Economic Conditions for the Las Vegas Valley June 2008
Housing Conditions:
- Foreclosure/Short Sale Listings (7/16/2009): Total Listings 12014; Short Sales: 5035, 42% of all listings; Bank Owned Listings: 2758, 23% of all listings. Short sale and REO listings consume 65% of total listings
- New Home Sales (May 2009, units sold): 360 Year Change -51% (excl condo conversions, highrises)
- New Home Sales (May 2009, median price): $213,990 Year Change -17.3% (excl condo conversions, highrises)
- Existing Home Sales (May 2009, units sold): 3714 Year Change +42.5%
- Existing Home Sales (May 2009, median price): $130,000 Year Change: -42.2%
- New Home Permits (May 2009): 308 Year Change -58.4%
- Rental Rate (MLS Monthly Average May 2009): $1503/month
My analysis: Distressed listings (foreclosures and short sales) are 66% of total listings. THIS IS DOWN FOR THE SECOND MONTH IN A ROW! Credit markets must be watched. Resale sold units and pendings remain impressive. Builders cannot compete with bank owned listing prices, thus sales remain lackluster. The rental market is softening due to all the investor/first time buyer combination of activity. This adds more supply and creates less demand.
New Residents/Employment Conditions:
- New Residents (June 2009): 4584, Year Change -15.8%
- Total Employment (June 2009): 862,700 Year Change -6.5%
- Unemployment
Rate (June 2009) 12.3%, Year Change +95.2%
My analysis: The tourism, gaming and convention numbers need to improve before these numbers improve. New Resident Count will go down if no new jobs are created. Unemployment rate is painful.
Tourism/Gaming Conditions:
- McCarran Airport Total Passengers (May 2009): 3,532,182 Year Change -11.5%
- Gaming Revenue (May 2009): $747,606,792, Year Change -7.7%
- Visitor Volume (May 2009): 3,527,794, Year Change -6.8%
- Convention Attendance (May 2009): 341,846, Year Change -32.9%
- Hotel/Motel Occupancy (May 2009): 84.4% Year Change -5.9%
My analysis: This sector (tourism) needs to see some serious price corrections before we see a comeback. Corporate credit is not coming back any time soon. It will be hard to get convention attendance back up without corporate credit. Glad to see regular tourists are making their way here with the imbalance of the other numbers to replace the convention attendee numbers. Gaming and convention business is big business and those numbers MUST increase. A decrease of over 30% is extremely painful to this economy and all the overbuilt convention space.
Sources: Salestraq, Home Builder's Research, Greater Las Vegas Association of Realtors, Nevada State Gaming Control Board, Nevada Department of Motor Vehicles, McCarran International Airport, Las Vegas Convention & Visitor's Authority, Nevada Department of Employment, Training and Rehabilitation. Information deemed reliable but not guaranteed. My analysis is my humble opinion.
Renee - Great analysis of the data ! If I was a reporter in the area, I would definitely come to you for data and information. And if I was a buyer or seller as well, it is great to have someone to go to who is an expert in the market ! You are that expert for sure !
Renee: I like your outlook, are the mortages starting to lag in your market. I heard there is going to a Fannie Mae no money down program coming out.
Richard
Christopher & Stephanie: Thanks so much for the kind words!
Richard: Getting a mortgage is definitely a challenge. Fannie does have their homepath low down program but I have been told that a regular FHA is better by several mortgage brokers.
FHA lending is a great option for a borrower in Las Vegas now as it leaves them the least exposure with the lowest down payment. The dangerous part about the homepath product is that an appraisal is not required. We had a borrower that was using the homepath product and he had an appraisal done on his own and it came in at $85K, the contract price was $115K and Fannie Mae would only reduce the purchase price to $100K. This puts the buyer in a position where he is already “under water” when he completes the transaction. While DPA no longer exists, there are other options for providing a buyer with low or no down payment.
If all documentation is ready, we have been closing FHA loans within 7 – 10 business days.
Thank you,
John
Renee
That's good about the resale units being strong, but I can see where new home sales in your area must be a lot of your market and they are not now. One thing is for sure; there is one great real estate that can help anyone. All they need to do is call you.
John: The plus of homepath is that the offer is looked at more favorably by the seller than FHA. Right now with the lack of inventory, appraisals are issues.
Tom: THANKS!
Renee - It seem like conditions are getting better, I hope you are able to make a few dollars during this correction.
Hi Renee,
Excellent post! My prediction is that you will make more than a few dollars during this correction. All my Las Vegas referrals are going to you!
Larry: Now that it is raining buyers and we have no inventory I am really trying to make some $$$!
Sal: Thanks so much for thinking of me as your Las Vegas connection! I appreciate that!