Tuesday, May 22, 2007

This may be the best time in history to buy a home in Las Vegas.

This may be the best time in history to buy a home in Las Vegas.

April's housing data for Las Vegas, as expected, was a continuation of the
housing bottom we have been scraping along for nearly six months. But, for the
first time, there appeared to be some minute improvements worth noting.

Despite the negativity of national reports - particularly Fiserv Lending
Solutions which has predicted that Las Vegas will be the worst market in the US
for housing appreciation this year - pricing in the market remained very stable.

----->In fact, prices for existing homes remained above last year's levels and
were an improvement on March's median ($284,900 median).
----->And despite very weak sales, the new home sector also maintained relative
price stability ($323,990 median).

Another improvement in the market appeared to be the increase in New Home
Permits, a continuation of the trend reversal that began last month. But, this
information must be tempered by the knowledge that laws regarding how permits
are obtained are in the process of review and change. Builders may be
stockpiling in advance of a change in the law.

Nonetheless, the long drought on new home permits may impact the market
significantly. In April, we saw a net loss of four new home communities. When
you consider that there are 545 active new home subdivisions in the Las Vegas
market - the highest per capita in the known universe - that doesn't seem like
much.

----->But, now, combine these three facts:
(1) March boasted the highest number of new home subdivisions in Las
Vegas history.
(2) The number of new home subdivisions had been growing steadily since
2005.
(3) New home permits are off 48.2% for the year.

Somehow, that very slight decline in the number of new home subdivisions
assumes slightly greater importance. It is possible that we are seeing the
first downturn in new home inventory. However, the same cannot be said for the
resale market, which is at a record high 24,038 units. Until there is a
downturn in new home inventory, resale--the number of active new home
communities--existing home inventory will remain relatively high.

Still another improvement in the market is relative stability in sales numbers.
While it is true that both new and existing home sales were well below last
year's levels (40.2% and 30.3% respectively), both segments of the traditional
market were at similar sales level as the previous month. Other analysts have
pointed to the lack of the usual seasonal sales uptick in the month of April and
have called these sales results "dismal."

Of course, they are correct in that assessment. The 1,548 new home sales and
2,489 existing home sales are dismal for April. But, the fact that we haven't
slipped lower is one more sign that we may be on a real rather than a false
bottom.

----->We are not suggesting that a rebound is around the corner. What we think
these statistics suggest is that we may have begun the long, laborious process
of returning to normalcy.

April's statistics underscored another important point: Vertical construction is
becoming more and more powerful as an element in the housing market. Based on
the statistics in Fast Facts and our own research, the number of Vertical units
closed in 2007 will easily be 30-50% more than last year. We will certainly see
5,000 closings of Vertical product this year.

You can look at the glass half empty or you can look at the glass half full.
The way we see it, right now the Las Vegas real estate industry needs a drink!
Respectfully submitted,
Larry Murphy Steve Bottfeld
SalesTraq Marketing Solutions

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1 Comments:

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