Summerlin Real Estate, Las Vegas Real Estate, Henderson Homes For Sale

These comments and opinions are designed to accompany the Market Condition Report attached to this document.

SELLER CONTRIBUTION: The measure returns the propensity of the buyer to request—and the seller to provide—buyer points to expedite transaction closing. The propensity for sellers to provide buyer support remained rather constant from December to January. The average contribution declined for SFR and increased slightly for CONDO.

As a generalization, and on the average, a good estimate of the seller’s expected contribution is between 2.8 to 3.5% of the transaction value.

The above outcome of the change in the level of demand for years 2006-2007 is an estimate based on incomplete closing information for the year 2007. Final closing estimates for 2007 will be provided in the February 2008 report. However, the reader should not expect a meaningful deviation from the percentage estimate of -39.4% above.

Based on the changes from the previous month, the market has halted in its movement to the buyer side.
Both PERCENT SELLING (market efficiency) and ABSORB RATE (market speed) have reversed direction and have moved in a positive direction. This is a significant indicator the market has reached the bottom in terms of demand. Supply, although declining in the short run, may begin to rise as the spring market is entered.

To gain insight into the future readers should review the past. The Market Overview above provides a review of the key measures for January 2004 to compare to the MCR current key measures. Also note that current median closing price (SFR) is about equal to the median closing price of Oct/Nov 2004.

The reader should expect a continuation of the negative price trend with SFR moving slowly toward 269K (closing). Expect CONDO to demonstrate more price stability and resiliency although fluctuations will occur on a month to month basis. Declines in the price schedule will become less apparent as the declining schedule slows. In January of 2007 (last year at this time), SFR closing price was $313K while CONDO closing price was $200K. An imponderable at this time in terms of prices is how long the market will linger at the current low level in terms of demand.

The strongest sub-market continues to be South SFR. The weakest is Central/Boulder City SFR/CONDO. As a general rule, the relative strength of markets can be deduced by the 60 DAY ABSORBS RATE. All markets in the Las Vegas area are now exceptionally weak in terms of demand. However, as pointed out earlier, the negative trend in terms of demand may have reached bottom and reversed. The speed of reversal and the time the market may linger at this low level is unclear at this time.

MCR TIP (ADVANCED)

Market price does not change of its own accord. In order for price to change, a change must occur in
supply (listed), demand (sales per month), or both.

In the same time period for 2007 (last year) the ratio of supply (listed) to demand (sales per month) was
11.3 to 1 or, in other words, 11.3 properties listed for each property sold.

In the current time period the ratio is 22.2 to 1. During the time movement of one year, prices declined
about 13% while the ratio of supply to demand increased by about 50%.

WORDS OF WISDOM

Advice is the only commodity on the market where the supply always exceeds the demand. (Unknown)