COLUMN: Carmel Hopkins

For the second time this year, Ted Jones, director of investor relations for Stewart Title Co., spoke at a Las Vegas Executive Housing Market Seminar hosted by the Meyers Group.

A standing-room-only crowd heard Jones, who's also a senior vice president and chief economist for Stewart, give updates about the effects of the war with Iraq and other economic concerns.

"The issues in Iraq will never be resolved," Jones said about that war-torn nation, "because there are 18 tribes who are all fighting to be on top."

The economist believes that the Bush administration is heading the country in the right direction and is bullish on the economy, particularly the real estate sector.

"The 2003 economic buzzword is deflation," Jones said, although he sees no possibility of deflation affecting the United States.

"Japan is suffering from deflation and its troubles will continue," he said. "Here's the demographics: the country has 126 million people who are having 1.3 children, so the country shrinks every year."

He pointed out that the U.S. is in a growth pattern such that deflation couldn't be a problem.

"Immigrants come here, they work hard, raise families and buy houses. The current population is 286 million; in 2050 it will be 470 million."

Jones is a Texan -- a stereotypical big guy with a big voice and expansive gestures. He is totally pleased with the low interest rates, low jobless rates and high productivity rates.

"Eighty-one percent of the durability of mortgage rates is based on the Fed," Jones said about the current market. "The next big downturn is when (Alan) Greenspan (chairman of the Federal Reserve Board) dies, retires or is fired."

Tim Sullivan, principal of the Meyers Group and an economist who has his fingers on the pulse of Las Vegas, continues to be positive about the local housing market although he voiced some of the same concerns as other analysts about the shrinking supply of land.

"This is the best market in land and home sales in the U.S.," Sullivan said. "The Achilles' heel is that land and home prices are going up more quickly. Land is now averaging $300,000 an acre."

He was quick to point out that land in San Diego County sells for $1 million an acre and choice coast property is at least $1.2 million an acre. As the valley keeps growing and the number of home builders keeps shrinking, so do the number of active subdivisions. There were 545 neighborhoods being sold in Las Vegas in 1998. Now, the number is 301. That doesn't mean fewer homes are being sold -- last year there were 22,502 new homes sold for a median price of $186,827. This year's recorded new-home sales will be in excess of 23,000 and the median price probably will be close to $200,000. With homes such as condos at Turnberry Place coming into the mix of sales of existing housing, the price of resales also is skyrocketing.

Builders are having trouble keeping up with the demand. Where once this was a buyer's market with home builders crying about the excessive inventory they were carrying, builders now have only a 27-day supply.

Sullivan's bottom line was this is a flourishing market with more demand than supply, very good news, indeed, for home builders.

Carmel Hopkins, real estate product manager for the Las Vegas Review-Journal and Las Vegas Sun, can be reached at 380-4574. Her e-mail address is Carmel_Hopkins@ lasvegasnewspapers.com. Snail mail is P.O. Box 70, Las Vegas, NV 89125.

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