I just read an interesting article on HGTV's website about the housing market in 2010. There are a couple of interesting sections I'd like to discuss in this article.  Anytime you're reading a national article, it doesn't always reflect the current local market.  Much of the country is slowly rebounding, but our market has been hit hardest by the housing and economic recession.  We're not seeing the massive free fall in prices, but 2010 will most likely see a decline. 

"Coming off an estimated modern historical low of 555,000 total starts in 2009, housing production should rebound by about 25% this year to just under 700,000 units, according to NAHB projections. There is certainly a measure of good news in this forecast, but it hardly represents a return to normalcy.

Based on demographics and other factors, an annual average of 1.8 million housing starts will be needed over the next 10 years and 2010 starts are not likely to provide even half of what is needed.

Improvements in residential construction this year will be largely concentrated in single-family construction. Builders successfully reduced their inventory of new single-family houses in 2009 to levels last seen in 1971 - for a population that has grown by 80% since that time."

In Las Vegas, the new housing market has definitely seen an upsurge in activity. In fact, I sold five new homes in December and November.  January 2009 was the bottom of the new home market.  Many buyers are frustrated with the multiple offers on most bank owned properties under $200,000.  I've noticed a lot of builders have drastically reduced their prices in order to compete with the huge amount of foreclosures on the market. Take a look at the chart below. Notice the prices and volume dropping sharply and then starting to rebound towards the end of 2009.

"However, since existing home sales are based on settlements that do not capture new contracts but rather reflect sales agreements from earlier months, many of the November sales resulted from pressure on buyers to close by the end of that month to qualify for the then expiring first-time home buyer tax credit. (The tax credit has since been extended into 2010 and expanded to include repeat home buyers. See www.FederalHousingTaxCredit.com for details.)

After this burst of activity, it was not surprising to see the National Association of Realtors® (NAR) Pending Home Sales index, which is based on the acceptance of new sales agreements for existing homes, fall 16% in November. Even so, the index was 15.5% higher than the same month a year earlier, a hopeful sign that housing has turned the corner and that the extension and expansion of the tax credit is having some early, positive effect."

The first time home buyer tax credit contributed to the big surge in sales for November. I can attest to that because everyone and their brother waited until the last possible moment to look for a house.  If you are determined to buy a foreclosure or a short sale, and you plan on financing the deal, It takes about 60-90 days to close on a house.  That's being conservative.   Some deals can close a lot faster, but the big wild card right now is how quickly you can get a response from the bank.  Some offers don't get a response for three weeks, others two days.   The tax credit has been expanded and extended. Here's a video about the credit:

"Inaccurate appraisals are also hindering a faster housing recovery. These occur when an appraiser (often from outside the area being appraised) uses sales from a dissimilar neighborhood as a comparison or uses a foreclosure or short sale as a comparison without proper adjustments for differences in the condition of the homes.

Foreclosures are yet another drag on numerous housing markets. Many of the foreclosures and past-due mortgages are concentrated in the formerly hot markets - parts of California, Las Vegas, Phoenix and southern Florida - and economically distressed markets, primarily in the Great Lakes region of the upper Midwest."

This factor is going to be Las Vegas' biggest hurdle to overcome.  In the last four months, I had four transactions where there were multiple offers. My buyers bid above the listing price because the comparable sales  supported the offer.  When the appraiser came out to the property, his value of opinion was lower than the sales price.  If people are willing to pay higher than a listing price in order to get the home, appraisers should take this into consideration.   I think we have swung the pendulum too far in the other direction.    As of January 15th, 2010  our market is made up of 49% short sales, 19% foreclosures, and 32% regular sellers.   If the banks learn to streamline the short sale process in Las Vegas and around the country, we would start to see a faster recovery.  Learn more about SHORT SALES HERE.  I think society's idea of home ownership has shifted dramatically. Instead of being a big cash cow, it's now a place to live with some nice tax benefits.    If you are thinking about buying or selling a home and want more information, please feel free to call me toll free at 1-866-589-1646 or email me felipe@felipecrook.com.  If you want to start your own FREE search of properties in Las Vegas CLICK HERE.

Felipe Crook

Prudential Americana Group Realtors

7475 W. Sahara Ave Ste 100

Las Vegas, NV 89117

1-866-589-1646