Las Vegas New Home Builders Feeling Optimistic About 2012

HOME BUILDERS OPTIMISTIC ABOUT RISING NEW HOME SALES IN 2012

The National Association of Home Builders/Wells Fargo said its Builder Sentiment index rose for a fifth straight month in February to 29, up from 25 in January, to its highest level since May 2007.

Builders have generally become more hopeful about current sales six months out, and foot traffic, the report shows.

Even with the brighter outlook, the industry has a long way to go. Any reading below 50 shows a negative sentiment about the housing market.

The index hasn't reached 50 since April 2006, the peak of the housing boom. A key reason home builders are more optimistic is that they are seeing
more people express interest in buying a home.

Sales of previously occupied homes rose in December for a third straight month. Mortgage rates have never been lower. However, home prices continue to fall, and
builders continue to slash prices to stay competitive.

Last year was the worst for new home sales since 1963. Las Vegas based Home Builders Research reported 3,894 new home sales in 2011, down from 39,000 in
2005 and 23,000 in 2001.

New homes make up a small portion of housing sales.Builders are struggling to compete with foreclosures which have forced down prices of previously occupied
homes. And many people are finding it harder to qualify for loans or meet higher down payments.

Low appraisals are scuttling some deals after contracts have been signed. One appraiser said, "one thing we know about Vegas, is that values are declining. The
key to our recovery is getting rid of our inventory."

"Let all those foreclosures work through the system.
Availability of credit is another big deal."

Those who are in a position to buy new homes are benefiting from lower prices and low interest rates. The average rate on a 30 year fixed mortgage is at
record lows of below 4 percent. Yet, these factors have done little to boost sales.

Over half of homeowners in Southern Nevada are underwater and are stuck in their homes unless they try a short sales or default on their mortgage.