Current Update on the LV Real Estate Market -- Part II (Las Vegas: burglaries, porches)
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Ummm...go look at his history. He contributes quite a bit.
Ya, you are prob. right.
Disclaimer: he is definitely a homer for the Vegas market.
If anyone tells you that things are on the upswing here, they are full of ****.
My police friends (I have many) tell me that things are getting worse on the streets, and that they are going to get worse.
So, real estate will stay low for a good time. Not only due to the crime, and economy, but due to the credit crunch, the governnment intervention into real estate, Obama (fill in the blanks for the nightmare that his Presidency has helped contribute to the crisis in America), and on and on.
As a young investor you need to learn several important lessons. The first is to be clear what your intentions are. In other words do you just want to have a place in Vegas at a reasonable price or are you looking for the best return on your Australian dollar. Next you need to decide on your price range. Depending on your answer to the first question the following answers could be given.
1. If you are looking to own property in Vegas and are not as concerned with maximizing your investment dollar then look at the 150 - 200 thousand price range in Green Valley or other similar locations in Henderson. However you would need to become familiar with each individual neighborhood as Vegas can have a wonderful area within a few blocks of a not so wonderful neighborhood. The areas you are looking for will have wonderful infrastructure, young families, great parks and recreation and seem to be now holding reasonably well to their values. This of course assumes you have figured out what a reasonable price is for the given neighborhood. This area can provide a reasonable buffer to an extreme downside potential to Vegas as it is very desirable to those who wish to live, work and raise their family in Vegas. As in all things Location, Location, Location is the driver for those who historically have seen the lowest amount of depreciation and have the greatest chance for appreciation..... One day with a bit of help from the Nevada Government to bring new comers to Vegas.
2. If you are actually looking to maximize your investment dollar with American Real Estate then you need to do one heck of a lot more due diligence as there are so many other areas and states which will have a better return on investment especially in regards to homes which can sustain themselves financially and yield a positive cash flow. You need to determine which areas continue to have businesses friendly environments so you can be assured working folks will have an income to pay rents or buy homes. It is one thing to purchase a property which can sustain itself financially and another thing to have one which also has a chance for appreciation. The later is what you are looking for as a person looking to maximize his investment dollar. Thus it is not just a bottom nation wide you are looking for but a bottom for the area you are looking to purchase. One does not necessarily go hand in hand with the other. No one can predict a bottom but you can really watch the economy in the given area to determine if your purchased property has value now and will continue to have value in the future.
3. You need to decide if you are solely looking for rental property or a property in which you hope to live someday. This would be one of the trickiest markets as this decision generally means a higher priced home regardless of the area chosen. At this time, in my opinion, the middle and upper price ranges still have a ways to fall regardless what area of America you choose. However, the lower end of the price range has stabilized in better areas and have appreciated in the last 18 months for those of us who purchased at the right price.
I have always noted a good investor looks at value based on today's rental potential as well as recognizing what the area offers as far as the future. This means an understanding of which direction poorer neighborhoods are moving as once great neighborhoods are purchased at low prices by investors who are only looking to place tenants into homes. What was once a wonderful neighborhood with a majority of owner occupiers quickly turns into a transient rental area. As other have noted, seemingly strong neighborhoods are rapidly on the decline due to gang activity and crime. This is something we have seen in spades in Vegas.
Conversely, we are also seeing areas where savvy investors and savvy homeowners have purchased areas requiring some deferred maintenance. I have seen areas were multiple homes on a street are being fixed up for resale all at one time. Generally these are quick flippers being done by a few investors who are looking for a quick 20% return on their investments. By recognizing areas like these, regardless of what state you are looking at, you stand the best chance of coming out on top.
Unfortunately, without being on the ground and having insight into the actual area you are thinking about you will be like a lamb amongst wolves. You only need to look at the predictions on this board alone to realize had you listened 4 or 5 years ago to professionals you would have had your fanny handed to you. Nothing has changed in that regard. This is a huge investment for most folks and in many cases the biggest of their lives. Why would anyone trust the input of a stranger to tell you what and where to buy without doing one heck of a ton of due diligence yourself.
Its funny, I have known tons of folks who did not question the sales person when they purchased an automobile. In most cases these folks drove off the lot 20% or more upside down on that vehicle. If that had been an investment then those folks would have lost. Nothing is different in purchasing real estate here in the states as generally once you purchase a property you are already 10 - 20% underwater due to the costs related to purchasing the property, obtaining a loan and other fees associated with escrow including prorated taxes, insurance, deferred maintenance, etc.. Then on the selling side you will expend another 7 - 10 percent for other escrow related fees and agent commissions. These agent commissions alone are generally between 4.5 and 6% of the sales price.
Thus you really need to purchase correctly, as an investor, to assure you are at least purchasing at a below market price or a market price that makes sense to a savvy investor.
In short, you have a ton to learn but the good news is information is available but it will take time and effort by you.
