It's now been four plus years since I moved from the Las Vegas area to Orlando. Turns out that was a good choice, if only marginally. I thought I'd take a look back at how things are going in that Desert Paradise. A recent article in the Las Vegas Journal Review takes a hard look at the current trends in Real Estate in Las Vegas. It's not pretty.
Dennis Smith of Home Builders Research and Larry Murphy of SalesTraq both reported 284 new-home sales in January, the lowest monthly total on record and a fraction of the number sold during the market's boom in 2005 when nearly 40,000 new homes closed escrow.
Homebuilders are not going to start new projects unless they can make a profit, which is difficult if not next to impossible in today's business environment, Smith said. They have to compete not only with foreclosures, but with other builders selling homes for less than $100 a square foot.
Although some analysts have said the Las Vegas housing market is near the bottom, the data suggest it could sink further, Murphy said. The job picture is cloudy and there's no way to reasonably forecast the market with any degree of certainty, he said.
He thinks new-home sales could drop to 6,500 for the year, while existing-home sales pick up to 32,000. Banks are still taking back more homes than they're selling, so foreclosure inventory has yet to peak, Murphy said.
No. Not much good news. Perhaps there is some light at the end of the tunnel. At a certain point, there won't be any homes left to foreclose on or banks to hold the mortgage notes.