Pulte Homes Inc. (one of my favorite builders) is proving that there is a silver lining in the current economy. There is a popular theory among business experts that in order to survive a bad economy, you have to not only maintain your current level of marketing, but even expand and gain more market share. Pulte Homes is doing just that and are buying Centex Corp. The buy out will be in the form of a $1.3 billion stock deal, which will make the company the largest U.S. home builder, knocking D.R. Horton out of the top spot.

New home sales were actually up in February (numbers are not in for March yet) but new home builders are seeing increased competition from foreclosure and prices are still down.

The acquisition of Centex hasn’t slowed Pulte down either. Earlier this month, they debut its newest community, Arden Park located off of Durango Drive and Edna in the heart of Southwest Las Vegas.

Arden Park will offer brand-new affordable homes from 1,677 to 2,100 square feet, featuring two and three bedrooms, spacious master suites, great rooms, lofts and two-car garages, starting from the $190s. One of the reasons I like Pulte Homes is their commitment to building super energy efficient homes without sacrificing your standard of living. Arden Park homes will follow that tradition and are built with the Environments for Living Diamond program, making them more energy-efficient than ENERGY STAR standards require. Homes will  feature 15 SEER-rated air conditioning systems, tankless water heaters and blown-in cellulose insulation to help keep utility costs down.

It seems the media is trying a new message instead of their usual doom and gloom—hope. Today Dr. Phil had money guru Jim Kramer on his show. He was helping advise a couple going through a very tough spot and gave out some advice to the audience as well. His take on the real estate market—buy in the next 6 months.

He isn’t the only one that noticed the absolute steals available in real estate. The Las Vegas Review Journal published an article on a report by Massachusetts forecasting company IHS Global Insight and Ohio bank holder National City Corp. The report suggested the market’s worse price declines have passed…something that anyone who has been following the market could have told you. Home sales have surpassed the prior year and inventory has not been growing by leaps and bounds like it has in the prior year.

An interesting tidbit in the report were their findings on Las Vegas home values. Values have been in a sustained slide and six month ago home prices here were 3.1 percent below the values historic fundamentals warrant. (The historic normal values are calculated by using median prices from 2000, population density, interest rates and household income). Granted that’s not enough of a shortfall to qualify as undervalued, at least at that time. However, when you look at today’s numbers that figure is more than 14 percent according to the report and Las Vegas ranks at number 287 out of the 330 markets IHS Global Insight and National City track. While not at the very bottom of the barrel, we can certainly see if from where we’re at.  So how did the market get to where its at? Mainly due to overbuilding, a lot of speculative investments and home buyers buying more home then they could comfortably afford with a loan that adjusted later on. Sales started to slow down, but builders kept on building and real estate investors and home buyers became overextend, flooding the market with homes, pushing prices well below equilibrium value.

Aside from a normal market correction of an overabundant inventory, Las Vegas is the foreclosure capital of the US and foreclosures often depress home prices. Builders have had to compete against bank owned properties in several Las Vegas communities, forcing them to lower their prices in order to stay competitive. Bank owned properties account for over 65% of all home sales at the moment. According to Sales-trac, the overall resale median in Las Vegas is $184,000.

According to the report, the devaluation of the housing market should slow down in 2009. Actually Las Vegas home prices have already stabilized in several areas around the valley and some areas have actually gone up in prices, although most of those areas have few bank owned properties. The report forecasts a bottom at a median of around $182,000. Richard DeKaser, chief economist of National City said “for consumers, undervaluation should signal purchasing opportunities. Real estate is now a good buy in Las Vegas”. Before you dismiss the report as Realtor optimism, DeKaser also predicted that housing values would fall back in 2005.

Yet, history shows that markets experiencing significant undervaluation provide a “strong likelihood that buyers will be rewarded over the longer term,” DeKaser said.

That doesn’t mean anyone will make money flipping local homes in the next 12 months. But it does mean buyers with time horizons of five years or longer are likely to realize “lucrative” returns on homes they buy today, he said.

There are some great deals out there. If you are thinking about making a plunge into the Las Vegas real estate market, call me at 702-493-8033 or send me an email with your contact information and the type of property you are looking for. Thanks for stopping by.

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I received an interesting email today from Lennar Homes advertising a “certified pre-owned” Lennar home! Apparently they have some homes that were repossessed and have decided to handle the sales of those homes. One of the things Lennar is touting is reliability by buying from them. Here is a quote from their email:

• These like new homes are priced thousand’s below new home value
• Lennar conducts a meticulous wall to wall inspection
• Any items that need repair or replacing are taken care of!  Including electric plumbing, windows, appliances, drywall, roof, flooring, etc.

They are competing against a lot of bank owned properties in the valley as well as regular listings. It will be interesting to see if this foray into the resale market works out for them. The email also listed one of their Antelope homes for sale, floor plan 1775. If you are thinking of buying a home in that neighborhood, you might want to consider this one. The house has been upgraded to GE stainless steel appliances, granite slab kitchen counter tops, cat 5 wiring and comes with the Lennar 1-2-10 warranty program. All of the homes in Antelope are Energy Star certified and come with low e windows, Honeywell programmable thermostat and a 13 seer ground mounted air conditioning unit.

If you would like to see the property, call me at 702-493-8033 and arrange for you to take a tour.

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A recent article on CNN.com listed the top six cities for the best real estate bargains. The article stated some of the things I’ve been saying for the last several months on my different blogs: there are great real estate bargains to be had in the Las Vegas real estate market.

Miami Florida came in number one due to its extremely high level of inventory (about three year’s worth), a 40% price drop since last year and almost non-existant sales for homes and condos. A perfect buyer’s market to the extreme.

Las Vegas came in at the number two spot. According to the S&P/Case-Schiller home price index, home prices drop 22.8% in a year. There are also massive foreclosures as well due to heavy investing by flip-oriented investors and consumers getting adjustable rate mortgages. The article recommends Vegas for two specific markets, high rise condos and retirement. Most high rise projects were announced years ago either during or right before the real estate boom and are just being completed. Prices for most Las Vegas high rise condos are down compared to last year. The lure for retirees is the lack of state income tax, mild winter weather and wide range of entertainment options. CNN recommends buying a new home but not necessarily in one of the many Las Vegas retirement communities that have sprung up over the last several years.  Interestingly enough, they recommend outlying areas like Summerlin or the planned community of Providence.  Personally, I would add to that list based on the homes that I have just shown the communities of Anthem and Tuscany in Henderson.

Other cities to the make the list are Phoenix, San Diego, Tampa and Denver. If you are thinking about buying a home in the Las Vegas valley, feel free to contact me at 702-493-8033 or by email.