don’t want to continue making mortgage payments on a house that is worth only half of what they owe on it,” reports Kristy Black, Business Development, Fidelity National Title.

What does this mean for prices? I have been trying to get a handle on it and I think it means "don’t believe much of anything you read until after the election." The arrows on the sign posts are all pointing in different directions depending on the agenda of the writer.

I think Mr. O’Toole’s “drag on for years to come” statement might sum it up. Google News articles hint that we sales are up (start of recovery!) but prices are falling (no recovery yet!) and may continue to fall.

So, if you need to sell, the possible continued fall in prices makes NOW better than Later. And if you need a house, buy a house. Even if you wait, it’s always going to be something.
If you want to bet on lower prices and you can wait, then wait. Just call me when you are ready … and please share with me what made you pull the trigger. We all want to know!
My Magic Crystal 8-Ball is cloudy.

August Market Data - the Patient has a Pulse

In Las Vegas in August, the inventory of single family homes was climbing to about 5000 units … but it was still below one year ago and was also at it’s lowest August level in 5 years. The ratio of homes listed to homes sold in 2010 is 62%, second highest in 5 years, but still behind last year’s 67% - when, as a buyer, it was really hard to get into contract. In the same way, the number of single family homes closed is lagging behind last year. With four months to go in 2010, total sales have almost equaled the 5 year low of 2008 at almost 30,000 homes. And, the average sale price, at $168,000, is slightly below last year’s average and slightly below the 2010 high, both about $170,000. On the rental front, occupancy is at 82% which is better than the 76% average of 2009, but not quite as good as the previous three years.

So, what does it mean?

It’s like hurricane Igor still in the Atlantic. The experts say it should be turning one way or the other, but it is just continuing to slide along in the same direction with dire warnings posted well in advance.
Given this is an election year, I don’t look for any big news to be validated by the national media until after the elections.

On the local front, the House Team has sold each of their three traditional listings this summer in less than a week, two of them above list price! The reason, we believe, is buyer frustration with banks and lack of bank approval on short sales. If you need to sell, sooner may be better. If the Bad News Bears come out again after November 2nd, it could hurt your sale price.

Vegas Sales fall in July but Sky does Not ...Yet

Not that I think prices couldn't fall some time in the future because of a large phantom inventory of foreclosures (They might), but the BADNEWS media making hay of the July drop in home sales to sell their newspapers doesn't tell the whole story.
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In Las Vegas, one of the hardest hit markets in the US, the number of home closings fell from 3360 closings in June to 2948 in July.
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That's a drop of 12% from June of this year and a drop of 21% from July one year ago, BUT June and July 2009 sales were some of our highest closing numbers on record - ever.
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In Las Vegas, any time we sell more than 2900 homes a month, business is brisk. If, between the banks' mismanagement of the real estate industry they now control by default and the Media Bad-NEWS-Bears, a further drop in home prices is engineered, closing numbers in Vegas will go through the roof as cash investors swoop in
like vultures. But, should we hit 4000 sales in a month, and further drop in home prices could trigger that, I trust no one will note the increased sales volume.
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Have I mentioned short sales? Yes, I have. When lots of people put short sales in contract and only 5-7% of them close, closing numbers are apt to dip. Added to the investors who have decided to wait to see if prices really do fall, plus the end of the home buyer tax credit, it is a wonder that Las Vegas closings are down only 12% from June, 1020.
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It is not unusual for Las Vegas closings to dip in July and flatten out in August. If the drop becomes a trend over the next couple of months, that might be significant. Otherwise,..."Papers! Get yer Papers Here!"

Redfin Coming to a Las Vegas near You

I just began the interview process with Redfin (link below) to become one of their Realtors when the expand into Las Vegas. It looks like a great, transparent, client friendly program and the Realtors are kept in line through client performance ratings. As a heads-up to my clients, they may contact you to see what kin...d of service I provide. Please be kind. In the meantime, check them out!
Best wishes,
GH

Builders offer Buyer agents Incentives ... Again

Recently, by email, Lennar announced to me and other Las Vegas Realtors, $2500 Agent Bonus - for August Closings - 3.25% Interest Rate Available; Woodside advertised $12,500 commissions at Providence; Pardee Homes offered a $1,000 Design Studio credit to pass along to any client who purchases a Move-In Ready home at Riverstone; Pulte Homes - Fall-Out Inventory - 7% CO-OP; and Woodside had 4 Percent Co-Op on Homes Starting at $139,990. The last time the builders did this, it was out of desperation. Watch your back. Stay Alert.

Copyright Infringement as a source of funds

Publishers of print media, in particular, and every other kind, in general, have begun surfing blogs to look for possible copyright infringement lawsuits. This has been emailed as a warning to all Realtors from our Board of Realtors, since we are such easy targets. I have looked over my 2010 blog posts and decided that they are OK, inflammatory sometimes, but not a violation of any copyright. The previous 100 posts going back to the wild wild west of 2007, I deleted. There were too many to comb through and there is no need to give ammunition to fishermen.
Happy 2010.

Interest rates at 50 year lows

Southern Fidelity Mortgage confirmed this morning that interest rates are at 50 year lows. They also have people who can help repair your credit. Sound like a good combination? Call me.