Futures Still Going Up. Chortle

June 30, 2008

Long-time readers (heh) will recall that Frothing Developer has put its money where its mouth is and bet big on Las Vegas in the housing futures market.

I’m pleased to report that the bid on November 2012 contracts has risen to 132 from the 130 where I was able to buy my last contracts and – get this- the ask is up to 155. Lord knows if anyone at this point is going to be dumb enough to sell contracts at these low prices. I’m going to keep buying them, though. You can follow the action at http://housingrdc.cme.com/


Economist: "Supply creates its own demand"

June 30, 2008

The Economist looks at the gambling industry in Las Vegas and generally concludes that while profitability will be strained by recessionary factors and by increased supply, the gaming industry is pretty good at stimulating demand:

The casino Titans are adept at dealing with shifts in demand, however. Led by Harrah’s, whose boss, Gary Loveman, is a former economics professor, they have become experts in collecting information about their customers and using it to tailor promotions. Gambling firms also have a knack for carving out new markets. And they are ramping up marketing efforts abroad. The attractions of a weak dollar are clear, even to the unluckiest of European gamblers. “It’s great. Every dollar I lose is only 50 pence,” says Neil Gregory, a British property developer struggling to contain his deficit on the Luxor’s roulette tables. Transatlantic business has also been boosted by boxing extravaganzas featuring European fighters.

Optimists reckon a weak economy and currency could boost domestic demand, too. If past downturns are a guide, a substantial number of Americans will head to Vegas rather than taking expensive holidays abroad, says David Schwartz of the Centre for Gaming Research. And the “whales”, as high-rollers are known, really are immune to economic fluctuations. Some high-end casinos are doing even better this year than last, says Brian Gordon of Applied Analysis.

This leaves some convinced that Vegas will once again defy the sceptics, just as it confounded those who argued that it would be hurt by competition from Californian gambling dens, or that the wave of mega-hotel openings in the 1990s would create crippling overcapacity. History suggests that, in America’s gambling capital at least, supply creates its own demand.

We’re Still Not In a Recession, Day 455

June 27, 2008

The government upped its estimate of growth for the first quarter by 10%. There’s no question that economic activity is weak, but I’ll take 1% growth over recession anyday.

Full Story Here

Internet Gaming Ban Upheld

June 27, 2008

It’s good for casinos when Internet gambling is restrained.

Full story here.

Las Vegas New Home Sales Up Over 2006 and 2007

June 26, 2008

Week to Week New Home Sales 2008 to \'06 and \'07

New home sales spiked dramatically and were up week-over-week against both 2007 and 2006 in the most recent week, as reported by the Ryness Report, which compiles sales statistics from new home developments across the Las Vegas Valley.

This is the first since 2005 that weekly sales have topped the prior two years, and it is only the second time since 2005 that new home sales numbers topped the previous year’s sales.

Weekly traffic to sale ratios, a strong indicator of buyer demand, went from 30:1 in 2007 down to a much healthier 16:1 in the past week. While one week doesn’t make a trend, taken in context of the overall upward trend for 2008 this is a very positive development.

-Frothing Mark

Chart courtesy of The Ryness Company

GHFA on the Latest Vegas Numbers

June 26, 2008

Glass Half-Full Analysis on the latest Economic Indicators


New Resident Count: Down to 4,612, but it’s still pretty powerful to have nearly 5000 new residents showing up each month.

Total employment: Down less than 5000 from a year ago. In a city with one million jobs, the fact that despite all of the downturn in construction, lending, title, and mortgage, employment is only down 5000 jobs is quite a testament to the underlying growth power of the Las Vegas Region.

New home permits: Down 57%. Remember: this is a good thing. Fewer home permits mean we work through the inventory overhang faster.

Existing Home Sales: Up slightly from last year. There is hardly any other place in the country that sold more homes in May 2008 than they sold in May 2007. Vegas pulled it off because we’re going through a recovery.

National Inventory of Existing Home Drops

June 26, 2008

Good results for May, well-outperforming “analyst expectations”.

The inventory of existing homes dropped, nationwide from 11.2 months of inventory to 10.8 months of inventory from April to May, a 3.3% reduction.

On absolute terms, the national inventory dropped from 4,553,000 to 4,490,000, a reduction of 63,000 homes.

Existing home sales rotes 2% to a 5m per year pace.

Full results here.