Best of Luck
FOD
Last edited by fishordie; 03-20-2011 at 10:14 PM..
Its not that "people don't have integrity". Some people do, and others don't. Unfortunately - large numbers of people tend to be attracted to those who lack integrity. This is because they value people who make them "feel good" over rationality.
With regards to your decision to purchase in 2006: Instead of taking responsibility for your actions, you state your lesson learned is "that people suck". This is an easy cop out that requires zero degree of self introspection.
Using common sense, why would anyone have bought, when mortgages way surpassed the rents? It really didn't take a genius to figure out we were in a bubble at that time. Particularly considering the years of double digit gains real estate prices here had undergone.
Ordinarily I do not get upset about these types of things - but I hear these types of conversations all the time. People make bad decisions, then they caste the blame on everyone else instead of looking inside themselves. Ultimately this type of mentality impacts people such as myself - the Tax Payer - since "everyone else" is perceived as the problem, "everyone else" must pay for the problem.
If you make bad decisions - that is one thing, we are all human and prone to do so. But to say things like "people lack integrity" is a very ignorant thing to say - you are judging the 99.9999% of people you have never met, and I don't think that is very healthy.
I think it would be a far more healthy approach to figure out how to learn from the mistake, and make better decisions for the future.
Quote:
Originally Posted by vegas2005
Well put my friend.
No need to feel sorry for me (bought in 2006, told all the lies moving forward), because I am a young and this was a good thing for me to learn at a young age...
that people suck.
The people that I feel sorry for are those that have families and put their dreams into a home or area, etc AND for those that saved all their lives, retired, and bought their dream home, moved to Vegas, and got screwed.
Its a terrible feeling to have, that feeling that you just can't trust others. But, that is just the way it is these days, people don't have integrity. Then again, maybe that has always been the case since the beginning.
Its not that "people don't have integrity". Some people do, and others don't. Unfortunately - large numbers of people tend to be attracted to those who lack integrity. This is because they value people who make them "feel good" over rationality.
With regards to your decision to purchase in 2006: Instead of taking responsibility for your actions, you state your lesson learned is "that people suck". This is an easy cop out that requires zero degree of self introspection.
Using common sense, why would anyone have bought, when mortgages way surpassed the rents? It really didn't take a genius to figure out we were in a bubble at that time. Particularly considering the years of double digit gains real estate prices here had undergone.
Ordinarily I do not get upset about these types of things - but I hear these types of conversations all the time. People make bad decisions, then they caste the blame on everyone else instead of looking inside themselves. Ultimately this type of mentality impacts people such as myself - the Tax Payer - since "everyone else" is perceived as the problem, "everyone else" must pay for the problem.
If you make bad decisions - that is one thing, we are all human and prone to do so. But to say things like "people lack integrity" is a very ignorant thing to say - you are judging the 99.9999% of people you have never met, and I don't think that is very healthy.
I think it would be a far more healthy approach to figure out how to learn from the mistake, and make better decisions for the future.
Yes, moving forward is all we can do.
Its one thing to lose 10-20 percent in a few years, but to lose 50-70 percent in a few years, well, that is when you have to stop blaming yourself, don't you think? I mean it takes massive fraud by several parties to get that type of downswing. Its a crying shame what happened to the real estate in this town the last few years, because I think people will look back in 20-30 years and say the downfall of Vegas started with this housing boom and bust.
Seeing as though you sort of asked, here is the full story as to why I am looking at Vegas.
Having been to the states several times (including working as a camp counselor many moons ago), I still have very close friends there. We try to get back as often as possible to visit and travel around some more. At the beginning of our retirement (in about 25 years), my wife and I want to do a couple of years travel in a motor home around the US and Canada and really check out the place. Sounds like a long time, but by the time you spend an average of 2 weeks in each state and territory, there goes 2 years.
On a working holiday in Canada (just after college), we planned to use the money we saved working in Csnada to fund a US road trip. As it turned out we weren't able to save as much as we had hoped, and needed to fund the trip with the money we had saved from Australia. At the time, the Australian dollar was at it lowest point in history (around $0.45 compared to the greenback).
Come our retirement, I don't want to find myself in that situation again. So as a bit of an insurance backup, my thinking was to buy a house (in the 100-150k range), while the Aussie dollar is around parity (or above), and the Vegas market is in the toilet. Then even if the market takes a long time to recover (even some of its lost ground), I can sell it and have enough to buy the motor home and depending on how well the market had bounced back in that time - have some extra to fund the trip. It is expected the AUD will eventually return to its usual level somewhere around .75 - .80 on the greenback, so my window of time to buy is relatively short. Then, if when we retire the AU dollar is low, we have already made money on the investment as well. In the interim, there would also be some extra rental cash accumulating that I could use for holidays while there.
