Las Vegas Real Estate News

August 12, 2012 by
Filed under: Business 

The Las Vegas Market is Full of Real Estate News!

by John M. Edmunds
It’s being reported that foreclosures are down 60% from a year ago and that the median price is up 7.5% from a year ago. Both numbers sound good on the surface (they also make politicians look good) but in reality both are very misleading. For one the reduction in foreclosures is a direct result of assembly bill 284 which made it next to impossible for banks to foreclose on a home in Nevada beginning Oct 1, 2011. The median price increase is a result of low inventory, few REO’s on the market and more buyers chasing what short sale inventory there is.

It does not mean we are out of the woods so to speak. What use to be called a “shadow inventory” of REO’s is now a “shadow inventory” of home owners living in their homes and not paying a mortgage payment. Of course some of these homes are vacant but the banks still can’t foreclose.  There are no accurate numbers but it is estimated to be in the tens of thousands. The likelihood of all of these home owners being able to take advantage of their banks refinance programs or government programs like HARP slips further away as each month passes. So we are in this for some time yet, my guess at least five moreyears.

As investors we see this as an ongoing opportunity.  Rate of returns are averaging 8%-10%, where can you get better ROI?  We may have in fact reached our bottom in the first quarter but we could revisit the this bottom if homeowners voluntarily give up their homes with a Deed in Lieu or the banks up the anti on move out premiums, BofA and Chase are offering as much as $30k for some types of loans. I would not look at the recent price increases as an increase in value but as a premium to be paid as a result of low inventory.

My personal opinion, it’s still perfect timing for investment purchases. Rents have actually increased marginally and vacancy has decreased in the past six months. I think this trend will continue through out this cycle. There are some who continue to believe we over built and have an over supply of housing, I have a contrary opinion. Las Vegas for all intensive purposes is built out with the exception for parts of Summerlin to the extreme west, Aliant to the extreme north, and Anthum and Southern Highlands in the extreme south west. All of these master planned communities could be absorbed in 3-5 years if we had anywhere close to the growth per year Las Vegas experienced between 1987-2007, almost 5,000 people a month moved to Las Vegas.  Las Vegas continues to be the adult entertainment capital of the world and a retirement mecca for those who like little just a little bit more with retirement.

Happy Investing
John M. Edmunds

Realty ONE Group – John Edmunds & Associates
REO Broker/CDPE/SFR Short Sale Specialists
2831 St. Rose Pkwy, Suite 100
Henderson, NV 89052
702-373-9229 Cell
VegasPpty@aol.com
www.JohnSellingLasVegas.com

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Comments

3 Comments on Las Vegas Real Estate News

  1. Rich Cederberg on Mon, 13th Aug 2012 7:51 am

    2. Hey John, sometimes I think we forget that some places haven’t yet recovered completely from the economic crisis. I’m glad some investors can make lemonade with all these lemons and I hope the LV market sees true recovery soon.

  2. Bill Bentley on Mon, 13th Aug 2012 9:53 pm

    3. John, I believe that you are pretty much on point and have provided a good synopsis of the local Las Vegas Market. This is a good market for Investors. I dont see the rental market going away anytime soon. I also beleive that its a good market for “regular” buyers as well, These prices are still really good for Vegas and the recovery will happen here.

  3. Joan Brooks on Tue, 14th Aug 2012 11:40 am

    4. Hi John.. your summary of the market here does make sense for all buyers the prices are so below market value. We are definelty the hardest hit in the country and the opportunity is here for the taking.
    Investors with cash are King here the Banks need to relax and help potential homeowners make it happen. The rates are the lowest we will ever see the process should be an easy one for most buyers who a. have a job b. have decent credit.
    The current issue is the low inventory and once again the Banks are holding that process up with all the new programs they are trying to implement. The worst plan they have is to keep the current inventory of foeclosures for a period of 3 to 5 years and rent them out to either the current owners or the general public. That will add to the rental market it will be interesting to see how that will play out.
    Our current market is in continual change… and that is the one thing we can count on .. change.

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