Is it a good time to sell in Las Vegas?

58 Replies

The SFR median in May'20 was 315k, all time high was 315k in Jun'06. Now, with coronavirus, unemployment, forbearance, evictions to begin, strip partially opened, $600 Fed unemployment to end, etc. Is it a good time to sell in Las Vegas?

Are we near peak or at peak of real estate cycle?

Originally posted by @Terry Lao :

@Aaron Hunt

I'm a buy, hold, and sell investor. I would buy if the numbers made sense, and I would sell if the numbers made sense. Equal opportunist.

Respect. Haven’t bothered to sell any of my Vegas digs yet.


I like to humble brag that I can take a crap in a different toilet every day of the week out there.


Need to figure out where to put my money if/when I do.

Good news is June Prices were up. And those are houses that went under contract back in April in the depths of the lockdown...


The median sales price of previously owned single-family homes — the bulk of the market — was $304,000 last month, up 1.3 percent from May and 4.8 percent from June of 2018, according to a new report from the Greater Las Vegas Association of Realtors.  

And there’s a few less houses for sale. Still only a 2 1/2 month supply, could drop well under two months if sales increase now that they have open houses again  


A total of 2,903 single- family houses traded hands last month, 7,815 houses were on the market without offers at the end of June, down 0.5 percent from May

@Bill Brandt

May'20 SFR median home price was $315k. June SFR numbers will be coming out soon. How did you get Jun'20 SFR details? Your post mentioned sales up from April and May, but what is the Jun'20 SFR median?

I get a lot of opinions on Youtube, and all say market will go down in Dec'20 or beginning in 2021. I don't think the other shoe fell yet, as Fed unemployment of $600 extra will stop end of July. Unless, Fed extends the $600 payment. Evictions begin again July 1st. Forbearance end Dec'20, unless extended again for 6 months. I think the key is foreclosures. If the foreclosures start adding up, then it's 2008 all over again.

Also, printing all that federal money for stimulus, will only bring inflation.

 

If you think it will drop in December you should certainly sell now. What percent of those people that say they think that do you think have sold everything? Have you had people not paying rent? Out of 14 renters I had one move out and I got 20% more rent in 2 weeks ($1900 vs $1600). Everyone else has paid as agreed on time. 

Ps.  Las Vegas evictions don’t begin in July, earliest is September  


My source was a Las Vegas review journal article. Would paste link but you have to be subscriber. 

BUT! Never mind. I’ve included the page that “tricked me” some reason a 2019 article was linked to on their website. 

@Bill Brandt

Good one, made me laugh. The numbers don't come out on web until the 6th, 7th, or 8th of each month. 

Here's X factor. News of fake gold in china, with losses of $2.8B. Is this the tip of the iceberg? Alot of fake stuff from china, toys, watches, powder milk, and now gold? Also, I read that loan from gold went to purchase real estate in ghost cities...............not a good sign.


https://asia.nikkei.com/Spotlight/Caixin/Mystery-of-2bn-of-loans-backed-by-fake-gold-in-China

@Bill Brandt

Gold plated over copper or tungsten. The fact that this is the first fraud caught, leads me to believe there are others. The Chinese mentality of " mei ban fa " comes to mind. Taking the easy way out or making excuses. 

What made China the 2nd largest economy, will bring them down.

@Terry Lao . June numbers were out last week. There used to be a lag, but it seems they are getting out faster now. Resale SFR median sale price for Vegas metro was $312k for February, $315k for March, $305k for April, $310k May, and $322k for June.

@Phillip Dwyer

Who is your source for LV SFR median home price? I still don't see Jun'20 median home price in google search. Not even Las Vegas Review and Sun newspapers.

If Jun'20 SFR median home is $322k, then it's really good news for the RE market.

@Phillip Dwyer

Nice to have another source of information. The two major newspapers, LV Review and Sun, will publish their monthly article probably tomorrow (Tuesday), and their source is GLVAR. Your link is for entire MLS (not specifically SFR), Jun'20 $322k is a big jump from May'20 $310k. I track SFR median, just because it's easier and SFR is most common compared to condo, townhouse, and multi's.

