October 09, 2007

What happens when all the buyers go away, everyone wants to sell, and your town's REIC economy is fake? Well, just go to Vegas to find out


It is fascinating to watch the end of a Ponzi Scheme. Sad, but fascinating.

Hint to anyone trying to sell a home in Vegas - rollback prices. It's no longer 2007. Or 2006. Or 2005. Or 2004. Turn on the way-back machine, and do what you need to do to get out now.

Because it's just gonna get worse.

Oh, one more note. It's nice to see the national media doing the job that the local media is supposed to do but won't, as they're supported by REIC ad dollars, corrupted and dying.


Lady luck turns on Las Vegas' once-hot home market

LAS VEGAS (Reuters) - People trying to sell their homes in Las Vegas -- one of America's hottest job and property markets over the past decade -- have seen their luck turn dramatically worse this year.

Away from the flashing lights of the famed Strip, thousands of signs in front of single- and two-story homes illustrate a glut of available properties, many of which are now vacant. Along one stretch of six homes on Edgeworth Place in south Las Vegas, four show "for sale" signs.

After more than half a year on the market, one house is in the process of being sold after the owner dropped the price from $324,000 to $250,000, broker Doug Helen said: "They literally wanted to get rid of it."

Another owner on the street moved back to his native Singapore because he thought his children could get a better education there, his broker, Betty Chan, said.

The situation has also been tough on builders, who continue to expand into the desert around Las Vegas. Robert Toll, chairman of Toll Brothers, recently told analysts the new home market in Las Vegas rated an "F minus minus."

"What are we doing about it? We are out there with the rest of the builders in Vegas praying. There's not much you can do," he said in August. "You can't advertise your way out of that situation. You just have to wait for the market to come back."

32 comments:

foreclosureboy said...

I meet a guy 2 months ago who went 1/3rd on a new home in vegas to flip.

It went south, sitting for sale for months, no offers.

So what happens, 2 of the three guys dont wanna make ANY payments thinking it will sell before foreclosure. IT DOESNT. Then they offer to this guy to just 'take it over' free he only has to make up lost payments hoping it will sell.

HE WONT DO IT. They never made any payments and it goes straight to foreclosure.

only 1 guy was on the loan (zero down) and he was PISSED the other guys were like 'hehe, sorry dude you take it over' but even the guy with the trashed credit knew its hopeless.

So sad, now how about that chinese stock market?!?!? WOOOOT

Anonymous said...

If there is a God, it doesn't give a rat's ass about a sleezy millionaire (Toll) who is destroying natural desert. Instead of praying, lower the prices, dumb arrogant bag of hot air.

Bought for 291 and holding steady at 540? These people are insane and greedy to the nth degree!

Anonymous said...

No wonder YUM earnings were so great, they are franchising all over. Yo quiero Taco Bell.

Frank@NeverColdCall.com said...

Another owner on the street moved back to his native Singapore because he thought his children could get a better education there, his broker, Betty Chan, said.

Duh, what did he expect? It's Las Vegas!! The only place where stripper, bartender, and valet are considered good careers ... geez.

Anonymous said...

That does it. First the Florida realtors turned to prayer. Now Mr. Toll?

I am starting a REIC religious denomination. Something like Our Lady of Resurrected Equity, or some such. Or First Congregation of Eternal Appreciation.

I plan to make the yet unseen and vaporous Keith our reigning diety. I appoint myself high priest, and will be accepting applications for various church offices.

HP'ers are eligible for bishop/priest/deacon/elder positions in descending order, based on the date when they converted to bubble-believing theology. It's never too late!
Out of work mortgage brokers are eligible to be altar boys.

Saints: Shiller, Shiff, Mish, etc.

Any guesses who gets the horns and pitchfork? Hint: In my religion, hell is orange. Minor demonic minions include Mr. Crisp, anyone from New Century and others nominated ('d@mned'?)by the HP faithful.

Religious rituals are still 'under development' - we're open to suggestions.

Beware!! Convert now or be subject to real estate d@mnation for at least another 5-7 years! Drink from the bitter/sweet cup of renting.

Brian

Jordan said...

When is the right time to buy ?

When a realtor stops saying " A house is a good investment" and instead says " Buying a home is cheaper than renting" and backs that up with facts.

Pyrimid Sitter said...

I guess if you were going to gamble on homes values only going in the up direction,Vegas would seem to be the place to let it ride.And what a ride it has been,sorta like the Stratosphere Tower's roller coaster,comming loose,and crashing to the ground!

Anonymous said...

"What are we doing about it? We are out there with the rest of the builders in Vegas praying.

What a coincidence. I'm also praying - for housing armageddon. Maybe you should change the title of your blog to Housing Armageddon.

Team America said...

"moved back to his native Singapore because he thought his children could get a better education "

**********

Sad, but true, right now I think Sudan would have better education than the US. We don't need education we have bombs, F the world!

