Homedebtorgamblers in Vegas getting slaughtered as Lennar moves to 30%-off-firesale on all unsold homes

Folks, there's no way existing Las Vegas homedebtorgamblers are going to be able to compete with the screwed and desperate new home builders. The builders can keep cutting and cutting and cutting and cutting, even to the point they're below cost.

And comps? Who cares about the comps, which will now be destroyed for a generation. It's firesale time, everyone out of the way!

And how about existing homedebtors, especially the ones who bought in the past couple of years? They already owe more than the home is worth. In order to sell, they'll need to slash their price. Hello foreclosure or a big-time loss.

You'd have to have a really cold night at the craps table to lose the kind of money homedebtorgamblers are losing today in Vegas. Leverage is fun on the way up but it's a killer on the way down.

Housing market analysis: Las Vegas analyst Dennis Smith said the housing market slump is deeper and longer than most expected. It's going to be a painful for a while longer before it gets better, Smiths said.

Smith said one of the big differences in the inventory of new homes and resale homes is that larger home builders will slash prices to whatever it takes to sell their unsold product.

"It's more difficult for the smaller builders to match these price incentives, so it's crucial for them to keep unsold standing inventory at a minimum," Smith said. "It is impossible for home owners to compete with the price reductions of the larger homebuilders. Owners who are leveraged can't cut their price much without losing money on their investment."

Smith said that one of his clients told him that Lennar Homes sent a letter to companies they do business with offering a 30 percent discount on their standing inventory of homes if they closed escrow by the end of May.

"If a home is priced at $500,000, you could get a $150,000 discount and purchase it for $350,000," Smith said. "The discount on a $750,000 home would be $225,000. That is a primary reason that the resale (market) will normally take longer to correct. There are more of them, and they can't or won't lower prices to match the new home discounts."

In his tracking of the median new home price, Smith reported it was $318,346 in April, which is down more than $10,000 or 3.1 percent. When excluding high rises and apartment conversions, the median price is $313,000, a decrease of more than $37,000 or 10 percent.