How do you explain this increase based on coronavirus environment? I think it is low interest rates, pent up demand, low inventory, inflow of California transplants, and needed housing.

Youtube opinions and blogs, all say housing will change in Dec'20 or start downward cycle in Q1 2021. This goes against the data that was published for May'20 and Jun'20. 

@Terry Lao The link is for SFR resale median sale prices. I filtered by that criteria when setting up the data feed. If you look at the lower right hand corner in blue type you will see the filter criteria. FYI, it's no longer GLVAR. They rebranded a few months back to Las Vegas Realtors.


@Terry Lao

My experience has been that many people from China have been so used to survival mode due to over-population that they just want to get theirs before someone else gets it. It's often a WIN/LOSE mentality. If you have reached the friends/family zone, then they will take a bullet for you (nepotism), but otherwise you could go and die for all they care. In China, it has felt to me that many don't think it is wrong to lie, cheat, steal. They believe it was your fault for being an idiot and getting taken advantage of.

@Phillip Dwyer

Thanks for the link. That's useful info. Much appreciated.

@JD Bock

I'm of chinese ancestry, and 2nd generation, in USA. I'm in my 50's and just heard recently the term " mei ban fa " from watching Youtube videos about china from a caucasian's perspective. In one video, talks about everything in china falling apart due to poor workmanship and lack of maintenance. In below video, at 9:05 mark, talks about apartment building with elevator and light bulb that did not work, which is a safety hazard. For 7 years, no one wanted to replace the light bulb. People going up and down elevator for 7 years because of " mei ban fa ", what can the price of a light bulb be vs. safety?

https://www.youtube.com/watch?v=o9eXi3RL8q4&t=1s

After watching this video, it dawned on my that China will never surpass the USA in becoming #1 economically, militarily, and environmentally. China can only go so far by copying from others.

Now, with the above article about fake gold in china, this is only the tip of the iceberg. The ghost cities, poor workmanship, lack of maintenance, vacancies, and mortgaged by fake gold, will eventually collapse and take whole world with them.

@Terry Lao

I live out in Vegas and personally I think it would be crazy to sell before the stadium opens up. I know it’s back and forth with everyone, between wether we are at the peak of a cycle or the bottom throughout the country. But Vegas is making a big move in the recent years to diversify the economy. I believe a peak will come in the next 1-2 years out here after everything settles. A lot of families are leaving southern cal but want to stay semi close with relatives still in the area. The future looks bright for Vegas in the long run, even with COVID killing the tourism economy.

I want to preface this post as not having hardcore stats, but more of an anecdotal perspective that raises some questions for me. I was born and raised here in Las Vegas and have lived all over town. I have seen neighborhoods change and areas that used to be a desert landscape developed into new construction. (For reference I am 27). 

Our state's (and Las Vegas') largest employer is MGM Resorts, and the other casinos are a huge source of employment as well. Many people are still laid off and collecting unemployment. With the supplemental income from the feds, this is a HUGE amount of money for everyone currently ($4k a month) and is helping to keep things afloat. A lot of people are using this money to enjoy their summers and go to the pools and vacation and whatnot. The casinos were extremely busy (especially since California shut all their bars for the weekend due to COVID spike and Gov. Newsom's order) and a lot of the people there were from Cali, but many locals were there as well. I have seen lots of new Mercedes and people who work in the industry somehow buying new luxury cars and going out and partying, despite being unemployed. I cannot verify, but those that I know who were lucky enough to work this weekend claimed that people were "balling out" on their unemployment money.


With the largest employers having a large share of their employees still unemployed, and with the future of the tourism industry seemingly unstable (rumors of another casino shutdown looming in the face of COVID spike here in the state), I'm wondering who are all these people buying houses? In what industries are all of these Californians who are moving to the valley working? Is there any data on whether these sales are from those new to the valley vs locals? 


Friends of mine who own small businesses here in the valley, especially restaurants, are worried because they have worked hard to stay open but there is a large disregard for the new rules in a lot of places. If another shut down does occur it will disrupt a huge amount of business here in the valley and trickle down through the distributors and other ancillary organizations that depend on the tourism money, even indirectly. 

