In City of Homes That Sit Empty, more homes are being built

[Liberal_in_LA]

In City of Homes That Sit Empty, Building Booms

LAS VEGAS — In a plastic tent under a glorious desert sky, Richard Lee preached the gospel of the second chance.

The chance to make money on the next housing boom “is like it’s never been,” Mr. Lee, a real estate promoter, assured a crowd of agents, investors and bankers. “We’re going to come back like you’ve never seen us before.”

Home prices in Las Vegas are down by 60 percent from 2006 in one of the steepest descents in modern times. There are 9,517 spanking new houses sitting empty. An additional 5,600 homes were repossessed by lenders in the first three months of this year and could soon be for sale.

Yet builders here are putting up 1,100 homes, and they are frantically buying lots for even more.

Las Vegas is trying to recover by building what it does not need. It is an unlikely pattern being repeated in many of the areas where the housing crash was most severe.

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Some of the demand is coming from families that are getting shut out of the bidding for foreclosures by syndicates that pay in cash, and some is from investors who are back on the prowl.

Land and labor costs have fallen significantly, so the newest homes are competitively priced. Some of the boom-era homes, meanwhile, are in developments that feel like ghost towns. And many Americans will always believe the latest model of something is their only option, an attitude builders are doing their utmost to reinforce.

http://www.nytimes.com/2010/05/16/business/16builder.html?hp

Simply put, the country already has too many houses, the legacy of wide-scale overbuilding during the boom. The Census Bureau says there are two million vacant homes for sale, about double the historical level. Fewer new households, moreover, are being formed as families double up for economic reasons, putting a further brake on demand.

[CaliforniaPeggy]

1. Not only that...

But there's this question that nobody is answering, much less asking; what about sufficient water?

They are freaking nuts.

[Liberal_in_LA]

3. I know!!!!!!!!!!!!!!!! I saw something about how the aqufiers are getting sucked dry to

water golf courses and fill those stupid fountains and pools at the casinos. Ridiculous!

[Rex]

2. They will be building these homes right off a cliff

and still telling their 'agents' it is no big deal, just grow wings.

[Systematic Chaos]

4. This city is an absolute fucking disgrace.

America's own Dubai.

Fucking hate it but can't afford to move. :(

[BeyondGeography]

5. So 15K or so fairly new homes stay empty because buyers want "totally new"

:silly:

[Liberal_in_LA]

6. Blame cable shows for that! - Gotta have the marble countertops and wood floors

and kitchen with islands. Noone wants to fix up a house from the 50s, 60s, 70s or even 80s anymore

[TwilightGardener]

7. While it makes no sense to keep building new developments at this point, I will say

three things about the current market: 1--it's not that easy to buy a foreclosure or short sale if you are not experienced at real estate or an investor with cash or financing lined up. My husband's coworker tried for many months to close on a foreclosure he was attempting to buy, went through a lot of crap compared to a regular homeowner sale. 2--the existing houses that aren't distress sales, being sold by homeowners, are often too high-priced, because they paid X amount of dollars during the bubble and are unrealistic now in terms of their home's value. It's understandable to want to get back out what you paid for it, but in many cases it ain't gonna happen. I have watched houses I was interested in buying sit for 6+ months at the same high price. Jeezus, take a hint--it's not 2006. 3--builder-arranged financing and relatively cheap pricing makes building new almost as easy as buying pre-existing.

I do know people who would never buy and update a pre-existing house, because they're THAT full of themselves, and/or they want a totally maintenance-free house for a while. I don't think that's the norm, though--I think it's price, and the fact that the "buyer's market" isn't all that great when banks don't want to fucking loan ANYBODY any money right now, and because the appraisal system is all kinds of fucked up, for pre-existing neighborhoods with lots of distress sales.

[Liberal_in_LA]

8. short sales are almost impossible to complete, only a small % go through

I managed to buy a foreclosure owned by a bank because me realtor is experienced with that type of transaction. I could see how many would give up and go for a new development.