This editorial opinion by Cyril Moulle-Berteaux, "The Housing Crisis is Over" appeared in the Wall Street Journal on May 6, 2008 and has been getting a lot of attention in the blogosphere.
The author quotes historical real estate cycles and claims the national housing market is approaching the bottom now based on a variety of facts and economic trends:
- Home sales peaked in July 2005
- New Home sales are down 63% from peak levels
- Housing starts have fallen more than 50%
- Affordability - prices have declined while, generally, incomes have grown
Brett Arends asserts in his article "Is Housing Slump at a Bottom" that we may be at the bottom of the housing market because housing starts dropped below the One Million mark in March. "Every time that has happened in the last 50 years, it proved to be the bottom of a recession."
Indications in Las Vegas are that prices may continue to fall further, yet NOW is definitely a great time to buy - here's why:
- Over 60% of sales are REO or Short Sales - there are tremendous bargains out there right now!
- From 4/1/08 to 4/30/08, Las Vegas had 1927 closed resale single family, condos & townhome: Download April2008REO-Stats.pdf
- REO - 1224 (63.5%)
- Short Sales - 144 (7.5%)
- Traditional resales were 19% of the market for the month
- Total number of contracts written is increasing dramatically. GLVAR statistics show that 770 listings went into Pending or Contingent status in a one week period between April 21-28. Notice the dramatic trend upward on written contracts since January 2008:
- Banks are pricing their REO listings to sell - sometimes below the market - thus generating activity and multiple offers.
- Motivated sellers are finally shifting their list prices into the "Showing Zone". For more on this trend, check out Forrest Barbee's Las Vegas Real Estate Market 2008 post.
- Interest rates remain at historically low rates. Even with the tightening of the mortgage market, there are a variety of loan programs to choose from. FHA loans are now a realistic option in Las Vegas due to the new loan limit of $400,000.
Download las_vegas_market_condition_report_may_2008.pdf (Market Condition Report from Equity Title):
- The report indicates a shift and positive change in closing numbers which, if the pattern continues, will surpass 2007 numbers in about 60 days.
- Percent Selling and Absorption Rate demonstrated substantial increases after a series of declines and pendings indicate that trend may continue.
The bottom line ... the market continues to adjust and there are great opportunities in the market now... what are you doing to adjust and take advantage of this market?