www.lasvegasmtg.com Report: Las Vegas housing will struggle in 2010 was recently discussed at the National Association of Home Builders which was part of the International Builders Show held in Las Vegas, Nevada this Tuesday.
It was predicted that the current housing market will effect the new home production and will see lower levels of new constructed homes at 70% below normal levels and will not see a normalcy until 2011.
David Crowe the NAHB Chief Economist stated " It is the simplest way to say that Las Vegas will continue to suffer at least until 2010. David Crowe believes that inventory remains at high levels and shows no sign of relief. David Crowe states that demand can not remove the supply of bank owned homes that will continue to come to the market through 2011.
David Crowe believes that the country has stopped the bleeding and the house price declines will level off.
David Berson the Chief Economist for the PMI Group that all indications that house prices will continue to decline but at less steeply slide in price. While housing prices in Las Vegas have declined 50% since the high of 2006 it is going to take at least three years before prices start to rebound.
It was discussed that the investors that entered the market in Las Vegas helped take some of the inventory off the market and this was positive. The Economist stated that the foreclosures that are now taking place are not from the sub prime fallout but from loss of jobs and from "strategic defaults".
There was more that was discussed at this meeting but I wanted to address some points that I disagree with.
I disagree that withholding inventory has helped stabilize prices and that demand is not strong enough to remove inventory. If this was the case then why did we sell the second highest numbers of home sales last year? I do not believe that large number of homes bought by investors help communities become stable. There is no home ownership pride that helps rebuild neighborhoods from investors.
With only 2,000 bank owned properties being listed, thousands more never come to the market or only come in dribbles while thousands of home buyers are forced to bid against each others on the small inventories that are available. Banks hoping to get higher prices with this process, knowing that the appraisals will not come in on the asking price so they want the buyer to agree to pay the difference before accepting the offer. Will recovery be in 2011? Only time will tell.