[fishordie]

Originally Posted by JohnG72

Sigh, I posted a link in this thread a few days ago stating a 3% decline in Vegas rental prices.

Furthermore common sense would indicate that as more investors buy and fix up foreclosures, that there will be an oversupply of rentals on the market assuming the population remains the same, which has been the case over the past 3 years

Hi John,

As I have noted in the past, today's savvy investor is not using industry professionals to rent their lower end, newly purchased homes. Rather they are using simple to use internet advertising such as Craig's list to move their product with very successful results. The numbers you are referring to are generally homes priced and valued in the middle and upper ends of the market where savvy investors rarely invest. In the last several years it is those folks who are underwater on a second home who are just trying to rent out the property to take in some income to help offset the mortgage rather than just be foreclosed on. These are the folks who are affecting the rental market adversely. But this has little or nothing to do with the great ROI lower priced homes being highly sought after by investors who are not showing up with their rental amounts in the published rental prices.

According to your figures the Vegas population is not changing thus for every family who loses their home they need a rental. There are plenty of
neighborhoods who will not attract many renters from the traditional family market and may remain hard to rent until the owner lowers the rent enough to meet the very low end market demand. However, for those homes located in reasonably desirable and highly desirable neighborhoods we will see an increase in rents as these homes which were foreclosed on sometime ago and have since changed hands and have been redone are getting better than published prices for rent. Again, using industry published figures can be very deceiving for those who do not completely understand how they work and what they mean for your property specific.

FOD

[JohnG72]

Originally Posted by fishordie

Hi John,

As I have noted in the past, today's savvy investor is not using industry professionals to rent their lower end, newly purchased homes. Rather they are using simple to use internet advertising such as Craig's list to move their product with very successful results. The numbers you are referring to are generally homes priced and valued in the middle and upper ends of the market where savvy investors rarely invest. In the last several years it is those folks who are underwater on a second home who are just trying to rent out the property to take in some income to help offset the mortgage rather than just be foreclosed on. These are the folks who are affecting the rental market adversely. But this has little or nothing to do with the great ROI lower priced homes being highly sought after by investors who are not showing up with their rental amounts in the published rental prices.

According to your figures the Vegas population is not changing thus for every family who loses their home they need a rental. There are plenty of
neighborhoods who will not attract many renters from the traditional family market and may remain hard to rent until the owner lowers the rent enough to meet the very low end market demand. However, for those homes located in reasonably desirable and highly desirable neighborhoods we will see an increase in rents as these homes which were foreclosed on sometime ago and have since changed hands and have been redone are getting better than published prices for rent. Again, using industry published figures can be very deceiving for those who do not completely understand how they work and what they mean for your property specific.

FOD

My premise is based on the idea that until the past few years, more homes were built in Las Vegas than were needed to support the population. This premise is correct.

So therefore as investors buy up and return homes to the rental market, some will begin to sit empty. Obv location and condition play a huge factor and some places will experience normal vacancy levels while others experience quite high vacancy levels.

[JohnG72]

Originally Posted by olecapt

No you didn't. You posted a side mention of the trend on commercial multi-family rentals.

That is an entirely different subject.

You knew that didn't you?

Are you saying the link I posted failed to demonstrate a decline in rents in Las Vegas?

Are you saying there is minimal connection between rents of one type of property vs another in the SAME market?

[olecapt]

Originally Posted by JohnG72

Are you saying the link I posted failed to demonstrate a decline in rents in Las Vegas?

Are you saying there is minimal connection between rents of one type of property vs another in the SAME market?

No I am saying that you provided nothing that shows such an outcome. The impact of a 3% down in commercial suggests weakness in that market segment. That may well however be due to the availability of SFRs at reasonable prices. So there may well be an inverse relationship.

I am however saying that there is no recent drop in the rental price of SFRs. Volume is up. Inventory continues to drop and pricing appears stable.

One of the more interesting things is that the commercial guys continue to add units. There is a brand new and huge development at Lone Mountain and 95. And there are a half dozen others around the valley. They apparently know something you don't.