We chose Vegas over other areas as I really do believe that it will bounce back within the 20 to 25 year time frame I am looking at. Assuming it does, it should well and truly pay for most of our trip. The other reason I like Vegas is because it is only a few hours drive from LAX where we always fly into on our holidays. We usually travel in quite times so are able to get really good timeshare accommodation for next to nothing. Then while we are in Vegas we do an inspection of our property/meet with our property manager, our flights, and some of our rental car fee, accommodation costs, and meals are tax deductible back here in Australia.
After personally checking out the various areas of town (with a few different realtors, for a bit over a week), and speaking to a friends brother who has lived there for 5 or 6 years, I like the Mountains Edge area. I also like the far NW (near the new hospital), but prefer the SW.
So yet another long post, but it explains why I am looking in Vegas and where. I figure the more info the readers have on my goals, the better people can respond and give advice.
At this stage any plans to buy have been put on hold for at least 12 months. I doubt the market will have a massive upswing in that time, so the biggest hurdle will the AUD tanking in that time - which is very possible??
Anyway, thanks again for any advice, and I continue to enjoy following this thread.
problem with Mountains' Edge is that it got hit really really hard with the foreclosures.. Plus all the promises of development may not happen.... I believe that M.E is the riskiest part of the valley to buy in....
Yes people from 2004 to 2008 were very unlucky. And you of course believe that all those who made money in those years off these poor victims should be made to give it back right? You hold that they should be forced to regurgitate their ill gotten gains and return them? Sure you do.
Your writings continue to display emotion with no intelligence. You rant and rave about things you do not begin to understand. You still appear unable to deal with the simple difference betweeen a mean and a median. The simplest of statistical math eludes you.
Your writings do show a considerable capability to venom and bile. But little to understanding and thought.
You continue to convert what should be an interesting discussion into a pile of manure.
Your views shine darkness...never light.
I hold that you are ever the hypocrite by taking every opportunity to fault the big evil banks for the role they played in misleading the home buying public, with nary a mention of the role snake oil salesmen like yourself played. The hucksters who denied the housing bubble existed, told people that REOs were running out which would move prices higher soon, told people that prices would be higher in 2010 than 2008, and a never ending stream of misinformation. You call the bank profits ill gotten gains, while you were "just doing my job". Fortunately, you do a trifling amount of business and have been exposed as a sham on this board.
You continue to huff and puff about median vs. mean when virtually every PR released by the GLVAR cites the median housing number. That was, and has been, the default number cited by virtually everyone on the board. Now you decide that it's really the average number that should be tracked, presumably because it shows less of a fall from your failed bottom call. You can go pound sand, I'll continue to use the GLVAR number as this board always has.
My views shine a light on the darkness of your misinformation and outright lies. You're a fraud.
The second part of this....Well, I've contended that Vegas neighborhoods tend to age very poorly. Of course HOA's will mitigate this to some extent(but then the investment may not pan out), but a high level of rentors would cause long term maintenance issues as well. I suggest your friends(or yourself) visit neighborhoods such as this:
That home was built 32 years ago(1979) and the neighborhood looks as though it was probably suburban utopia at the time. However, like many a lady luck in Vegas, this neighborhood has gone a while since its better days. Now the more common theme(if you do a street view) is that most of the front porches are covered in bars as well as the windows on some houses. I assure you that property crime in the area is significantly higher than a normal suburban utopia. I point this out as an example of how rapidly Vegas suburbs deteriorate. While many current nice ares will stay as such, those aren't the ones with $100K 4 bedroom homes, and a large number of rentors. If you need further examples, I can provide a few neighborhoods in NLV, and several others throughout the valley.
I further suggest that you not pay attention to home prices that occured from 2001-2008 or so. They are an abberation and are not relevant. If you want relevance, chart the prices from 1970 into the present.
The second part of this....Well, I've contended that Vegas neighborhoods tend to age very poorly. Of course HOA's will mitigate this to some extent(but then the investment may not pan out), but a high level of rentors would cause long term maintenance issues as well. I suggest your friends(or yourself) visit neighborhoods such as this:
That home was built 32 years ago(1979) and the neighborhood looks as though it was probably suburban utopia at the time. However, like many a lady luck in Vegas, this neighborhood has gone a while since its better days. Now the more common theme(if you do a street view) is that most of the front porches are covered in bars as well as the windows on some houses. I assure you that property crime in the area is significantly higher than a normal suburban utopia. I point this out as an example of how rapidly Vegas suburbs deteriorate. While many current nice ares will stay as such, those aren't the ones with $100K 4 bedroom homes, and a large number of rentors. If you need further examples, I can provide a few neighborhoods in NLV, and several others throughout the valley.
I further suggest that you not pay attention to home prices that occured from 2001-2008 or so. They are an abberation and are not relevant. If you want relevance, chart the prices from 1970 into the present.
Or not. I don't even know why I care.
great information.
you care because we are not as smart as you. lol.
My account is a joint one, so I am the nice guy.
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Re: Vegas2005
