The Bottom is Near if not Already Here
Posted on February 27, 2010
Filed Under PreForeclosure Listings |
After highs of late 2006 and early 2007 the Las Vegas housing market has been free falling. Loosing almost $10,000 a month for most of the last year the median priced home has dropped from around $300,000 in 2007 to around $180,000 today.
Because of foreclosures the opportunities to buy great homes at low prices are everywhere. But Las Vegas is truly leading the pack as 1 in 76 homes in the Las Vegas market is in some stage of foreclosure. (RealtyTrac) That is more than double the amount of its nearest rival Florida at only 1 in 173 homes. Arizona, California, and Michigan round out the top 5. Of the sales in October 86% of them are foreclosures or short sales.
Analysts like Steve Bottfeld of Marketing Solutions have been very bullish on the Las Vegas housing market over the years. Bottfeld talks about his 3 legged stool theory of how to gauge the bottom of the market. First, he looks at the inventory of homes listed on the multiple listing service (MLS). Second, he looks at the volume of business or simply the number of homes being sold in the marketplace. Lastly he looks at the third leg of the stool, the average median price of the home. As Bottfeld states, once the inventory stops increasing, the volume starts upward and the price stops going down you have found the true bottom of the market. From the data that we now have available to us it appears as though that elusive bottom is right around the corner if not sitting right in front of us.
Stool Leg Number 1: Inventory Stops Increasing
Rick Shelton or ReMax and Associates and 2010 president ?elect of the Greater Las Vegas Association of Realtors (GLVAR), which happens to be the 5th largest MLS in the country recently spoke at the Real Estate Insider Club of Las Vegas. He discussed how the inventory of homes on the MLS had stopped going up and was running in a range of around 22,000 units on the market for several months running. After a dramatic increase over the last year or so the inventory appears to have finally peaked. And so the first leg of the stool appears to be taking shape towards recovery.
Stool Leg Number 2: Volume of Sales Picks Up Dramatically
The sales volume or number of homes that are now selling has been increasing all year from lows of late 2007. Sales volume in November 2008 was nearly double that of November 2007. Of course it helps that home prices are in some cases only 35% of where they were from their inflated highs of late 2006. I just put an offer in on a home for one of my investor clients for $96,000. The home sold in July of 2006 for $300,000 as it is listed for only $109,000. At a full price offer of $109,000 this represents a value of only 37% off of its high value in 2006. Although you will read in the paper about a 30% drop in values I am telling you that we are, in some cases, looking at a 70% decrease in home values in Las Vegas in certain areas. With prices as low as they are today it is no wonder the volume has shot up dramatically.
Stool Leg Number 3: Median Sales Price Slows to a Crawl
After dropping nearly $10,000 a month for the last year home prices fell only about $2800 last month to a level that puts us at near $184,000 for the average median price. From this point it appears as though the bottom is in site and possibly only a couple of thousand dollars away. As the third leg of the stool takes shape the savvy real estate investor realizes that the bottom is here or near and now is the time to start buying these low priced homes before the national media gets wind of it.
Investors that have been sitting on the sidelines are now stepping back into the market to grab up these low priced 2-year-old foreclosed homes lost by other less savvy investors and owner occupants that could not afford the homes they purchased at those inflated levels. Many of the new investors in the Las Vegas real estate market are foregoing the credit crunch and buying homes for all cash. These investors reentered the market as homes once again began to cash flow. Cash flow can be simply defined as the point at which the income (rent) from the property exceeds the costs of ownership (mortgage, taxes, insurance, property management, and maintenance etc)
Anyone that is looking to buy a home in Las Vegas should note that the timing may not get better than this. Interest rates are at historic lows in the 5.5% range. Even the national builders are getting into the game to compete against the foreclosures. New home manager for Richmond American Homes in Las Vegas Melissa Schmidtberger is promoting a 4.5%.5% 30-year fixed mortgage special at homes starting from $139,000. I never thought we would see national builders building at levels under $100 a square foot again but they are.
As of November 2008 over 18 builders both local and national now have prices starting at under $100 a square foot. With the government aiding first time buyers with tax credits up to $7500 and mortgages under 5% it is actually cheaper to own than to rent. It also appears as though new home prices are at the bottom as only 399 building permits for new homes were issued in October. This is the lowest level in decades.
