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Old 04-23-2013, 09:11 AM
 
244 posts, read 286,196 times
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Manipulation?

According to the Greater Las Vegas Realtors Association the Las Vegas housing market appears to be in great shape. Median price is up, homes are flying off the shelf, etc.

HOWEVER, there are 2 significant indicators which demonstrate that the Las Vegas real estate market is not in good health:

ABSORPTION RATE - Thanks to government intervention and the artificially generated supply-demand imbalance the current absorption rate is LESS than 1 month. A "healthy" market typically has an absorption rate of 5-7 months.

PENDING SUPPLY - A "healthy market" does not have more than 1 months pending supply. With @75,000 abandoned homes in Las Vegas it is reasonable to conclude that there is well over 1 year of pending supply or 12 times that of a "healthy" market.

If there is no manipulation by GLVAR why is no disclosure made to the general public regarding this severe imbalance? How can they declare "it's in great shape" when the facts dictate otherwise? This is clearly unethical and deceptive, why is it accepted as the status quo?

Interesting link: http://abcnews.go.com/Business/insid...6#.UXanHKKsixA
7 Inside Secrets of Real Estate Agents

Last edited by VegasVicsezhowdy; 04-23-2013 at 09:23 AM..
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Old 04-23-2013, 10:57 AM
 
12,973 posts, read 12,154,435 times
Reputation: 5398
Quote:
Originally Posted by VegasVicsezhowdy View Post
Manipulation?

According to the Greater Las Vegas Realtors Association the Las Vegas housing market appears to be in great shape. Median price is up, homes are flying off the shelf, etc.

HOWEVER, there are 2 significant indicators which demonstrate that the Las Vegas real estate market is not in good health:

ABSORPTION RATE - Thanks to government intervention and the artificially generated supply-demand imbalance the current absorption rate is LESS than 1 month. A "healthy" market typically has an absorption rate of 5-7 months.

PENDING SUPPLY - A "healthy market" does not have more than 1 months pending supply. With @75,000 abandoned homes in Las Vegas it is reasonable to conclude that there is well over 1 year of pending supply or 12 times that of a "healthy" market.

If there is no manipulation by GLVAR why is no disclosure made to the general public regarding this severe imbalance? How can they declare "it's in great shape" when the facts dictate otherwise? This is clearly unethical and deceptive, why is it accepted as the status quo?

Interesting link: 7 Inside Secrets of Real Estate Agents - ABC News
7 Inside Secrets of Real Estate Agents
I am curious. Cite the GLVAR statement that the RE market is in "great shape".

What in the world does pending supply have to do with a purported 75,000 abandoned homes? And where on earth did you come up with the 75,000?

GLVAR statistics are generated off the MLS action of the membership. They are not purported to represent anything else. If you want area projection and such you go to UNLV.

The 7 RE Agent secrets are pure puffery for the 20/20 program. No meat there.
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Old 04-23-2013, 11:51 AM
 
Location: Sunrise
10,869 posts, read 13,654,914 times
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Here's a question I'd like answered by the gloom and doomers. It has been demonstrated MANY times on MANY threads that owning a house in Las Vegas is considerably better financially than renting one. Even people who purchased a house in 2007 at the peak of the bubble have done better than renting. (Providing they got a real mortgage, not an interest-only loan. And provided they didn't cash out equity right after their purchase.) Depending on the way they purchased, they are either already better off than a renter. Or they are within a year or two of being better off financially.

Since buying property in Las Vegas is supposedly foolish, what do you suggest instead? Or are you just going to point out that the game is rigged over and over? We all KNOW that the game is rigged. Nobody is trying to debate that point with you.

