It is very noteworthy that in Las Vegas for the last 12 months the number of closings increased each month on a month over month basis. Last month there were actually 4,000 closings (a big number for a town of 2M). Despite all of this buying prices have tanked over the last year and are now back to 1998 prices. Vegas is now off 57% from it's peak and the median home is selling for just $125,000... [more]
It is very noteworthy that in Las Vegas for the last 12 months the number of closings increased each month on a month over month basis. Last month there were actually 4,000 closings (a big number for a town of 2M).
Despite all of this buying prices have tanked over the last year and are now back to 1998 prices. Vegas is now off 57% from it's peak and the median home is selling for just $125,000 ($78/ft).
So don't be fooled by an uptick that may or may not occur in the number of closings in NYC. It won't mean prices are going to rise. Prices will continue to fall because school teachers can no longer qualify for loans for $800,000 condos in dBurg and 25 year old bankers can no longer qualify for $1M studios in FiDi.
Even if buyers were willing to pay these prices the banks won't lend them the money. The run up in price wasn't a function of supply/demand it was simply a function of easy to find debt from reckless lenders.
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Response by spinnaker1
about 17 years ago
Posts: 1670
Member since: Jan 2008
Interesting numbers but seems like a big stretch to apply what's happening in Vegas to NY. Lets start with the fact that there's almost 50,000 properties for sale there. I dunno, maybe its me but I don't see the connection.
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Response by falcogold1
about 17 years ago
Posts: 4159
Member since: Sep 2008
Allow me to make the connection.
LAV and NYC do not exsist in seperate vacumes. They are markets that are experiencing similar economic forces. We could debate all days the differences but, two towns with ailing cental dominant industries that experienced runaway RE pricing. Vegas went down first and is now showing signs of RE absorbtion because of the $$$. NYC will have a like experience. When $$$ depress significantly the players will come off the bench and start buying. As to the uptick as of late, This is nothing more than spring fever mixed with pent up demand. For the busy season things are not that impressive. When summer gets here then we will see what happens to the market. I have been to many open houses in the last month. They start at noon, there are 4-5 looker groupes, open house is emty by 12:15. Nobodys asking questions. Many brokers I have witnessed are begining to show ware & tear from fruitless open houses. Some are getting down right onary. Hunger pangs will do that to you.
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Response by spinnaker1
about 17 years ago
Posts: 1670
Member since: Jan 2008
In NYC new listings vs. contracts signed levels have been converging for 4 months. Number of price reductions have leveled off since a peak in Jan. Somebody is buying -and more and more by the day. Maybe you're going to the wrong open houses. If you're looking at 1.5 and above, yes its dead. But below that, there is life.
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Response by alpine292
about 17 years ago
Posts: 2771
Member since: Jun 2008
face it anysayers, the market is improving. Quit living in denial
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Response by ab_11218
about 17 years ago
Posts: 2017
Member since: May 2009
The biggest problems with Vegas and Florida was the investors who wanted to flip. In NYC, there were minimal investors. There was an article in NYTimes two years ago stating that in Vegas the investors/flippers made up 50% of the market. In NYC it was more like 3-5%.
The mortgages are harder to get, so no 25 yr old investor banker will be buying a $1M apartment. There are plenty of people who have been renting and looking. There were priced out a year ago, but not now. With interest rates at 5% and price per sq ft dropping, more people will be out there ready to buy, not just browsing/looking.
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Response by marco_m
about 17 years ago
Posts: 2481
Member since: Dec 2008
NYC will be just like vegas and san fran. Now that people are realizing that the new hires arent coming and that the same old story persists, the RE market will begin a new leg down.
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Response by Jazzman
about 17 years ago
Posts: 781
Member since: Feb 2009
Spinnaker1 -there are only 16,000 homes on the market in Vegas -they now have just 4 or 5 months of inventory - but of course more and more people continue to walk away from their homes even though they can afford their payments - once your home has lost half of it's value it's hard to continue to pay for it. For many, foreclosure and bad credit are a much better option. But it's pretty amazing, falling prices, despite 4 months of inventory and 4,000 transactions last month.