Anonymous said...

The drama pricing to 250k from 324k is what needs to be done across the entire housing market, as it will achieve what poster Jordan notes in regards to ownership vs renting, i.e. bring the PE back.

Before all this craziness the biggest barrier to entry into the housing market was scrapping together the deposit. Once we removed that barrier with mortgage exotica, we created a new barrier in the form of prices uncoupled from fundamentals. It took time to put into place because price had to exceed the mortgage exotica, but as soon as mortgage exotica was removed, its created a barrier to entry that is more like a fortress!! Thus the only way to purchase is to save and wait for those sellers who have the wisdom, wear with all and ability to lower price. Lever that equity or raid that 401k sellers, its the only way to move the house if you must!!

I applaud that seller for finally getting it and doing what needed to be done to move forward in life.

Anonymous said...

come on Keith,

I lived in Las Vegas for many years and you are painting a false picture (as usual). The city was there long before the housing boom. Like it or not tourism in LV pays well. Unedumacated bartenders, waiers, dealers and yes strippers make $70K, $80K, $90K, and $100K+. Is it "fair" that engineers with PhDs make $75K working for Nevada Power while a high school drop out makes $80K parking cars at Bellagio? I suppose not, but life ain't fair now is it?

And I'm sure one of you will chime in with some median household statistic from Las Vegas. This is the same median household statistic that says bartenders make on average $22,000 a year in Las Vegas. Sure. Whatever. Maybe in 1985 that was the case. If you want to believe those numbers, I have some great Florida swampland to show you too.

The death of LV has been foretold since the first casino went up on the Strip. Real estate is and will continue to tank. No doubt about it. The city itself will be just fine.

Tangelo Mozilo said...

That is the greatest picture I have ever seen.

One time in high school, I picked up a girl at a Taco Bell. She had just gotten stood up by her prom date. I later figured out why. Such were the adventures of youthful Tangelo.

RAYNLA said...

Pyrimid Sitter said...

I guess if you were going to gamble on homes values only going in the up direction,Vegas would seem to be the place to let it ride. And what a ride it has been, sorta like the Stratosphere Tower's roller coaster,coming loose,and crashing to the ground!

___________________________________


Ahh...Dude


There hasn't been a roller coaster on top of the Stratosphere in years! We all know housing is crashing, but it's ok to leave your bunker ocasionally.

RayNLA

HBB said...

If this graph is any indication, Las Vegas has a long a way to fall.

Las Vegas Median Home Price

Anonymous said...

Can some one tell me or point me in the right direction. What will be the BOTTOM LINE COST of the mess - when you add the subprime + HELOC + walking away from house + etc.

Marky Mark

I am betting on about $1 trillion - and the S&L mess was $150 billion in 1988 dollars. Please help with some sources!

Anonymous said...

"Unedumacated bartenders, waiers, dealers and yes strippers make $70K, $80K, $90K, and $100K+. Is it "fair" that engineers with PhDs make $75K working for Nevada Power while a high school drop out makes $80K parking cars at Bellagio? I suppose not, but life ain't fair now is it?"

You're full of crap.

"And I'm sure one of you will chime in with some median household statistic from Las Vegas. This is the same median household statistic that says bartenders make on average $22,000 a year in Las Vegas. Sure. Whatever."

So you won't accept any disputes.
you're an idiot.

vegas crash watcher said...

I can assure you that the average worker here in Vegas makes very poor wages and tips, unless they are lucky. A few in enviable situations make a lot, but most just struggle.

Anonymous said...

"moved back to his native Singapore because he thought his children could get a better education "

I mean it's pretty much one rents in an overpriced suburb (like a Greenwich CT) or goes the parochial school path in the normal town for anyone's kids to get a decent education these days.

cmseldercare.com said...

What's really wierd is if you read the Vegas newspapers (Review Journal/Sun), they both report that the overall market is stable and expect another bubble surge. What's up with that?

Joe Logic said...

The Yucca Mountain nuclear waste repository is set to open in a few years a few miles north of the city in Nye county. The Lake Mead water level drops several feet per year. How much is a house in Vegas really going to be worth in ten years? Waiting for the bottom? What for?

Let's face it. People just go to Vegas for the weekend to blow off steam, grind on some strippers, and blow a few hundred bucks playing poker. No one cares about the filth and trash that live there. If you had to put your kids in school with those mini gangbangers you'd run to Singapore too. F-- indeed.

Conversekidz said...

Why don't people understand....VEGAS (the house)ALWAYS WINS, which means you go home broke...or should I say broken home?


hahahahahaha

Anonymous said...

Joe Logic said...

The Yucca Mountain nuclear waste repository is set to open in a few years a few miles north of the city in Nye county. The Lake Mead water level drops several feet per year. How much is a house in Vegas really going to be worth in ten years? Waiting for the bottom? What for?

