[007 license to sell]

A buyer or seller has to look at what is driving the market. When investors were doing most of the purchasing it cause home values to go up. That causes a temporary lift. Now that prices have gone up it has made it difficult to impossible for the average buyer to purchase a property because it has priced them out of the market and getting a loan is still difficult and for some impossible. Right now sales are up but not much and prices are up it's really about equal.

Also the article that addressed short sales have gone down, it failed to address that a lot of the short sales have been taken off the market because the Mortgage forgiveness act expired and those home owners could have a very large tax bill on the bank forgiven debt.

This is a great article that address's what has happened with the housing industry and why single family rentals may be here to stay. The answer will surprise you and there are some pretty interesting stats in here as well that I think you will find interesting.

Why Single Family Real Estate Rentals Are Here to Stay




Why Single Family Real Estate Rentals Are Here to Stay | RISMedia

Las Vegas poised for an apartment boom

http://www.reviewjournal.com/business/las-vegas-poised-apartment-boom

[BBMW]

This is false. You have to look at what's underlying those trends.

If the market is being driven by cash buyers, is there enough of a pool of them to keep driving the market? If not, what will happen when the market will have to be sustained by buyers seeking financing, in a tough environment to get financing?

Originally Posted by SLCPUNK

It is irrelevant whether the market is within "historical norms", or driven primarily by cash investors. What is relevant is current data/market trends and how buyers/sellers act on it. That's it.

[Koozie]

Originally Posted by NDJeff

I'm in 89178 as well, but not in the master planned section. I've seen 2 "For Sale" signs go up on my block alone this week. When I bought a year ago it was very hard to compete with all the cash buyers, it probably still is. I think the speculation by investors will remain until prices go up another 30-40% and the cash flow from rent can't keep up.

Jeff - I'm not in the master planned section either. It's on Fort Apache and Blue Diamond, just outside Mountains Edge. At the time I bought, it was taking most people 6 months or more to get the bank to finance a short sale. Cash still appears to be king if you're in a desirable area, but I seriously doubt prices will go up another 30/40% unless the banks continue holding their inventory thus driving up demand/price.

Originally Posted by TomKBL

Good for you! Is it relatively a small house good for investment? Just curious about what kind of cash-buyers they are.

Thank you. It's under 2,000sf and under 200k. Yea, I'm 98% sure they're investors.

[SportyandMisty]

Originally Posted by BBMW

...You have to look at what's underlying those trends.

If the market is being driven by cash buyers, is there enough of a pool of them to keep driving the market? If not, what will happen when the market will have to be sustained by buyers seeking financing, in a tough environment to get financing?

Here's my viewpoint, and, unlike my wife, I'll admit I might be wrong about my viewpoint.

Draw a pie chart of demand for housing, with slices of the pie allocated to various types of buyers. The trick is defining the categories. I think most people would probably include the following categories:

• Individuals who are still working (not yet retired) buying a home for their own use.
• Individuals (out-of-towners) buying a vacation home.
• Retirees, most of whom are relocating from out of town (rather than moving from one part of Las Vegas to another).
• Local investors who live in the community buying a home with the intention of renting it out as an investment.
• Out-of-town investors buying one (or a few) homes/condos for investment purposes.
• Large institutional money funds buying real estate as an investment.
• Other - everything else.

Individuals buying for themselves, and local individual investors, use their unique feet-on-the-street knowledge of local neighborhoods to decide where they want to purchase & at what price.

Local business conditions drive individual owner-occupied demand. Local business conditions coupled with unique feet-on-the-street value & investment acumen drives local investors. Demographics drives retirement. Speculation drives individual out-of-town investors.

When it comes to large institutional investors, we are in the middle of a long-term secular shift in how pension funds, and in particular public sector pension funds, allocate their money. It is no secret that the overall demographics of the USA indicate we are at the beginning of a 15-year retirement wave as baby boomers reach retirement age. This has a profound implication for demand from retirees who want to relocate here, but it also has a profound implication for demand from institutional investors who have to pay their soon-to-be-retired beneficiaries each month.

Pension funds historically have targeted a 5% after inflation return, which nowadays means about 7% to 8% before inflation. Achieving a 5% after-inflation return (economists call this a "real return") was pretty much a no-brainer up until the late 1990s. The long-run real yield since 1900 is 5 percent, and the realized returns matched the promise as a traditional 60% stocks, 40% bonds portfolio delivered very close to 5% real annual return decade after decade.

No more.

Since 1998, the real yield of a 60/40 portfolio has been below 3% most of the time. Yes, 2013 was a great year. But currently, the prospective yield going forward is less than 2.4% -- which is another way of saying the prices of equities is quite high (just look at the price of DIA, SPY, QQQ, VXF, etc).

