Half of Las Vegas Foreclosure Sales Canceled or Postponed

September 15, 2008

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The most recent trustee sale numbers for August 2008 showed that 50% of all scheduled Las Vegas foreclosure sales were either canceled or postponed before the auction.

There’s a common misperception that nearly all of the Las Vegas homes currently in the foreclosure process are owned by investors or owners with zero equity and very little incentive to keep their properties from being sold at auction.

The conventional wisdom seems to be that once a home goes into default you might as well count it as inventory because it’s going to end up back on the market eventually.

But the numbers tell a different story.

At least half of the people with homes in foreclosure are fighting to keep them, and many are having some success.

While not all of the postponed sales will escape the auction in the long run, it’s encouraging to see how many people still believe that their homes are worth keeping– even in today’s climate.

-Frothing Mark

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Inventory Drops Below 7 Months! Boo Yah!

August 22, 2008

It’s not really new news, ’cause I pointed it out on Wednesday, but it’s worth featuring in its own special Frothing Developer Instagraphic:

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How do you get this number? Take the 3,173 units sold in July and divide into the 22,091 units. The result is 6.96. That may not be much less than 7, but hell, we’re optimists.


On Average, Las Vegas Homes Now Selling For Close to the Asking Price

August 8, 2008

In a down market, there’s a truism that you offer a price under the asking price, assuming that the seller is hungry.

On the other hand, Frothing Developer has noted that a lot of the foreclosure “deals” are going for considerably more than their lowball offer prices.

We decided to take a closer look. We took all 3036 closings in July, and averaged their differences between list price and asking price. The result was interesting.

For units that sold for under $500k, the average unit sold for $2,888 less than the asking price.

For all units selling under $1m, the average unit sold for $3,855 less than the asking price.

For all units selling in July, period, the average unit sold for $5,326 less than the asking price.

1,220 of the 3036 units that closed in July closed higher than their asking price. That’s 40%!

I’d rather see all of the units selling above ask, but the fact that the average sub $500k unit sold for only $3k less than ask is a good counter to obsolete expectations that you can “low-ball” the seller in Las Vegas’ “down” market.


GHFA on the Latest Vegas Numbers

June 26, 2008

Glass Half-Full Analysis on the latest Economic Indicators

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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.


Vegas Goes One Way While The Rest Of The Country Goes Another

June 23, 2008

I’ve been frothing quite a bit about how important it is that Las Vegas sales are up month over month, compared to 2007. It’s important because most of the country is heading in the opposite direction, selling fewer houses than in 2007. Look at how different things are over in Southern California:

By ALEX VEIGA
AP Business Writer

LOS ANGELES —

Sales volumes for the region climbed about 8 percent from April but were down nearly 15 percent from May 2007.

In all, 16,917 new and preowned homes were sold in May, down from 19,874 in the same month last year, the firm said.

Only in a few other parts of the country are sales higher now than a year ago, and they’re all places where the downturn has been harshest, such as Sacramento. Here’s a report from Sacramento.


Hallelujah!

June 19, 2008

5 months after sales began to grow in Las Vegas, the local newspaper, the Las Vegas Review Journal, has finally been forced to acknowledge the good news.

In a huge article this morning, the RJ points out what In Business earlier reported:

Sales in May were up 5% over May 2007.

May data for the Las Vegas housing market suggests that recovery has begun for the resale market,” SalesTraq President Larry Murphy said.

The article goes on to spend a bunch of time bemoaning the fact that the sales of new homes are not as recovered, but that’s really a minor issue. I don’t care if we don’t sell a single new SFR house in 2008 in the valley. The goal is to work the backlog of inventory way down.

The RJ correctly reports inventory, noting that resale inventory is down 20% from last year, and they cite a 10 month inventory “just outside the six-to nine-month range analysts consider healthy”.

Is it just me, or have we heard these things before recently, here at Frothing Developer?

Of course, after managing to get a little good news out, writer Jennifer Robison can’t resist reverting to inaccurate and misleading gloom and doom. She goes on to cite Murphy claiming that “a marketwide halt to falling prices” is one of three preconditions for a recovery and then she writes:

The first two have happened, but not the third.

Except that she’s wrong. Prices were higher in May than in April, as reported in In Business Las Vegas. Not by much, I’ll admit. Prices were only higher by $800. But think about the implications! Prices are going up in Las Vegas! Think about what the market will do when mainstream media is forced to write about these implications.

Robison goes on to say

Analysts said May’s results don’t herald a permanent end to declines in local home prices and sales.

She doesn’t cite specific analysts for this particular assertion. My analytical opion is that it was APRIL’s results that heralded a permanent end to declines in local home prices.

The article then goes on to cite media’s hoary shibboleths: high oil and high foreclosure rates. Perhaps oil prices will hamper the recovery. But keep in mind that we are now below 200 days and counting to the start of hiring at City Center, and Encore is going to open well before then. And Fountainebleau is up to floor 50. And Echelon has 6 or 7 buildings under construction…