---------

Another idiot speaks. Las Vegas is 90 miles from Yucca. That shit will be encased in so much lead it will be 99.9999999999% safe.

Now I've heard it all. Yucca will cause LasVegas home prices to fall. What's next the fact it's hot?

Anonymous said...

you are all right.

las vegas is full of $6 an hour jobs

all those valet parkers make $6 an hour. the waiters at 5 star restaurants make $6 an hour. waiters at clubs where drinks cost $15 make $6 an hour.

keep believing what you will

renters like you need to believe everyone is as piss poor as you are...yeah yeah I know you all make a gajillion a year and live in luxury condos renting for $2 a month, no need to tell me

idiots

Anonymous said...

"You can't advertise your way out of that situation. You just have to wait for the market to come back."

Interesting quote.

I'm from Ottawa, Canada, and on the radio this morning, there was a realtor from Scottsdale, Brian Culhane, advertising Scottsdale properties to prospective Canadian buyers. His selling points were:

1) Bargains are aplenty thanks to the Canadian dollar now being at parity.

2) When asked "isn't there a housing bubble in the States right now?" the reply was the same stuff about real estate markets being local - he actually said the Scottsdale market was stable!

3) When asked "what is there to do in Scottsdale?" he mentioned all the new shopping centres going in and the high-rent shopping districts. You know, the ones being justified by no industry or real income whatsoever.

4) Then, he went on some spiel on how Canadians founded and colonized Arizona, and 30-40% of residents are Canadian (wtf?) - I guess he counts snowbirds seperately every winter.

Here's his site : www.scottsdaleparadise.com. These guys look like a bunch of $30,000 tycoons if I've ever seen them.

Anonymous said...

Us renters-

such an insult! Can you guys come up with anything better-
are you all of a sudden bitter that your cinderella story turned out bad. A case of the ponzi's?
No more cash in the atm....awwww poor home owner. Don't worry, your house will go up in value again someday. just hang on for another 10 to 12 years- it aint so bad...

Anonymous said...

kk

The_Scum said...

The highest paid dealers in Vegas make $70-80k per year now. That is the HIGHEST paid, not average by far. Wynn has deflated them quite a bit. Try googling some before saying stupid stuff. The dealers have gone union now at the Wynn and their pissant whining is all over the internet.

If you're an engineer with a PhD at Nevada Power and you only make $75k (excluding bonus even) then you just graduated or you really suck at work or both. Which is it that applies to you Anonymous 12:55?

Anonymous said...

bartenders, waiers, dealers and yes strippers make $70K, $80K, $90K, and $100K+. Is it "fair" that engineers with PhDs make $75K working for Nevada Power while a high school drop out makes $80K parking cars at Bellagio?

How many Bellagio-class casinos are there in Vegas?

Wynn
Bellagio
Mirage
Mandalay
Venetian
maybe 3 others

Even if 100 workers at each casino average $80K, you have only 800 well-paid casino workers.

That's out of over 1 million people. Then you have about two dozen average casinos and a few dozen more that are scummy, like the type local residents hang out at all day.

Anonymous said...

A dealer at the MGM Grand told me they make about $45K/yr. That's one of the better casinos. Only a lucky few get to work at the luxury casinos and make some decent money. The people working at the scummy off strip and downtown casinos look like meth-addicts and crackwhores. Even many of the strip casinos like Imperial Palace, Frontier and Riviera are pretty scummy. Vegas is kind of like Florida - mostly low paying tourism jobs. The average casino worker doesn't work at Wynn's or Venetian

Anonymous said...

Bob Toll: "You just have to wait for the market to come back."

Although Toll had some level-headed statements I am tired of hearing talk about the "market coming back". It seems to be the new catchphrase. Where do you think the market is?!?! Out shopping? Is it on vacation?

Anonymous said...


A dealer at the MGM Grand told me they make about $45K/yr. That's one of the better casinos. Only a lucky few get to work at the luxury casinos and make some decent money. The people working at the scummy off strip and downtown casinos look like meth-addicts and crackwhores. Even many of the strip casinos like Imperial Palace, Frontier and Riviera are pretty scummy. Vegas is kind of like Florida - mostly low paying tourism jobs. The average casino worker doesn't work at Wynn's or Venetian


Excellant post! This is pretty much what I have heard with respect to jobs in Vegas. Anon 12:55 is a true moron for believing anyone can make $100,000 a year parking cars.

Anonymous said...

$45K is base salary you imbeciles. Add another $30K to $40K in tips.

$100K at the Wynn is standard.

http://www.reviewjournal.com/lvrj_h
ome/2006/Aug-23-Wed-2006/news/9211902.html

And for the fool who thinks only 100 people work at casinos, try more like 5000 employees per casino.

How about you all get a clue then try again?