I am actually very surprised that more owner occupants, second home buyers, vacation home buyers, and baby boomers looking to retire are not already in this market buying homes at 35 cents on the dollar. We all knew we were in a recession for the last year but it took the government a full year to realize it and report it to us. The same will be true on the bottom of this real estate market. If we wait until the news reports that the bottom of the market was a year ago we will be paying a lot more for that cheap foreclosure and we will be kicking ourselves saying, I wish I would have bought that home a year ago when it was a lot cheaper than it is now.
Glenn Plantone
http://www.articlesbase.com/business-articles/the-bottom-is-near-if-not-already-here-693486.html
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5 Responses to “The Bottom is Near if not Already Here”
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Why is my grown daughter's rejection of me having such a huge emotional turmoil on me ??
I am 56. My 28 yr old married daughter and with 2 babes, she doesn’t want me in her life. In complete shock to me, this started when she got engaged at age 24, I had no idea of her dis-like for me. Much longer story, but for here 
What I need to know is why is it "shutting me down"? It haunts my every moment ?? If you can suggest some things for me to start looking at or email me so we can talk, I know I can overcome this, but I can’t seem to shake it. I know God well, incase you were going to suggest I "get God" 
I am a 1/2 sick, retired elem teacher with no other family.
Please be kind with your answers, I am near rock bottom already
I think that you’re depressed and might want to consider finding a therapist to talk to. AS for being rejected by your daughter OF Course it’s going to hurt. I have three children 32,28 and 15 all girls and I would be devastated if one of them wanted to cut me out of her life. I’m not sure what the issues are but IF she and the children are the only family that you have it’s scary thinking that you won’t have them if you need them. You might see if you can talk to someone and find a way of healing the rift between you. I’m not sure that it could be done, but it might help you to know that you did all that you could to make things better. Talk to someone it’ will give you some place to vent. This time of the year particularly it’s hard to be with out family. I’ll keep you in my prayers. Good luck!!
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Try talking to her. 1st apologize for whatever you did to her and let her know that you are not/were not aware of the wrong that you did. Let her know that you are open & willing to work on whatever it is that you did to her. That will usually open up a channel to heal. Your daughter needs to know that you are repentant & willing to make things right with her.
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This is a difficult question because from what you said we really do not know why she doesnt want you in her life. If i had to guess, i would assume that before she got engaged, you and she spent alot of time together and you wanted to make alot of decisions for her (as parents like to do) Now she is older and has her own life and sometimes parents dont "get" that and still try to force there way in.
I suggest you approach the situation differently. Understand that she is a grown woman and doesnt need to be parented anymore. She has a husband who will take care of her now and be her support. I know its hard to not be needed by your children, but trying to force yourself in her life will only make things worse. Next time you talk to her, just listen to her and try to understand her. Dont try to give advice, or tell her what she should be doing(because i suspect you might be doing this)
But basically all you have to do is do what you should’ve done 10 years ago when she turned 18. You need to let go. Let her live. Once she knows you respect her space, she might even come to you for advice later. I wish there was something more i could say to make you feel better, but this is your journey of growth and if you are not growing you are dying so please try to grow from this.
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This hit particularly close to home. At the age of 29 I no longer communicate w/ my dad and I know it hurts him. I could really go on all day. But if I could boil it down to one thing both my sister and I were brought into this world for the wrong reasons. Both my parents thought that we would make THEIR lives better, or be THEIR children, or be THEIR companions, or be THEIR surrogate lovers.
This is all pretty deep stuff for any body to digest. But please understand that she is not YOUR child. YOU do not own her, and she was not brought into this world to be YOUR companion. It is up to you and you alone to look for areas to take responsibility for where you went wrong.
A good start would be to stop expecting that she owes you something. If a co-worker or friend can reject you so can a child. In my experience 99.9% of the time the blame lies squarely on the shoulders of the parent.
Second, invite her to a therapy session w/ you. AND BE PREPARED TO START APOLOGIZING!!! I can guarantee that you have done a lot of bad things (all parents do) and just like a friend or co-worker you would be quick to offer an apology.
Remember, she is not YOUR daughter any more. She is a peer. You wouldn’t talk down to a peer (and yes offering unsolicited advice to people is condescending) so why do you talk down to her?
Are you here to make HER life better???
Good Luck!!!
PS
And just as a side note, Are you a Jesus freak? Maybe she isn’t and pushing your values isn’t going to help either.
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