1.AEI fellow Alex Pollock in his book "Boom and Bust" (emphasis mine):
"It was thought that a serious fall in house prices would not, and probably could not, happen nationwide and drag down the entire national average. Many professional observers - realtors, bankers, financial analysts, investors and credit raters - believed that the national home price average might stagnate for a year or more, but nearly everyone also thought that it could not actually go down. So even the mortgage finance professionals, by and large, thought that house prices would not fall on a national basis, let alone by 30 percent! But they did."
"It was thought that a serious fall in house prices would not, and probably could not, happen nationwide and drag down the entire national average. Many professional observers - realtors, bankers, financial analysts, investors and credit raters - believed that the national home price average might stagnate for a year or more, but nearly everyone also thought that it could not actually go down. So even the mortgage finance professionals, by and large, thought that house prices would not fall on a national basis, let alone by 30 percent! But they did."
"We should know from experience that many things once considered impossible have nonetheless come to pass. Afterward, we wonder why they were considered impossible. In the midst of the crisis and the bust, the recovery of housing, mortgage and financial markets, the banking system, and the general economy feels impossible, but nonetheless eventually happens."
"Las Vegas homebuilders can’t build houses fast enough these days to keep up with buyers’ demand. Yes, you read that right. The valley’s new home market is booming. Developers say they haven’t built, or sold, so many houses in years.
“I’m as much as 80 to 90 percent higher in volume than last year,” said Robert Beville, president of Harmony Homes. “I’ll probably more than double my deliveries this year.”
Applications for new home permits in Henderson, North Las Vegas, Las Vegas and Clark County have increased 40 percent from last year. Prices have risen 6 percent to an average of $201,000, and sales have jumped 20 percent. By June, experts expect to see 500 new-home closings a month.
There are 20 percent fewer single-family homes available on the Multiple Listing Service today than last year. There are 30 percent fewer condos and townhouses. Properties that a year ago would have sat on the market for weeks or months are now getting as many as 15 offers. List prices have become minimums. Most existing homes are selling for thousands more.
That’s if buyers can get them. A little more than 5,000 units are available for sale right now, the fewest since 2006 and an almost 60 percent drop from last year. Market conditions have combined to make it difficult for most buyers to purchase older homes.
Perhaps the biggest winners in the revived housing market are construction workers, particularly specialists. Framers, for example, are in high demand. Many left the state when the housing market deflated, and the ones who stayed took jobs in other fields. Now, homebuilders are entering bidding wars to hire those who are left."
HT: Gary Lyle for the Las Vegas report.
What recovery?
ReplyDeleteWho are the occupants of these homes and what's the source of their mortgage payments?
ReplyDeleteI invest in real estate in Las Vegas and these are accurate statements. But keep in mind Assembly Bill 284, which was passed last November, makes it harder for banks to go through the process of foreclosing on homes. So this is a temporary inventory shortage, although longer term, it appears Las Vegas real estate should do just fine.
ReplyDeleteI invest in real estate in Las Vegas and these are accurate statements. But keep in mind Assembly Bill 284, which was passed last November, makes it harder for banks to go through the process of foreclosing on homes. So this is a temporary inventory shortage, although longer term, it appears Las Vegas real estate should do just fine.
ReplyDeleteWhy should Vegas RE do well in the long term? After all, the Asians have Macao and other destinations that are far more attractive to some of them. Many Americans have local options that did not exist not too long ago. It seems to me that the gambling money is spread out among many more places. That means that there will be less growth than was expected and that the inventories may take far longer to clear than many people believe.
The Fed is "successfully" re-inflating the bubble, er, blister.
ReplyDelete