I'd like to start hearing some solutions from you two, because I don't think you have any. "Educate the people" is not a solution. All the information is already out there, and the masses have chosen to ignore it. They're too busy watching "The View" or "American Idols' Got Talent for Finding a Bachelor" to care much about monetary policy. And it's always been this way.
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Old 04-23-2013, 02:54 PM
 
15 posts, read 13,501 times
Reputation: 22
Quote:
Originally Posted by ScoopLV View Post
Here's a question I'd like answered by the gloom and doomers. It has been demonstrated MANY times on MANY threads that owning a house in Las Vegas is considerably better financially than renting one. Even people who purchased a house in 2007 at the peak of the bubble have done better than renting. (Providing they got a real mortgage, not an interest-only loan. And provided they didn't cash out equity right after their purchase.) Depending on the way they purchased, they are either already better off than a renter. Or they are within a year or two of being better off financially.

Since buying property in Las Vegas is supposedly foolish, what do you suggest instead? Or are you just going to point out that the game is rigged over and over? We all KNOW that the game is rigged. Nobody is trying to debate that point with you.

I'd like to start hearing some solutions from you two, because I don't think you have any. "Educate the people" is not a solution. All the information is already out there, and the masses have chosen to ignore it. They're too busy watching "The View" or "American Idols' Got Talent for Finding a Bachelor" to care much about monetary policy. And it's always been this way.
gold has only market value and not much else for that moment in time you are ready to sell. Rental property yields not only cash flow but significant tax benefits as well as possible (most likely over the long run) appreciation over time. As for manipulation I would say gold is rigged the most so I just stay away.
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Old 04-23-2013, 05:15 PM
 
2,132 posts, read 2,193,440 times
Reputation: 1301
Quote:
Originally Posted by ScoopLV View Post
Here's a question I'd like answered by the gloom and doomers. It has been demonstrated MANY times on MANY threads that owning a house in Las Vegas is considerably better financially than renting one. Even people who purchased a house in 2007 at the peak of the bubble have done better than renting. (Providing they got a real mortgage, not an interest-only loan. And provided they didn't cash out equity right after their purchase.) Depending on the way they purchased, they are either already better off than a renter. Or they are within a year or two of being better off financially.

Since buying property in Las Vegas is supposedly foolish, what do you suggest instead? Or are you just going to point out that the game is rigged over and over? We all KNOW that the game is rigged. Nobody is trying to debate that point with you.

I'd like to start hearing some solutions from you two, because I don't think you have any. "Educate the people" is not a solution. All the information is already out there, and the masses have chosen to ignore it. They're too busy watching "The View" or "American Idols' Got Talent for Finding a Bachelor" to care much about monetary policy. And it's always been this way.
Let's say you bought a house in January 2007 at 500k and put a 20% downpayment for a 30 year loan at 6% interest. Your monthly payment would be 2398.20 and you were one of the ones that decided not to walk away from the house.

If you held onto the house up to this point you would've paid 172,670.40. 140,090.32 of that is just the interest, you just paid down 32,580.08 off the principle 400k. On top of your 100k downpayment, you're into it for 272.6k on a house that is worth 250k today.

The renter who rented the same place for 1500 a month let's say paid 6 years of rent or 108k.

272.6k > 108k

How are you better off than a renter?

In the scenario I gave above, I'd still tell someone to walk away from their house. The homeowner has only paid down 32k of a 400k loan. But that is not what's happening, most people have already stopped paying their mortgages and they're just waiting to be evicted. I had a relative who's house finally went to auction last week after not paying for about 1.5 years.

No, the only people who were able to come out unscathed were the ones who took the equity out of their property before the crash became apparent. It really depends on when you bought it, how you bought it and how much of your own money you put into it.

If you were a cash purchaser in 2001-2004, you're slightly ahead. 2005-2008 you're waiting for prices to double. 2009-2012 you're content right now.
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Old 04-23-2013, 05:52 PM
 
3,574 posts, read 4,018,551 times
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Quote:
Originally Posted by ddrhazy View Post
Let's say you bought a house in January 2007 at 500k and put a 20% downpayment for a 30 year loan at 6% interest. Your monthly payment would be 2398.20 and you were one of the ones that decided not to walk away from the house.

