A new report shows the Las Vegas Valley has a 99.8 percent chance of seeing lower home prices through 2010.
PMI Mortgage Insurance Co., the second largest U.S. mortgage insurer, released its risk index for 381 metropolitan areas across the country. Las Vegas joined several cities in Florida and California in having greater than a 99 percent chance of seeing lower prices by the fourth quarter of 2010.
"Combined with upward movements in excess housing supply in many parts of the country, these deteriorating conditions are increasing the risk of house price declines in the next two years," the report said. "Florida, California, Arizona and Nevada continue to lead the nation in risk and significantly rising level of delinquency rates."
In its third quarter report, PMI reported that Las Vegas had a 99.4 percent chance of seeing lower home prices in two years, but the number was revised to 99.8 percent in the fourth quarter of 2008.
The index factors in previous home price appreciation/depreciation, affordability and a city's unemployment rate.
"Even with the modest home sales gains that we project for the second half of 2009, we still expect that national home prices will fall further because of the large number of homes for sale," the PMI report said. "The worst national price drops are probably behind us, however, and by 2010 national prices begin to stabilize."
The Greater Las Vegas Association of Realtors said the median price of a home in February was $155,603 -- off 37 percent from February 2008 and down more than 50 percent from the peak in 2006.
COMMENTS
I am a poker player and sometimes I get those 2% outers to win.
I'm going to buy now, because there is a .02% chance that the prices will go up. Anyone with me?
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I am buying now and the competition was FIERCE!!!! It took me months of price wars to buy a home here. If the prices go down I cannot see it being by much and the North and Northwest parts of the valley are the areas which will drag prices down IMO...
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Lower prices will not necessarily mean those trying to get back into the area...will. Those with cash are those buying now.The tighter requirements on getting a mortgage today will still keep many many people out.Home building is still going on at a very restricted rate (as it should). So many new homes are sitting there collecting dust. Hope LV has learned a hard lesson and change the way they do business. Gone at the days of building a 1,000 home track and then standing on the corner for buyers.
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I didn't buy a house cash, nor is my credit perfect and I got a loan no problem at 5%...
I agree on the hoping Vegas learned from this. But can we really blame builders when they could throw a 2000sq/ft house on a 2500sq/ft lot and sell it for $300K? Supply and demand was a major factor here, and California and elsewhere was the real culprit, they flooded this city with investment $$ for homes nobody was living in. We should really thank them now for allowing the prices to be what they are here. I can almost guarantee that the pricing on homes won't ever return once it recovers.I just insured my home and if it was destroyed it would cost more to build it again than what i bought the home, land, pool, b-ball court, and putting green for.
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i'm a realtor and i'm worried that people are buying up homes to turn them into rental properties and figure they can sell them for a 20% return next year, and i don't see the jobs coming in to refill all those homes.
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excellent point. I was at a presentation yesterday where it was noted that the population in Las Vegas has DECREASED in the past 12 months, presumably due to the lack of jobs in the area.
I am tempted to buy but am going to rent for at least another year since rental prices are falling steadily and I don't see home prices going up in the foreseeable future.
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A month ago a buddy called to inform me that if he'd had the money he'd be buying homes right now. I laughed, reminding him of the perfect timing he possessed on the previous two homes he purchased, foreclosing on one and upside down at half the note value on the other.
Those claiming to be experts buying now remind me of my expert buddy.
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Anyone buying a home today as an investment to flip next year or the year after is looking for trouble. Only buy a home if you are planning to stay here for at least 5 years, otherwise you will likely lose several thousand dollars.
The decline in home prices as and will continue to slow, but as the article states it is not at its bottom. Remember there is another round of forclosures coming thanks to those interest only payments kicking into interest plus balance payments.
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House flipping looked so easy on HGTV. I guess the cab driver that was in the process of flipping ten two years ago might be in trouble.
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There are some great buys right now. They may drop a little more, but within a few years 2009 prices will look pretty good. I just bought a rental investment and with a strong cash flow, I do not worry about appreciation anytime soon.
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I can't believe all the people trying to get rich off housing, still.... How soon fools forget, a home is a place to live.
Look how many people thought they were going to get rich quick investing in housing. A few got rich, the rest got stuck with multiple mortgages or an enormously overpriced card board box.
Once again greed rules the roost.
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