[ddrhazy]

Originally Posted by Laminate7

-40K empty homes will come on the market in 2014-15 in vegas
-another 80K homes have people in them that have not made a mortgage payment in years and will be forclosed on in the next few years
-rising interest rates
-rental prices dropping

The best way to live in vegas is rent a house. period. crash is coming -

The problem with your statistics is some of them overlap. The empty houses are also considered part of the delinquent mortgages.

[lvoc]

Originally Posted by ddrhazy

The problem with your statistics is some of them overlap. The empty houses are also considered part of the delinquent mortgages.

And the overall system is not capable of handling more than 1500 or so distressed houses in a month. So max yield if the lenders were to go berserk would not get to more than 18,000 or so a year. The REs are also rapidly approaching non-distressed in price. So if they do go at it in a big way the most it is likely to do is ease the inventory crunch some. Which would be nice.

[Kevin_nlv]

Las Vegas market is where hedge funds and investors have been going in hand over fist for the last few years. Yet when you look at the data, what you find is a market that is essentially trading homes to one another in a large game of musical chairs.
Study from the UNL found that 40,000 homes are vacant. However you dice it, there are plenty of homes that can be sold. Yet over half of all purchases are happening from arms distant investors, nearly 60%. Our local underlying economy doesn’t exactly look like it is booming to justify a 20+ year-over-year gain.
Investors are hungry for yield. Returns just got much more lucrative outside of real estate with rates going up dramatically in the last few weeks. Is it still worth it to chase these yields?
I wonder what was intention of artificially low interest rates? Was the intention of low rates to create entire regions of flipping activity for big hedge funds and to punish regular buyers? That is the end result.

We’re already seeing major pressure on rents in Las Vegas. Rents are paid via actual net income from a paycheck (yes, those pesky incomes do matter). With home prices skyrocketing, yields are already unattractive so why dive in? The move in interest rates will definitely have an impact. Las Vegas is an exaggerated case of what went down with stalling foreclosures, subsidizing Wall Street funds with low rates, and basically punishing those that saved and are trying to buy a home to live in versus flip, hedge, or convert into some income stream for a REIT. The fact that investor demand is still feverish and the economic fundamentals stopped making sense a year ago Las Vegas market is safely into mania mode.

[tbill618]

Originally Posted by Laminate7

-40K empty homes will come on the market in 2014-15 in vegas
-another 80K homes have people in them that have not made a mortgage payment in years and will be forclosed on in the next few years
-rising interest rates
-rental prices dropping

The best way to live in vegas is rent a house. period. crash is coming -

There are net 50k moving to Clark County every year. That will probably absorb 15-20k homes/condos per year. Look at housing construction. Builders aren't that stupid, they must have some demand to be building so much. 2015 and beyond I can't say what will happen but I doubt it will be total collapse.

[lvoc]

June prices are up 6%. Volume is up. Inventory is up. Non-distressed is now 60% of the volume.

Even more interesting Foreclosed homes are now selling for $12 PSF more than shorts. A couple of years ago it was the opposite with shorts $10 PSF higher than REOs. It has now reached the point where the only good buys are shorts. Some of this of course may simply be the long delays in shorts. We are seeing pricing set last year rather than recently.

The crucial thing is there does not appear to be a slowing in the rate of rise.

[ddrhazy]

Originally Posted by lvoc

June prices are up 6%. Volume is up. Inventory is up. Non-distressed is now 60% of the volume.

Even more interesting Foreclosed homes are now selling for $12 PSF more than shorts. A couple of years ago it was the opposite with shorts $10 PSF higher than REOs. It has now reached the point where the only good buys are shorts. Some of this of course may simply be the long delays in shorts. We are seeing pricing set last year rather than recently.

The crucial thing is there does not appear to be a slowing in the rate of rise.

It makes sense as there is a risk with shore sales. Waiting 6-12 months to find out the bank finally counters your initial purchase offer for 10% more makes REO more desirable.

[ddrhazy]

Originally Posted by tbill618

There are net 50k moving to Clark County every year. That will probably absorb 15-20k homes/condos per year. Look at housing construction. Builders aren't that stupid, they must have some demand to be building so much. 2015 and beyond I can't say what will happen but I doubt it will be total collapse.

http://cber.unlv.edu/commentary/CBER-19June2012.pdf

[lvoc]

Originally Posted by ddrhazy

It makes sense as there is a risk with shore sales. Waiting 6-12 months to find out the bank finally counters your initial purchase offer for 10% more makes REO more desirable.

Well yes no...

Last month we came across a three BR condo in Fulton Park on Charleston. Originally listed for 80K. Bank came back at $100K and the original buyer quit. . We offered a little over $110K and finished second or worse. I expect the unit might appraise at just over 100K. We deliberately over bid...knowing that it would attract investors even though our buyer was going to owner occupy.

So I expect it is only a matter of time until the shorts move back up.

[ddrhazy]

Originally Posted by lvoc

Well yes no...

Last month we came across a three BR condo in Fulton Park on Charleston. Originally listed for 80K. Bank came back at $100K and the original buyer quit. . We offered a little over $110K and finished second or worse. I expect the unit might appraise at just over 100K. We deliberately over bid...knowing that it would attract investors even though our buyer was going to owner occupy.

So I expect it is only a matter of time until the shorts move back up.

I have no problem with a bank countering, it's the amount of time a buyer has to wait to receive the counter that is the problem.

[Kevin_nlv]

Rents are trending lower, incomes are stagnant or decreasing, costs of rental maintenance, repairs, and evictions increase as the dollar devalues. It was close to 117 in Las Vegas today. Average electric bill during the summer: $500 a month. Very practical place to own a house. Throw in a very large floating population and generally very poor schools and you have a real winner.

But we are talking about vegas so if gamblers/investors are stupid enough to let it ride in those properties they have recently acquired then they deserve the blood bath that awaits them. A fool and his money are soon parted.