[BBMW]

Are things getting too hot?

Not again: Report finds Nevada homes among most overvalued - VEGAS INC

[lvoc]

Originally Posted by BBMW

Are things getting too hot?

Not again: Report finds Nevada homes among most overvalued - VEGAS INC

Interesting but no cigar. Fitch I believe does a calculation comparing economic growth to RE price growth.

The rub is where is the zero point? When they started what did they set as the initial conditions. I am skeptical that any market can be overpriced when homes sell below their replacement costs. I also don't believe LV is out of alignment with a projection of the 1990 to 2000 market to the present.

[henderson702]

Originally Posted by BBMW

Are things getting too hot?

Not again: Report finds Nevada homes among most overvalued - VEGAS INC

As I homeowner, I hate to see this, but it is true.

The economy here is one sided (tourist economy), and the lack of good education and culture, contributes to a very poor housing market.

Still, I think it will heat up because of the no state income tax, good weather, and close to LA…just be ready to SELL when you can, unless you want to remain in this piece of _____ town.

[monstersizin]

Originally Posted by henderson702

As I homeowner, I hate to see this, but it is true.

The economy here is one sided (tourist economy), and the lack of good education and culture, contributes to a very poor housing market.

Still, I think it will heat up because of the no state income tax, good weather, and close to LA…just be ready to SELL when you can, unless you want to remain in this piece of _____ town.

Don't let the door hit you fools on the way out.

[BBMW]

Lots of internal conflict in this post. You poo poo the Vegas economy, but agree that the housing market is getting overheated. If the latter was the case, the former likely wouldn't be happening. Yes the Vegas economy is something of a one trick pony, but it's proven to be a pretty good trick. And there has been some diversification (Amazon, Switch, etc.)

Basically nothing about the Vegas has changed from the boom to the bust, now going back up from the bottom, except for the death of the growth for growths sake industry.

Originally Posted by henderson702

As I homeowner, I hate to see this, but it is true.

The economy here is one sided (tourist economy), and the lack of good education and culture, contributes to a very poor housing market.

Still, I think it will heat up because of the no state income tax, good weather, and close to LA…just be ready to SELL when you can, unless you want to remain in this piece of _____ town.

[OmegaSupreme]

hate to say it, but a bond-ratings company should stick to...... rating bonds

vegasinc should stick to fluff... can't really mess that up

[LVguy]

oh no not again, I got my house 1 year and half ago and the housing market didn't go up much since then (Aliante) guess I purchased it at the highest point

[NYtoVT]

Originally Posted by OmegaSupreme

hate to say it, but a bond-ratings company should stick to...... rating bonds

vegasinc should stick to fluff... can't really mess that up

IIRC, Fitch was one of the three bond rating companies that told investors that CDO's and sub-prime mortgage bonds were a great investment. I wouldn't trust them, S&P or Moody's or anything they say.

[Aarco]

Originally Posted by lvoc

I am skeptical that any market can be overpriced when homes sell below their replacement costs.

Nonsence. The materials that go into building a house continue to fall. Whether it's the copper in the wire or the plastic in the pipes, or the ceramic in tiles, commodities continue to fall.

Even the labor cost have not gone up substantially and more efficient building practices off set any labor increase.

So please try something else to justify current prices. Prices should be coming down instead of going up.
Price increase without corresponding income increases aren't a positive sign. The same is true for rentals. Income inequality is manifesting itself in housing.

[SportyandMisty]

Originally Posted by Aarco

Price increase without corresponding income increases aren't a positive sign.

Don't forget many of us are retirees for whom it isn't about current income.

Housing is a balance sheet issue, not an income statement issue. I buy (or sell) houses based on my balance sheet. My income statement doesn't affect my purchase decision; the purchase or sale is merely an asset transfer. Yesterday I have more money in, say, international equities; today I rebalance my portfolio to include more real estate.

The majority of a portfolio's long-term return is due to the allocation of capital among the various asset classes (domestic large cap, domestic mid-size, domestic small cap, domestic munis, domestic corp bonds, TIPS, European large cap, etc etc etc etc).

Even in extremely expensive markets such as Silicon Valley & San Francisco, housing prices are largely driven by asset transfers rather than income -- sell a couple million in Facebook stock, then buy a house. That's an asset transfer -- it affects the size of each pie slice in a portfolio, but doesn't affect the size of the portfolio (not at first). It isn't about current income.