[007 license to sell]

Like everything else you hear you have to take the census stats with a grain of salt. As you will see when you read this news paper article the census states we have over 100,000 empty properties, unfortunately they count time shares and hotel rooms so the figured is skewed I have been told by other analysts that it's more like 60,000 properties that are empty.

Census: Many Las Vegas areas are nearly deserted

The new census numbers say Las Vegas is practically a ghost town. When the housing bubble blew and the economy sank,...
Source: Las Vegas Review Journal

[olecapt]

Originally Posted by 007 license to sell

Like everything else you hear you have to take the census stats with a grain of salt. As you will see when you read this news paper article the census states we have over 100,000 empty properties, unfortunately they count time shares and hotel rooms so the figured is skewed I have been told by other analysts that it's more like 60,000 properties that are empty.

Census: Many Las Vegas areas are nearly deserted

The new census numbers say Las Vegas is practically a ghost town. When the housing bubble blew and the economy sank,...
Source: Las Vegas Review Journal

More like 42,000 and that is probably only 10,000 or so above a reasonable level.

Still need to work off some more...but it is not a huge number.

Doomers will need a new theory as to why it must get worse.

[olecapt]

Originally Posted by Superman1234

This is incorrect. I follow the rental market. Investors are having a difficult time renting out homes. They have lowered their rents to attract potential renters. Question is how low will they go. As regards to apartment rental communities, the price have remained the same. The only reason why the prices remain the same is due to the fact that renters are scared to rent out homes that could be possibly foreclosed upon.

See...

http://www.lasvegasrealtor.com/stats/Statindex.htm

Average 2011 rental price right now is about $50 above 2009 and 2010.

Leased is about 25% above listed...so inventory is headed down fast.

[Sheryl_Jones]

Originally Posted by olecapt

See...

http://www.lasvegasrealtor.com/stats/Statindex.htm

Average 2011 rental price right now is about $50 above 2009 and 2010.

Leased is about 25% above listed...so inventory is headed down fast.

How does inflation factor into rents and into home prices?

I know there is the market forces, number of buyers and sellers, number of renters and landlords - but does inflation factor in and in the case we had bad inflation (gasoline $10 a gallon, bread $10 a loaf, milk $10 a gallon) then wouldn't that bring housing prices and rental rates up to a very high number again - only it would just be an illusion, that appears as if things are getting better, but could really be staying the same or worse, if inflation gets factored in.

I'm not arguing growth or decline in rents, housing prices or number of vacancies, I'm just wondering what psychological effects might come into play such as those caused by inflation or those caused by "rent always goes up the next lease period, even by a small amount" way of thinking, things like that, if those are coming into play in the LV marketplace too, which is truly confusing to an out of towner, especially if she is old(er) and blonde.

[Robustus]

Originally Posted by Sheryl_Jones

How does inflation factor into rents and into home prices?

I know there is the market forces, number of buyers and sellers, number of renters and landlords - but does inflation factor in and in the case we had bad inflation (gasoline $10 a gallon, bread $10 a loaf, milk $10 a gallon) then wouldn't that bring housing prices and rental rates up to a very high number again - only it would just be an illusion, that appears as if things are getting better, but could really be staying the same or worse, if inflation gets factored in.

Yeah, if it's the kind of inflation we've had in the past that also includes wage inflation. If not, we could see spikes in certain sectors (food, energy), but not others.

Long term, though, it seems a moderate/high broad-based inflation is necessary. The US has pay its debt, and apparently will continue to keep spending a couple trillion bucks more than it takes in every year, so the only solution is to inflate the money supply. What that means in the short term for real-estate prices is questionable, since one of the first effects will be a rise in mortgage rates which will dampen demand. But long term a broad inflation will raise nominal asset prices considerably.

[SportyandMisty]

Originally Posted by olecapt

See...

http://www.lasvegasrealtor.com/stats/Statindex.htm

Average 2011 rental price right now is about $50 above 2009 and 2010.

Leased is about 25% above listed...so inventory is headed down fast.

Fascinating. Any idea why?