[jfkIII]

Originally Posted by logline

(Yes, I said it! Another "bottom-caller"! Lynch me!)

Or...better yet...we'll Merrill-Lynch you!

[logline]

Originally Posted by logline

Nobody has been more bearish on housing than me, but if I'm going to be honest with myself and look at all data points to make an informed decision, I have to take some bullish facts into consideration.

Barry Ritholtz (from The Big Picture blog) has a great post today discussing housing by two measures: price to income ratio and price to rent vs. buy. He links to the 2 graphs below. Although he believes there's more housing pain for most of the country, Vegas has some unique statistics. Take a look at these graphs and tell me you don't see an over-correction to the downside for Las Vegas:

Linkage in Income, Home Prices Shifts - WSJ.com

The 2011 Great Debate — Rent vs. Buy

Put simply, despite Vegas' large number of unemployed, the 86% who have a job make plenty of money to buy a home (affordability is ridiculous) and buying a home here makes WAY more sense than renting.

I think the last factor holding Vegas prices down is simply an oversupply of homes. And IF Olecapt's numbers are correct, we're well more than half way through the overhang of empty homes. If visitor numbers continue to climb and new home construction continues to lag, then that oversupply should be greatly reduced over the next 2-3 years.

The only variable/uncertainty now is the overall country's economy which is arguably teetering on recession again. If that happens, all bets are off, but at least I think there is a good, logical reason to think that we could be nearing a bottom. (Yes, I said it! Another "bottom-caller"! Lynch me!)

Just a couple more data points to support my argument (lifted from the link in Olecapt's other thread about Vegas population increase):

"The number of out-of-state driver's licenses surrendered in Clark County surged in the first half of 2011, to 28,664 turn-ins, according to the state Department of Motor Vehicles. That's up 21.7 percent when compared with 23,554 surrenders in the first six months of 2010."

and

"The local power utility [NV Energy] has added roughly 1 percent to its customer base, as measured by activated meters, for each of the past three quarters."

Also, remember that baby-boomers are now retiring en mass and will be attracted to Vegas for it's weather, low taxes, low cost of living and high entertainment value. And they simply don't need to worry about employment numbers. All those federal social security checks will be cashed here, not to mention the increase of medical spending for older people. That's a lot of Medicare dollars being pumped into this economy! Healthcare may be a big part of Vegas' recovery.

[logline]

Sorry, one more data point.

As some of you may already know, sales activity almost always precedes price movement. i.e. slower sales come before price drops and conversely, sales increase before prices start to rise.

This is from the latest Dataquick press release:

"Resale activity has risen year-over-year for six consecutive months, lifted by robust investor and cash-only purchases, including by many out-of-state buyers." (15% from CA. 3% are foreign buyers...of which 78% are Canadian and 11% from Australia)

DQNews - Las Vegas Home Sales Report

It's definitely good that sales are up, but even more important that this is "new" money coming into Vegas and not just "churning" of the existing market. This helps with taking out the oversupply I mentioned before.

About half of these buyers are buying vacation homes (a.k.a. "absentee buyers") which means traffic won't increase, social services won't take a financial hit, tourism won't suffer since these people will be compelled to continually return, and property taxes will continue to flow into government coffers. Not bad.

[eventusstultorummagister]

Inflation is now beginning to rear it's ugly head. For those who don't have their head in the sand the writing is on the wall. You can't continue to print money to sustain an economic engine that is unsustainable, something has got to give. How does this relate to housing? Wait. Sales will plummet, then prices. Can't go any lower? Guess again...

[von949]

Originally Posted by eventusstultorummagister

Inflation is now beginning to rear it's ugly head. For those who don't have their head in the sand the writing is on the wall. You can't continue to print money to sustain an economic engine that is unsustainable, something has got to give. How does this relate to housing? Wait. Sales will plummet, then prices. Can't go any lower? Guess again...

I dont really care about my home value but if prices plummet even more then Im buying an entire neighborhood.

[SportyandMisty]

Originally Posted by airics

I have 2 rentals. Rent covers mortgage on both. No problems with damages, repairs, etc. No problems with tenants. I do not use a property management company. So far a piece of cake.

Did NOT use mls to rent them out. Craigslist.

Does rent cover other cash expenses such as insurance etc?

What about after-tax - are you still generating positive ROI?

[SportyandMisty]

Originally Posted by logline

... Also, remember that baby-boomers are now retiring en mass and will be attracted to Vegas for it's weather, low taxes, low cost of living and high entertainment value...

I agree. You just described me completely.

[airics]

Originally Posted by SportyandMisty

Does rent cover other cash expenses such as insurance etc?

What about after-tax - are you still generating positive ROI?

yes... i'm still in the postive... very small roi after expenses but still positive

[vtvette]

Originally Posted by SportyandMisty

Does rent cover other cash expenses such as insurance etc?

What about after-tax - are you still generating positive ROI?

These are all operating expenses which must be considered with a rental property. We have two rental properties in our home state and our property taxes are a bit higher if the house is a rental vs. your primary dwelling. Don't know if this is the case in Nevada/Clark County.

Insurance on a rental is a bit more as compared to a owner occupied dwelling.

Mortgage rate/required down payment could be different on a property which is being purchased for use as a rental unit.

You also have to figure a percentage for maintenance/upkeep each year. The house/building will need ongoing maintenance of course. This will all depend on age of the dwelling, overall condition, etc.

[NoMoreRJ]

Can someone tell me how the forclosure process works?
My neighbors got a notice on their door few weeks ago. The renters moved out last week and yesterday some kid tried to break in and then put up a red tape with the constables office saying do not cross or enter. Today some guy shows up saying he bought it at the auction. Does foreclosure work so fast in vegas? It looks like they changed the door locks today.