July 22, 2006

"There never was a bubble in Las Vegas, and there isn't one in the future. Prices have to continue to rise"

There's two types of denial I'm seeing. The first is the corrupt real estate industrial complex denial, which I understand, as the crash in home sales and prices is killing them. So like Baghdad Bob and Bill Clinton, deny, deny, deny.

Then there's just your total and complete idiot, who chooses to ignore the data for whatever reason, who hopes against hope.

As you read this article, you'll find it strange because it honestly addresses the inventory situation, but fails to grasp the effect supply and demand have on prices. The "experts" also do what the NAR is now doing to hide the truth, and compares prices versus the same month last year, when as we all know, last year was a million years ago.

Here's one study that predicted Vegas to have the biggest decline in the country this year. Enjoy what these fools in Vegas have to say, and boy, let's make sure we track 'em down next year...

Analysts: Home prices won't fall Values still going higher in Las Vegas

Despite historically high inventory, the cost of housing in the Las Vegas Valley increased in the first half of 2006 and will continue to rise through the end of the year, according to housing analysts.

At the quarterly Crystal Ball housing-trends seminar on Thursday, market watchers said the valley's residential real estate market has defied detractors who said the good times couldn't last.

"Home prices are still going up in Las Vegas," said Larry Murphy, president of real estate monitoring firm SalesTraq. "That flies in the face of bubble theorists. There never was a bubble in Las Vegas, and there isn't one in the future."

Yet prices were up 5.7 percent year-over-year in June, from a median of $273,000 in 2005 to $288,550 last month. In the first half of 2006, the median resale price was 7.1 percent ahead of the same time a year earlier.

"Existing-home prices have not collapsed. They've come down to a more normal pace, especially compared to the 40 (percent) or 50 percent we experienced in 2004," Murphy said.

Steve Bottfeld, a senior analyst with research firm Marketing Solutions, said the price increases should continue through the end of 2006 even as sales decline.

The overall falloff in closings will come as the market grapples with substantial inventory.
About 20,000 resales are on the market in Las Vegas as investors and homeowners with adjustable-rate mortgages look to trade in their properties.

"Speculators and people who bought homes with (adjustable-rate mortgages) in 2004 are in a lot of trouble and they're trying to get out," Bottfeld said.

The condominium-conversion market has a two-year supply of homes, with 15,785 apartment units designated as potential conversions, Murphy said, though he added there were no guarantees that all those rentals would change over to for-sale properties.

The sheer availability of housing options in Southern Nevada won't hamper appreciation in coming months, Bottfeld said.

"Prices have to continue to rise," Bottfeld said.

17 comments:

Joe Logic said...

They're off the deep end this time. Remember the monthly Reighburger (LV realtors' prez) quotes, aka "the true experts are bullish for '06" and "Lereah is focusing investments in Vegas"? It's gone from those cutsie quotes to flat out panic-style denial.

If you want to read some more funny cases of denial, there's this flipper troll in the Tracking LV post on ocrenter's blog who swears that Vegas houses prices will exceed OC and SD prices long term.

Anonymous said...

they must own tons of flipper houses themselves, and are talking up the market. someone dig up the real scoop please

Anonymous said...

Vegas is all about fleecing the visitors. That's the entire economy! Getting people to bet against house odds, getting people to buy tickets to shows, etc. Why not get them to buy overpriced real estate? Any sales pitch will do, as long as it creates transactions. And if you can call a sales pitch a "study", so much the better.

"If you lie down with dogs, you get up with fleas." - Ben Franklin

Anonymous said...

Prices have to continue to rise because I said so. Oh...and what was his name R. E. Bottlefed or R. E. Bubblehead.

BubbleShanker said...

Reminds me of a con I heard that was going on in the Casino's in the 80's. A guy would ask a poor out of town idiot if his credit card had been red dotted. The bag holder would pull out his credit card, the guy grabs it holds it up and says we have a winner! Then you have 10 other people in the con run up to the guy and congradulate him, in the mean time, they have taken his credit card and are charging a time share on it!

Vegas is garbage, housing is garbage, I just can't wait to see who gets knocked out first, VEGAS or PHOENIX, both are a hot stinky mess!

Chris G said...

