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Now, there are two pieces to this. One, we know there is a shortage of new and existing homes. We did not build any for almost 4 years and the population kept growing. They want homes, the "nation of renters" meme that was going around in '10-'11 was never valid, it is being proven so now. So, that shortage is causing prices to rise all over the nation. There are two ramifications for the Howard Hughes Corporation (NYSE:HHC), both which are hugely positive (HHC has properties in Houston, Vegas, Hawaii and Columbia, MD). See below for Vegas.

From the Review Journal:

Existing home sales in Las Vegas continued to decline with 2,640 escrow closings in February, a 13.5 percent drop from the same month a year ago, the Greater Las Vegas Association of Realtors reported Thursday.

Lack of inventory is limiting sales, said Dave Tina, president of the association. The number of single-family home listings without a contingent or pending offer has been cut in half from 6,543 a year ago to 3,047 in February.

The median price remained unchanged from January at $150,000, which is a 24 percent increase from a year ago.

"We have buyers all over who are looking for homes here and we have a lack of inventory," Tina said. "At the same time, that lack of inventory is sending prices up."

Inventory is likely to stay low throughout this year, even though legislators are expected to amend Assembly Bill 284, the robo-signing law that throttled notice of default filings.

David Brownell of Keller Williams Realty said he'd heard that title and escrow companies had signed off on modified language for the law, and it looks like changes to the statute would be approved during the legislative session.

"Certainly, that will motivate potential short-sellers who have been sitting on the fence, enjoying their many months of extra discretionary income from not making a mortgage or rental payment," the real estate agent said. "And banks should be able to accelerate the foreclosure process again, which is currently at a near standstill."

The question remains as to how long it will be before those homes make it to the market.

Tim Kelly Kiernan of ReMax Extreme said he attended a meeting in which several bank officials suggested real estate-owned homes won't be coming the way some real estate agents think.

"Bank of America is selling off as many as they can before they go to foreclosure so they don't have to handle the REO process," he said. "Wonder how many other big banks will do that?"

Kiernan said 13,000 homes are in escrow with contingent offers, and 9,600 of them are short sales, or lender-approved sales for less than the mortgage balance.

Not much has changed in the last month, Brownell said. He disagreed with an industry insider who recently described the Las Vegas housing market as full of distressed assets - real estate-owned homes and short sales.

Nearly 74 percent of current inventory is comprised of traditional equity listings, compared with 41 percent a year ago and 30 percent two years ago. For the second month in a row, traditional equity sales accounted for more than half of total closings.

Now, the usual response would be, "well builders will just go out and buy more land and build." But, problem is they really can't right now.

From the NAHB:

A recent blog showed that, after many quarters of persistent and often extreme tightening, availability of credit for land acquisition, development and construction (AD&C) eased slightly at the end of 2012.

However, most of the improvement was in the availability of loans for single-family construction. For land acquisition and development, NAHB members were closer to evenly split on whether credit conditions had improved or gotten worse.

A similar difference showed up in the percentages of builders and developers putting various types of projects on hold until the financing climate improves. While "only" 32% reported putting single-family construction projects on hold in the fourth quarter, the shares were 44% for land acquisition and 49% for land development.

Although all were improvements over the previous quarter, the improvement was strongest in single-family construction. As a result, a 17 percentage point gap has opened between development and construction-the largest since NAHB initiated the AD&C survey in its current form in 2008:

(click to enlarge)

So, for those companies sitting on huge amounts of deeded land, like our $HHC, they are going to see years of steady and increasing demand for it. That means continued increasing results. Remember, $HHC was spun from General Growth Properties (GGP) post Chapter 11 so its cost basis for its land is essentially zero. The permitting and approvals have already been done. All there is to do is for builders to come in an outbid each other for the lots (which they are doing).

From their Q4 release:

August 2012 auction of 375 lots at The Woodlands generated an aggregate 49%, or $16.7 million, increase in price of the lots compared to the selling prices before the auction.

Early results for 2013 are well above 2012. In Hawaii they just sold 209 luxury condos for an avg of $1,500sqft in 29 hours.

Source: Vegas Prices Rise 24% - Land Hard To Get Nationally