In NYC if someone paid $1.5M for a 1,000 sf new construction condo in 2008 and now it's only worth $1.1M don't you think many will walk? And when they walk it will only add more inventory (11,000 plus several thousand more of shadow inventory). It's very possible that condo is worth $750,000 in the next 6 months. Then, many more owners would consider walking. Your credit score only has so much value. For many in NYC a good credit score is not worth even $100,000. They'd be better off financially to walk from their apartment, rent for several years and then get back into the game. In a city with so many amazing rentals, walking away it's a very viable option.
When housing markets fall this much it brings into play defaults from otherwise solvent owners. These defaults can have drastic consequences for home prices.
Time will tell but for now my money is going to wait on the sidelines.
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Response by Jazzman
about 17 years ago
Posts: 781
Member since: Feb 2009
ab_11218 - I agree that a lot fewer units in NYC were bought by flippers. Also helping our home prices are co-op boards. They used what at the time seemed to many to be asinine approval requirements but now they seems sound and reasonable.
The problem is, in Vegas homes cost $125K now and there are only 16,000 available units (thought I'll admit I assume there is shadow inventory there too). That means investors from all over the place can qualify and buy 1 or 2 or 10 of these cheap units. We have 11,000 (at least) units on the market with a median price tag of $1M. Who's going to buy all of these with the new underwriting requirements from a bank? Some simple math can show you the dollar amounts of total product available in each city. Generally that wouldn't be a problem and you'd expect NYC to have more real estate for same on a total dollars for sale basis, but in today's world of Super Jumbo financing vs Fannie Mae financing it's a big deal. Only so many people can qualify for $1M loans.
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Response by alpine292
about 17 years ago
Posts: 2771
Member since: Jun 2008
"NYC will be just like vegas and san fran."
Oh please. You doomers have been posting that recycled piece of crap for nearly a year now.
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Response by marco_m
about 17 years ago
Posts: 2481
Member since: Dec 2008
"Oh please. You doomers have been posting that recycled piece of crap for nearly a year now."
and with every passing day we get closer. alot of developers are counting on new people coming into the city this summer. it didnt happen. Kids are already out of school and they arent coming into the city,
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Response by aboutready
about 17 years ago
Posts: 16354
Member since: Oct 2007
alpine, unlike the crap you've been spewing for quite some time. which way have the prices been going?
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Response by spinnaker1
about 17 years ago
Posts: 1670
Member since: Jan 2008
Jazzman.. my 50K number for Vegas came from a quick glance at Trulia. Where do you get 16k?
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Response by Jazzman
about 17 years ago
Posts: 781
Member since: Feb 2009
spinnaker1
Vegas home prices down to '98 prices - 16,000 units on the market - the trick with Vegas is that people are walking away from their homes as fast as the banks can sell their REO's.
It just doesn't make much sense for people to stay in their current homes when they can buy the same home across the street for 1/2 the price. Vegas is a mess and banks with exposure to Vegas are in trouble.
Alpine,
I am digging your tenatious optomism. You sound stable and assured...I like that. You also sound as if you just bought property...am I right? If thats true...relax, it only matters if your transation is at the bottom if you are the bottom thats being transacted. The tide raises and lowers all boats. If your not getting off the boat...who cares.
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Response by aboutready
about 17 years ago
Posts: 16354
Member since: Oct 2007
falco, no it's much worse. he's trying to sell property, in NJ.
Interesting numbers but seems like a big stretch to apply what's happening in Vegas to NY. Lets start with the fact that there's almost 50,000 properties for sale there. I dunno, maybe its me but I don't see the connection.
Allow me to make the connection.
LAV and NYC do not exsist in seperate vacumes. They are markets that are experiencing similar economic forces. We could debate all days the differences but, two towns with ailing cental dominant industries that experienced runaway RE pricing. Vegas went down first and is now showing signs of RE absorbtion because of the $$$. NYC will have a like experience. When $$$ depress significantly the players will come off the bench and start buying. As to the uptick as of late, This is nothing more than spring fever mixed with pent up demand. For the busy season things are not that impressive. When summer gets here then we will see what happens to the market. I have been to many open houses in the last month. They start at noon, there are 4-5 looker groupes, open house is emty by 12:15. Nobodys asking questions. Many brokers I have witnessed are begining to show ware & tear from fruitless open houses. Some are getting down right onary. Hunger pangs will do that to you.
