BluefoxToday blog : Las Vegas new single-family house market draws recovery prediction

Las Vegas new single-family house market draws recovery prediction

A lot of time and money is spent annually in foreseeing the future in a variety of areas. From the familiar to the strange. As expected, the mortgage and real estate markets have seen their fair share of this. Some of these studies are more accurate than others, after they are later independently checked for accuracy. But overall, the results of these novel exercises appear to be off the mark, sometimes way off.

In any case, here is the latest for Las Vegas. According to a new housing market study completed by the Concord Group, Southern Nevada can expect its new single-family home sector to pick up in the first quarter of 2012. That comes to about three years from now. This national projection relies on analysis of unsold inventory, anticipated shifts in the employment picture and demand, rather decent criteria.

One key component, however, ought to be included, and that is the foreclosure category. Currently bank REOs, or real estate owned, clearly dominate sales at the Las Vegas housing market. Banks are now unloading property at fire-sale prices and first-time buyers and savvy investors are all over them. The average existing home value is today at $125,000 while for a new home it is at $226,000, says SalesTraq. That is a huge gap and leaves the builder product at a distinct disadvantage.

With that in mind, foreclosures seem to be the single most important factor determining the Las Vegas market's future performance for new homes. Once the REO segment is whittled down to somewhere near the historical norm, then the new home front will start recovering, when it'll be in a much better position to compete in price.

So, when will that happen? Good question. Could be that the Concord Group is right.

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Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst 

www.BluefoxToday.com - syndicated mortgage, housing and property management blog

eskokiuru@gmail.com
My cell: 702-499-1006

Comment balloon 14 commentsEsko Kiuru • May 26 2009 09:19PM

Comments

Hi Esko;

Great post and thank you for sharing with us. Good Luck!

Posted by Anthony Stokes-Pereira, Realtor (Better Homes and Gardens Rand Realty) almost 9 years ago

Man that seems like a life time away .. so what to do between now and then

Posted by Eric Reid (Renaissance Realty Group of Keller Williams Atlanta Partners) almost 9 years ago

I don't know but I am going crazy trying to find immediate inventory for my clients!  Let's hope if they have the "shadow" inventory that it gets dumped soon while interest rates are at historic lows and buyer interest is at all time highs.

Great post as always!

Posted by Renée Donohue, Las Vegas Real Estate Broker - www.urLVhome.com (Savvy Home Strategies Realty, LLC-REALTOR®-Estate-Probate) almost 9 years ago

HI Esko. We are seeing a real pick-up already. I hope it works out well in your area too, sooner than expected.

Posted by Bob Foster (Century 21 Lanthorn R. E. Ltd. Belleville, Ontario) almost 9 years ago

Hi Esko, Good post. Thanks for sharing.

Best - Sash

Posted by Sasha Miletic - Windsor Real Estate (RE/MAX Preferred Realty Ltd.) almost 9 years ago

Esko, hummmmm 2012???  Let' hope that they are wrong and that it happens sooner than that.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 9 years ago

Hey Esko,

I hear you in terms of "future predictions" not always being accurate. Usually it's overly positive, and to a fault. But 2012...that seems a lot later than I would have thought!?! Granted I'm not in Vegas real estate, but three years seems like a long time, especially when some experts predict the hardest-hit areas will recover first (granted that's just a theory).

It's interesting that Renee brought up shadow inventory -- does anyone know how much inventory hasn't been released? If REO sales "clearly dominate sales at the Las Vegas housing market," than is the Vegas market better or worse off than people think? Are most of the foreclosed properties being sold off, or are there just so many that, even with REO dominating sales, there are still masses of shadow properties waiting to be listed?

Nice post, we're always interesting is housing recovery -- especially in places like Vegas,

Tim Manni (blog.hsh.com)

Posted by Tim Manni almost 9 years ago

Anthony,

Thanks for stopping by.

Posted by Esko Kiuru almost 9 years ago

Eric,

It could be that long, unfortunately.

Posted by Esko Kiuru almost 9 years ago

Renee,

The "shadow" inventory evidently is there, I hear, but when is it going to be released?

Posted by Esko Kiuru almost 9 years ago

Bob,

Good to hear that things are moving along over there. Our new homes are sort of stuck in place.

Posted by Esko Kiuru almost 9 years ago

Sash,

Any time. Good to hear from you.

Posted by Esko Kiuru almost 9 years ago

George,

That is a few moons away. Hopefully thay are off the mark on this one.

Posted by Esko Kiuru almost 9 years ago

Tim,

The "shadow" inventory topic has been around for a while. The numbers are in the thousands, according to street talk, but no one really knows. And the banks aren't talking.

Posted by Esko Kiuru almost 9 years ago

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