If you held onto the house up to this point you would've paid 172,670.40. 140,090.32 of that is just the interest, you just paid down 32,580.08 off the principle 400k. On top of your 100k downpayment, you're into it for 272.6k on a house that is worth 250k today.

The renter who rented the same place for 1500 a month let's say paid 6 years of rent or 108k.

272.6k > 108k

How are you better off than a renter?

In the scenario I gave above, I'd still tell someone to walk away from their house. The homeowner has only paid down 32k of a 400k loan. But that is not what's happening, most people have already stopped paying their mortgages and they're just waiting to be evicted. I had a relative who's house finally went to auction last week after not paying for about 1.5 years.

No, the only people who were able to come out unscathed were the ones who took the equity out of their property before the crash became apparent. It really depends on when you bought it, how you bought it and how much of your own money you put into it.

If you were a cash purchaser in 2001-2004, you're slightly ahead. 2005-2008 you're waiting for prices to double. 2009-2012 you're content right now.
...and if you buy TODAY, you get the best of both worlds: low prices and low interest rates.

I haven't paid 6% interest since my first home in 2001. Where did you get that number as a 2007 interest rate?

EDIT: nevermind, I see the graph. I must've got a builder's discount back then.
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Old 04-23-2013, 06:02 PM
 
Location: Sunrise
10,869 posts, read 13,654,914 times
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Quote:
Originally Posted by ddrhazy View Post
Let's say you bought a house in January 2007 at 500k and put a 20% downpayment for a 30 year loan at 6% interest. Your monthly payment would be 2398.20 and you were one of the ones that decided not to walk away from the house.
.
.
.
The renter who rented the same place for 1500 a month let's say paid 6 years of rent or 108k.
Holy Apples and Oranges, Batman!

Where can you can rent a $500K house for $1,500 per month? You're comparing the rent on a $200,000, 2,300 sqft house with the mortgage payment on a $500K 4,500 sqft house likely with a good sized yard and probably a pool. And even in 2007, mortgage rates were as low as 3.5%.

You may as well compare the numbers leasing a Honda Civic compared to buying a Ferrari. Let's say you get some more realistic numbers and come back with a more reasonable scenario.
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Old 04-23-2013, 06:13 PM
 
2,132 posts, read 2,193,440 times
Reputation: 1301
Quote:
Originally Posted by ScoopLV View Post
Holy Apples and Oranges, Batman!

Where can you can rent a $500K house for $1,500 per month? You're comparing the rent on a $200,000, 2,300 sqft house with the mortgage payment on a $500K 4,500 sqft house likely with a good sized yard and probably a pool. And even in 2007, mortgage rates were as low as 3.5%.

You may as well compare the numbers leasing a Honda Civic compared to buying a Ferrari. Let's say you get some more realistic numbers and come back with a more reasonable scenario.
Even if you doubled the rent for our hypothetical situation, the renter would still be on top. A 500k house at the peak would not be 4500 sqft but more like 2300 sqft. Were people paying 3k/monthly rent for these houses? If they were it is news to me.
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Old 04-23-2013, 06:33 PM
 
Location: Sunrise
10,869 posts, read 13,654,914 times
Reputation: 8987
Our new house was considerably less than $500K in mid 2007 and it's almost 4,000 sqft. (And we're not talking about a fixer-upper, either.)

Your numbers do not square with what was happening in 2007. Six percent interest? I don't know ANYONE who was paying that much. I'm not saying they're not out there. But anyone financing a house at 6% should first improve their credit score, THEN go house hunting.

Come back with apples-to-apples comparisons of houses in the same general price range and neighborhood. I've already done this a few times, and renting is never the better choice -- unless the buyer has a credit score in the 450 range.
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Old 04-23-2013, 08:37 PM
 
2,132 posts, read 2,193,440 times
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I believe 6% was the market standard at 2007 for 30 year fixed mortgages. 2007 Annual Average - 6.34

Primary Mortgage Market Survey Archives - 30 Year Fixed Rate Mortgages - Freddie Mac
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