In NYC new listings vs. contracts signed levels have been converging for 4 months. Number of price reductions have leveled off since a peak in Jan. Somebody is buying -and more and more by the day. Maybe you're going to the wrong open houses. If you're looking at 1.5 and above, yes its dead. But below that, there is life.
face it anysayers, the market is improving. Quit living in denial
The biggest problems with Vegas and Florida was the investors who wanted to flip. In NYC, there were minimal investors. There was an article in NYTimes two years ago stating that in Vegas the investors/flippers made up 50% of the market. In NYC it was more like 3-5%.
The mortgages are harder to get, so no 25 yr old investor banker will be buying a $1M apartment. There are plenty of people who have been renting and looking. There were priced out a year ago, but not now. With interest rates at 5% and price per sq ft dropping, more people will be out there ready to buy, not just browsing/looking.
NYC will be just like vegas and san fran. Now that people are realizing that the new hires arent coming and that the same old story persists, the RE market will begin a new leg down.
Spinnaker1 -there are only 16,000 homes on the market in Vegas -they now have just 4 or 5 months of inventory - but of course more and more people continue to walk away from their homes even though they can afford their payments - once your home has lost half of it's value it's hard to continue to pay for it. For many, foreclosure and bad credit are a much better option. But it's pretty amazing, falling prices, despite 4 months of inventory and 4,000 transactions last month.
In NYC if someone paid $1.5M for a 1,000 sf new construction condo in 2008 and now it's only worth $1.1M don't you think many will walk? And when they walk it will only add more inventory (11,000 plus several thousand more of shadow inventory). It's very possible that condo is worth $750,000 in the next 6 months. Then, many more owners would consider walking. Your credit score only has so much value. For many in NYC a good credit score is not worth even $100,000. They'd be better off financially to walk from their apartment, rent for several years and then get back into the game. In a city with so many amazing rentals, walking away it's a very viable option.
When housing markets fall this much it brings into play defaults from otherwise solvent owners. These defaults can have drastic consequences for home prices.
Time will tell but for now my money is going to wait on the sidelines.
ab_11218 - I agree that a lot fewer units in NYC were bought by flippers. Also helping our home prices are co-op boards. They used what at the time seemed to many to be asinine approval requirements but now they seems sound and reasonable.
The problem is, in Vegas homes cost $125K now and there are only 16,000 available units (thought I'll admit I assume there is shadow inventory there too). That means investors from all over the place can qualify and buy 1 or 2 or 10 of these cheap units. We have 11,000 (at least) units on the market with a median price tag of $1M. Who's going to buy all of these with the new underwriting requirements from a bank? Some simple math can show you the dollar amounts of total product available in each city. Generally that wouldn't be a problem and you'd expect NYC to have more real estate for same on a total dollars for sale basis, but in today's world of Super Jumbo financing vs Fannie Mae financing it's a big deal. Only so many people can qualify for $1M loans.
"NYC will be just like vegas and san fran."
Oh please. You doomers have been posting that recycled piece of crap for nearly a year now.
"Oh please. You doomers have been posting that recycled piece of crap for nearly a year now."
and with every passing day we get closer. alot of developers are counting on new people coming into the city this summer. it didnt happen. Kids are already out of school and they arent coming into the city,
alpine, unlike the crap you've been spewing for quite some time. which way have the prices been going?
Jazzman.. my 50K number for Vegas came from a quick glance at Trulia. Where do you get 16k?
spinnaker1
Vegas home prices down to '98 prices - 16,000 units on the market - the trick with Vegas is that people are walking away from their homes as fast as the banks can sell their REO's.
It just doesn't make much sense for people to stay in their current homes when they can buy the same home across the street for 1/2 the price. Vegas is a mess and banks with exposure to Vegas are in trouble.
http://www.lasvegassun.com/news/2009/may/22/price-existing-homes-drops-98-levels/
Alpine,
I am digging your tenatious optomism. You sound stable and assured...I like that. You also sound as if you just bought property...am I right? If thats true...relax, it only matters if your transation is at the bottom if you are the bottom thats being transacted. The tide raises and lowers all boats. If your not getting off the boat...who cares.
falco, no it's much worse. he's trying to sell property, in NJ.