The Las Vegas Valley
4th Quarter edition
REAL ESTATE QUARTERLY Existing Home Sales Remain Consistent Since April, existing home sales have remained above 2,000 closings per month. This is higher than the same months of last year, which we largely see as a response to the continued drop in prices for many of the Valley’s homes. Both investors and people looking to owner occupy a home have found a variety of options that suit their requirements. This is one of the unsung positives of the current market environment. Single Family December
M-M Change
November
Y-O-Y Change
Listings Available Average price Median Price
17,725 $342,671 $197,945
0.1% -2.3% -1.0%
17,712 $350,776 $200,000
-14.8% -25.7% -34.6%
Units Sold Units Sold Average Price Median Price Avg. Days on Market
2,499 $204,282 $175,000
14.4% -5.3% -5.9%
60
1.4%
2,184 $215,756 $186,000 59
156.8% -35.8% -33.3% -27.3%
Condo/TH December
M-M Change
November
Y-O-Y Change
Listings Available Average price Median Price
4,645 $253,191 $125,000
0.2% -5.2% -7.3%
4,637 $267,217 $134,900
-14.3% -18.5% -24.0%
Units Sold Units Sold Average Price Median Price Days on Market
456 $113,820 $90,000
162.1% 9.3% -0.8%
63
-5.6%
174 $104,116 $90,750 67
150.5% -52.3% -50.7% -32.3%
Currently, the addition of foreclosed homes spilling onto the market has served to keep inventory elevated despite strong sales, yet at this current rate of sales we have basically entered a flat level of months of inventory. We measure 7.1 months of supply for single family and 10.2 months of supply for condominiums. This is far below last year’s levels. Another reliable summary indicator view is days on market. Year-over-year, we have seen substantive drops in days on market, which is closely related to pricing accurately and understanding where the market trends are going, something we continue to emphasize.
ALWAYS INFORMED 1
Key Resale Data
1
The Mortgage Market
2
Nevada Migration
2
Real Estate is Moving
2
Affordability Trend
3
Graphical Recap
Housing Total Available Housing Inventory (existing)
Q4' 08 21,045
23,862
9,166
4,801
Closed (existing) Median Price (soldexisting)
$170,500
$252,000
New Home Permits
730
Apartment Rental Rate
$874
$876
9.8
7.7
3-Month Libor
1.47
4.73
30-Year Fixed
5.32
5.91
Prime
3.25
7.25
6-Month CD
2.24
4.35
917,400
932,900
9.1
5.6
Apartment Vacancy Rate (%)
The Mortgage Market
Q4' 07
2,604
Rates (%)
Fourth Quarter Recap 2008 The Fourth Quarter of 2008 was an anomaly in mortgage originations; while rates continued to tick lower consistently throughout the quarter, purchase originations stayed relatively static. There was a slight increase in refinance applications as the national average interest rate in November was 6.20% and closing the year at a national average of 5.29% (30 year conventional mortgage with 0.7% discount point(s) in December - the lowest since June of 2003 (the lowest rate on record since Freddie Mac started tracking this data in 1971).
Employment Total Employment Unemployment Rate (%)
th
The silver lining in the 4 quarter of 2008 was that with the increase of bank owned properties brought to the national consciousness that homes were truly affordable again for the first time in years. Typically the 4th quarter of ANY year is a slow time as the holidays mute the urge to go out and search for a new home. The refinance trend will continue to lead mortgage originations as rates continue to hover around historic lows.
Indicators Source: UNLV CBER, Bloomberg, Mlxchange, Salestraq, Coldwell Banker Premier.
Dave Riechert PHH Mortgage www.lasvegashomes.com Page 1
The Las Vegas Valley
4th Quarter edition
REAL ESTATE QUARTERLY Migration Continues to Nevada in Recent Study A new study for 2008 by the mover United Van Lines demonstrated “high-inbound” movement to Nevada for the 23rd straight year. Along with drivers license surrenders and utility hookups, this is one indicator of migration to Nevada. United Van Lines collects this data in the course of its business and found that 59.2 percent of the Nevada related moves were inbound moves. This makes intuitive sense in light of what's happening in other states, along with Nevada’s more favorable tax environment and amenities. Nevada receives a lot of newcomers from California, which the study found to have slightly more outbound moves than inbound moves. Several Northwestern and Midwestern states experienced high-outbound traffic while several southeastern, western and Nevada in the Southwest, were high-inbound states. 32 states were considered balanced. The full study can be found at United Van Lines website at www.unitedvanlines.com.
Source: United Van Lines.
Selling Real Estate Every Day 2008 held some surprisingly good opportunities for both families looking to finally settle in an affordable home and for investors looking for deals not seen in years. Others found that they could buy much more house than they originally thought. Adjacent is a map that gives a visual of the amount of homes sold by Coldwell Banker Premier Realty agents in just one year.