If you do a google search on {"alternative assets" and "pensions"} you will find article after article about a shift in asset allocation away from traditional stocks & bonds to include "alternatives" which includes real estate. The driver, of course, is the prospective yield of equities is so low because the stock market is so high. See for example https://www.seanc.org/files/3813/735..._June_2012.pdf and https://www.dws-investments.com/EN/r...et-classes.pdf and Pension funds increasing alternative asset allocations, says study | Property Funds World among many others.

Not to go to far afield, but up until the 1960s, stocks were considered a speculative investment; by the 1970s, everyone owned stocks in addition to bonds. In the late 1980s and early 1990s, pension funds were largely in stocks & bonds, with little allocated elsewhere. By about 15 years ago, it was widely recognized that a traditional investment portfolio of 60% stocks & 40% bonds actually incurred 90% of its risk from stocks. Academics point out having 90% of the risk of the portfolio in a single asset class was not smart. Many practitioners started allocating tiny slices of their multi-billion-dollar portfolios into these alternative asset classes. Why? Well, if there is a free lunch anywhere, it is in diversification. Everyone understands the adage "don't put all your eggs in one basket." At the institutional level, they more and more say "have many different types of baskets." All of this is in a search for an elusive zero correlation.

Pension funds, at the level of the Investment Policy Committee, have been directing their staff to allocate more money to real estate. Typically, they publish a statement giving a target percentage allocation -- say, "We plan to shift to x% invested in alternatives by the year 2016" or the like. The staff then go to specific money managers (entrepreneurs) who say "I'll invest your money in real estate by purchasing residential real estate." These money managers receive allocations hundreds of millions of dollars each year, and then go on a shopping trip.

The pension funds use the income from those rental properties to turn around & pay out monthly pension payments to retirees.

We're getting more retirees every year... so will pension funds continue to purchase real estate?

No one can predict the future, but my reading of articles published in a variety of institutional investor practitioner journals & magazines indicate the answer is "yes." Institutional funds have not yet reached what I'd call a steady-state where they actually own the percentage of real estate that they wish to own long-term. They are ramping up still. An interesting question is what will happen when pensions have achieved their objective of x% in real estate. They will continue to buy, of course, because each year the fund increases in size, and that extra money gets allocated to the various asset classes they hold. But they will merely be buying to maintain x% -- that is, until the Investment Policy Committee changes its mind about the percentage allocation.

OK, I'm off my soapbox.

[SLCPUNK]

Originally Posted by BBMW

This is false. You have to look at what's underlying those trends.

If the market is being driven by cash buyers, is there enough of a pool of them to keep driving the market? If not, what will happen when the market will have to be sustained by buyers seeking financing, in a tough environment to get financing?

We are talking about two different things. I can look at the underlying fundamentals and see a cash driven market (which personally I'm not a fan of.) But that doesn't change (for instance) 3 months of inventory and how that affects current buyers/sellers right now. So if you'd like the current update of a RE market, then that's it.

Three months inventory doesn't equal ten months of inventory now, because somebody doesn't like the dynamics of this particular market. Three months equals three months.

It's not difficult to get financing.

[Onlyliveonce]

I purchased my primary residence here in early 2012. A few people in this thread constantly post prices are heading down. My homes value is up approx 50% since then, and I have an interest lower than 3% . I have been living life here in the Valley raising my kids. Life is good here in the Valley. Am I missing something ? I am in it for the long haul and living out my golden years here and I am only in my 40's. I really love it here.

[logline]

Originally Posted by Onlyliveonce

I purchased my primary residence here in early 2012. A few people in this thread constantly post prices are heading down. My homes value is up approx 50% since then, and I have an interest lower than 3% . I have been living life here in the Valley raising my kids. Life is good here in the Valley. Am I missing something ? I am in it for the long haul and living out my golden years here and I am only in my 40's. I really love it here.

I could have written that post myself. Totally agree.

[Onlyliveonce]

After posting a positive experience,which has been based on two years of home ownership I can hear a pin drop in this thread. I can't remember the last time this thread has been this quiet. It's amazing, if you post negativity and real estate there is lots of actively here. Post up a positive experience and the negative people become very quiet. Please don't hate cause I'm a happy homeowner in the valley . Any other positive experiences please share. It ain't all bad people.

[ohhboy]

what peepls don't realize is that las vegas real estate is good if you buy intelligently!

I said be4, current president wont be there 4 ever! A good sign when to buy is when people only post negative-----like right now. All I hear here is don, don't, and don't!


Now is absolute good time to buy. 2 years ago was better! but that's life.


I see a lot of decent things to buy now...don't know which to choose.

[Koozie]

Originally Posted by ohhboy

what peepls don't realize is that las vegas real estate is good if you buy intelligently!

I said be4, current president wont be there 4 ever! A good sign when to buy is when people only post negative-----like right now. All I hear here is don, don't, and don't!


Now is absolute good time to buy. 2 years ago was better! but that's life.


I see a lot of decent things to buy now...don't know which to choose.

The best time to buy is when one can afford the home they're purchasing. That could be today, 2 years from now or even back in 2006. The Vegas market would be so much better off if people would start basing the time to buy on their savings account balance.