Don't forget the largest source of tax revenue for the state comes from the casino taxes. Without those, how can we afford to keep public works projects going? Even with the stadium opening, will they allow for large groups of people to attend events? Concert venues have kept having dates pushed back, with current concerts being pushed back to March of 2021 (after being pushed back to August 2020 originally). I am hoping for the best as well, but I am having a hard time understanding what's keeping Vegas afloat currently. There was another post here on the forums warning about the large numbers of foreclosures that will come this winter/spring 2021. A lot of people who were given some relief from their mortgages came to find out that to get their deferment (assuming they weren't tricked into a forbearance and tasked with coming up with 3 months of payments all at once in July) they have to go through a loan "modification" (AKA refinance). For many who are still unemployed, how will they possibly qualify for a new mortgage when they're on unemployment?

Sorry for the long post, but I just thought I would share what's puzzling me at the moment. The numbers all look great on paper as far as sales figures in the valley, but I want to know what's supporting them. I'm sure I'm missing some information and always looking to learn more.

I think the good news Michael is most of those stories you hear are made up.

The forbearance money won’t all be due in July. They don’t have to refinance or requalify. 
maybe 10% of the jobs are at casinos/on the strip, probably less. Unemployment is probably less than 20%.

A better question than who’s buying, is who’s selling? I mean you definitely aren’t selling if you’re unemployed right? You won’t be able to buy a replacement or qualify to rent without a job. Out of 14 properties I had one tenant move out when they closed their small business because of the shut down. it took 2 weeks to find new tenants paying 20% more  ($1900 vs $1600). 

People bailing from California/New York and other expensive areas continue to come to live and play  (did you see the traffic jam Sunday night going back to Cali?) If you sell you’re $600k-$1mill House in New York or California you retire, move to Vegas and live like a king in your $400k house with lower property taxes and no income tax.

The retired are making just as much as they were in January and are spending it freely. Plus we'll get a new wave as companies and governments offer early retirement. (My wife is taking the early out at UMC at the end of the month. 2 years free medical, a big check, and payment for stockpiled CAL/EiB.)

With low interest rates Vegas home prices continue to rise as people figure out if they have a job they can live in a detached house for just a little more than renting in a virus factory/apartment. 

I understand it probably won’t be all roses. And it certainly won’t be all roses for everyone. But the same people claiming the crash is coming in December or January said the crash was coming in April or May. If “everyone knows” the crash is coming in 5 months, houses prices would start crashing now. 

@Cody Nielsen

Allegiant stadium is 98% complete, and ahead of July 31 deadline. It would be a blow if NFL season gets cancelled due to coronavirus. The biggest development is Resort World, but that won't open until summer of 2021. The Drew suspended in May'20 due to developer defaulted on loan payments. 

Lots of uncertainty and yet Jun'20 SFR median price home hit new record of $325k. Compared to prior month and last year to date, both sales and inventory down.

The figurative and literal cure would be the magic pill, and a proven and tested vaccine would be developed.



https://profootballtalk.nbcsports.com/2020/07/02/allegiant-stadium-is-98-percent-complete-ahead-of-the-july-31-deadline/

We are in a Keynesian moment right now.  Can the government as consumer of last resort sufficiently sustain aggregate demand through the Covid shutdowns and beyond until the "normal" economy resumes, is the question.  In contrast to the 1930's, we do not have too much bad legislation getting in the way of this experiment (e.g. Taft Hawlety Act) and both political parties seemed to have bought into the theory that government can act as a buffer against a deflationary spiral.  My bet is that the Federal unemployment stimulus will continue through the end of the year (with some modifications insisted upon by Graham, Paul and a few others) and that there will be another round of direct payments. Las Vegas reminds me in some ways of southern Europe - where tourism and entertainment are dominant sources of revenue.  Italy, Greece etc shut down every August and resume business as usual come September.  As long as people do not fall into a hole in the mean time the situation has a good chance of correcting itself.  What happens in the long term with as a result of the infinity printing press - just say I am happy not to be a millennial.     

Terry Lao: Sad to hear about the Drew ( I guess i have not been keeping up).  Something needs to be done with that blue monster if the north strip is to prosper.