Wow, there is a lot of things messed up with the people in the article, especially this Bottfeld guy. First it says he is from a company named Marketing Solutions, and yet he is making a prediction that prices will continue to rise. Lesson learned here...never ask a marketing guy to give predictions based on economics. He is also making comments that seem completely contradictory to each other, saying that people with ARMs will need to get out of their houses, and yet their houses will magically go up in price just like everything else.

And then this misleading comment:
"Despite historically high inventory, the cost of housing in the Las Vegas Valley increased in the first half of 2006 and will continue to rise through the end of the year, according to housing analysts."

Sounds like prices are going up in the first half....or are they? They YoY comparisons are up, not MoM in the first half. Another lazy journalist confusing the reader.

Chris G said...

I also believe that the guy who posts as "not buying the bubble" must hang out with these people. Another person who completely ignores the data and the economic fundamentals.

geeski said...

classic. look at data, ignore trends, and see what you want to see. vegas is toast. i don't know how anyone can afford a house there.

Anonymous said...

Joe logic,

I’m not a flipper! I am a landlord who owned residential real estate in Southern California. I’ve sold that real estate over the last 16 months. I am a member of a highly astute real estate investment group. The leader of that group is extremely bearish regarding California Real Estate. I did transfer my gains via 1031 exchange into other real estate including a minority interest in 2 small shopping centers in Summerlin.

All I did was make a case that LV could drop, but it would be nothing like what is going to happen in Orange County and San Diego were the home price to income ratio now exceeds 10 times. And then you call me a “troll flipper”. LOL. You’re a lying asshole!

Maybe you ought to wake up and stop listening to those little voices in your head. Read what I said slowly and literally!

“swears that Vegas houses prices will exceed OC and SD prices long term.” LIE! LIE! LIE!

Anonymous said...

The reason the average person doesn't believe it is because the average person doesn't track markets, investigate the % of loans that are risky, or frankly care.

All they see is houses in thier neighborhood going up and up. It's going to be a rude awakening. 2007 is going to open some eyes about ARM's.

Joe Logic said...

Anon:

And finally the medium home price in Summerlin will eventually be higher than OC, probably sometime in the next 5-8 years.
Posted: 4/16/2006 7:50 AM


This isn't you? If not I apologize. Since all you trolls post anonymously it's hard to tell. But if you believe this then you've popped one crack rock too many.

And yes, you are a troll. You troll bubble blogs attacking anyone who disagrees with you because of your "investments".

Anonymous said...

I said:

"And finally the medium home price in Summerlin will eventually be higher than OC, probably sometime in the next 5-8 years."

You said I said:

"there's this flipper troll in the Tracking LV post on ocrenter's blog who swears that Vegas houses prices will exceed OC and SD prices long term"

Now that's why I call lying! I don't think I have to tell you how it's lying.

Don’t lie to enhance what you perceive to be the truth! Stop listening to those voices in your head.

Oh … and another thing, this is the exact quote from Wikipedia:

“In Internet terminology, a troll is someone who comes into an established community such as an online discussion forum, and posts inflammatory, rude, repetitive or offensive messages designed intentionally to annoy and antagonize the existing members or disrupt the flow of discussion, including the personal attack of calling others trolls.”

Stop lying!

Anonymous said...

Is it possible for the bloggers here to post an intelligent comment without name calling and profanity...based on the collective maturity of the posts I've read here, you'd be a fool to seriously consider any of it when making real estate decisions. I thought the point of these forums was to provide an open, rational atmosphere to discuss the dangers of the inflated market. It reads more like the wall of a high school bathroom stall!!

Anonymous said...

Keith, Get a f>cking grip.

You have 6 1/2+ years of examples of Bush regime crimes to draw from, and you mention Clinton?


Hello, this is year 2006 calling!

Anonymous said...

I live in Vegas. Most of the stuff selling these days has lots of hidden discounts, so the real sales prices are falling.

uknowwhoiyam said...

Analysts: Home prices won't fall Values still going higher in Las Vegas

The Las Vegas Business Press has something to say about this:

http://tinyurl.com/h3p9v

not buying the bubble said...

Median home prices will continue to rise until the next recession.

Some markets might have some stagnation and slight drops because of over speculation, but that's about it.

Home ownership has never been higher, why are you people all being so pessimistic?