Apr- 0 6 May-0 6 Jun-0 6 Jul-06 Aug-0 6 S ep-0 6 Oct-0 6 Nov -0 6 De c-0 6 Ja n-0 7 Feb-0 7 Mar-0 7 Apr- 0 7 May-0 7 Jun-0 7 Jul-07 Aug-0 7 S ep-0 7 Oct-0 7 Nov -0 7 De c-0 7 Ja n-0 8 Feb-0 8 Mar-0 8 Apr- 0 8 May-0 8 Jun-0 8 Jul-08 Aug-0 8 S ep-0 8 Oct-0 8 Nov -0 8 De c-0 8
Housing Affordability (Jan-07=100)
There are several reasons why real estate kept moving in 2008 despite the headlines. One of the main concerns over the years has been the lack of affordability in Las Vegas. In 2005 especially, there was call for something to be done about obtaining more affordable housing in the Valley. Before anything could be done, the housing bubble dissipated and affordability has ascended northward as the chart below depicts. We formulated this Housing Affordability gauge to show the 200 degree in which the 180 median income family Source: Coldwell Banker Premier Realty. 160 can afford the median priced home. With historically low mortgage rates remaining available, combined with the 140 market giving back a majority of the price increases 120 during the bubble, we see affordability increasing 100 substantially. It’s somewhat odd to think that a buyer 80 may be able to purchase a home with a monthly 60 payment less than rent on an equivalently sized 40 apartment, but this is occurring in several areas. We also find that while foreclosures were high in 2008, 20 many buyers were ready to purchase both distressed 0 properties or homes that were priced closer to the market. Further, demographic analysis suggests that organic demand for housing will continue at an above Source: Bankrate.com, Mlxchange, Coldwell Banker Premier Realty. average rate for a metropolitan area. We see several indicators of what we see as fundamental home values returning to many product types and neighborhoods. However, while supply abounds, doing significant homework is necessary to determine fair market values. This is especially true given the fragmented nature of real estate markets which tend to have a lot of variability by both home types and by area. As we have entered 2009, it’s exciting to think about the opportunities that are ahead. Page 2
The Las Vegas Valley
4th Quarter editionÂ
REAL ESTATE QUARTERLY Single Family Sales by Price Range - Q4, 2008
Single Family New Listings by Price Range - Q4, 2008
5M +
1
5M +
3M - 4,999,999
-
3M - 4,999,999
1M - 2,999,999
39
500,000 - 999,999
39
1M - 2,999,999 138
400,000 - 499,999
253
500,000 - 999,999 291 653
250,000 - 299,999
758
200,000 - 249,999
1,346
180,000 - 199,999
861
140,000 - 159,999
1,230 2,081 1,353
160,000 - 179,999
831
1,515
140,000 - 159,999
723
1,563
120,000 - 139,999
400
1,519
100,000 - 119,999
Under 99,999
686
200
1,224
250,000 - 299,999
180,000 - 199,999
160,000 - 179,999
120,000 - 139,999
502
300,000 - 399,999
200,000 - 249,999
676
100,000 - 119,999
684
400,000 - 499,999
300,000 - 399,999
0
16
400
600
1,035
Under 99,999
800
1000
1200
1400
1,768
0
Single Family Prices by Home Type - Q4, 2008
200
400
600
800
1000
1200 1400 1600 1800 2000 2200
Single Family Sold by Time on Market - Q4, 2008
121 +
$365,259
1,285
4+ Bdrm $300,000
91 - 120
626
$173,206
3 Bdrm
61 - 90
$158,000
993
31 - 60
1,647
$130,249
2 Bdrm $109,000
1 - 30 $-
$50,000
$100,000
$150,000
$200,000
Median Price
$250,000
$300,000
$350,000
$400,000
3,833
-
500
1,000
1,500
2,000
2,500
3,000
3,500
Average Price
Type of Financials of Units Sold - Q4, 2008 AUCTION
35
CNOFLSE
1
PRIVATE
2
OWC
9
LSEOPT
2
EXCH
4
CTL
2
AITD
1
VA
500
FHA
2,736
CONV
2,544
CASH
1,531
-
Source: Mlxchange
250
500
750
1,000 1,250 1,500 1,750 2,000 2,250 2,500 2,750 3,000
Page 3
4,000
The Las Vegas Valley
4th Quarter editionÂ
REAL ESTATE QUARTERLY Condominium Sales by Price Range - Q4, 2008
5M +
Condominium New Listings by Price Range - Q4, 2008
0
5M +
4
3M - 4,999,999
8
0
1M - 2,999,999
3 10
400,000 - 499,999
1M - 2,999,999
7
56
500,000 - 999,999
131
22
250,000 - 299,999
400,000 - 499,999
18 38
180,000 - 199,999
64
300,000 - 399,999
111
39
250,000 - 299,999
62
140,000 - 159,999
96
200,000 - 249,999
81 151
170
180,000 - 199,999
100,000 - 119,999
125
166
160,000 - 179,999
125 100
80,000 - 89,999
109
60,000 - 69,999
116
25
50
75
290
100,000 - 119,999
108
Under 49,999
234
120,000 - 139,999
107
0
164
140,000 - 159,999
100
392
Under 90,000 99,999 - 99,999
125
150
175
200
1,539
0
400
600
800
1000
1200
1400
1600
1800
Condominium Sold by Time on Market - Q4, 2008
Condominium Prices by Home Type - Q4, 2008
234
121 +
$127,759
3 Bdrm
200
$102,000
91 - 120
123
$109,408
160
61 - 90
2 Bdrm $89,250
269
31 - 60 $118,386
1 Bdrm
$-
$69,950
$25,000
$50,000
$75,000
Median Price
476
1 - 30
$100,000
$125,000
$150,000
-
50
100
150
200
800
900
1,000
250
300
350
400
450
Average Price
Type of Financials of Units Sold - Q4, 2008 CNOFSLE
2
AUCTION
15
PRIVATE
1
OWC
-
LSEOPT
1
EXCH
-
CTL
2
AITD
-
VA
28
FHA
205
CONV
361
CASH
637
-
Source: Mlxchange
100
200
300
400
500
600
700
Page 4
500