no ... not the weather<g>, but the housing market seems to be making a correction.

There was an article in Yahoo news yesterday saying there were almost 20,000 homes and condos for sale in May 2006, compared to 10,555 in May 2005 and 4,553 in May 2004 ... and prices have been dropping. D.R. Horton is willing to knock $20k off the homes in their subdivisions, and K&B has lowered prices $8-34k at some of their developments. The house I've been following out in Sun City Aliante has dropped .. that model was $158k when they were opening, got up to $327k last year but is now listed for $286k.

The complete article can be found at http://news.yahoo.com/s/csm/20060605/ts_csm/avegas_1

Here's a quote for the Senator ... one housing blog mentioned that "of the 18,467 listings in April, about 17,000 were active listings, mean the balance were contingent or pending sales" .. then went on to say this is a terrible ratio and 50% pending is considered normal. Any comments, Senator?

I think the houseing market is cooling off everywhere, as mortage rates climb. In my local area, I see more houses on the market for longer times, that has to translate to a slower, fuller market.

50% pending sure ain't normal for Columbus Ohio. It probably WAS normal for Vegas 2 years ago.

We have a glut of inventory just like most other areas. I'll look at a certain area dna see how many homes sold there in the last year. In many cases the current inventory is as much as 1 1/2 times that number. In other words, there's a year and a half of inventory. Not good for home sellers.

Almost anytime you see the appreciation rates Vegas experienced a couple years ago, you're looking at a false appreciation and can expect a market adjustment down the orad.

The biggest problem you see is people who refinanced to take equite out of their home when the prices were sky high. Once the market corrects, these people are upside-down, owing more than their house is worth.

BTW, how long ago was that place was priced at $158,000? And, WHY DIDN'T YOU BUY IT? lol

jm

I like the Senator's assessment. I think "cool off" is here with a moderate decrease in price. There have been 1700 repos in my county so far this year - any comments along these lines, anyone??

Expect more, Wendell!

LOL, that $158k was 2-3 years ago, when Aliante was first starting up ... and I didn't buy then because I was then (and now) putzing about whether or not I wanted to live in Las Vegas. I never even thought about it as an investment.

I also expect more repos in the future; I've seen some articles saying about 40% of current mortgages are the interest-only type; I think there's going to be a very nasty wake-up call for these folks about 5-7 years down the road.

Daisy,

You're absolutely right about the interest only loans. They're typically advertised as a way to afford more home. In realty, they're a way to buy more home than you can afford!

There's a lot of 'creative financing' programs out there. They're right for about 2% of the home buyers. For the rest, they're just a quick way to get in trouble.