Real Estate News & Current Events

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Robert Adams
  • Real Estate Broker
  • Henderson, NV
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Las Vegas Market going through changes

Robert Adams
  • Real Estate Broker
  • Henderson, NV
Posted Jun 17 2013, 11:32

I am interested to hear people thoughts on the Las Vegas market.

We have many new factors to consider when predicting the market in the upcoming future. Some of the topics I was looking to get more info on are:

-New legislation passed here in NV AB300, SB321, also the new law that will allow underwater homeowners to short sell their homes to themselves without an "arms-length" transaction disclosure being required.

-Hedge funds leaving Vegas

-New/higher home prices combined with lower rental rates causing lower CAP rates and cashflow

-The 80,000+ homeowners that are in default

-The spike in NOD's being filed (Las Vegas is currently the 2nd leading city for NOD's being filed.

These are just a few of the factors our local market is currently facing. Due to these factors it is hard to predict the market going out further than then next 6 months. I would expect prices to rise over the next 6 months. After 6 months it gets tricky as there are so many factors that will come into play. It will be interesting to see how it all plays out. I am looking forward to hearing everyone's input on these and other topics concerning Las Vegas.

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Phillip Dwyer
  • Henderson, NV
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Phillip Dwyer
  • Henderson, NV
Replied Jun 19 2013, 22:13

There are a lot of inputs for sure. I'll be watching to see how many nods turn to nts and then REO. In the short run prices should continue to rise from supply demand issues.

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Ace A.
  • Las Vegas, NV
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Ace A.
  • Las Vegas, NV
Replied Jun 19 2013, 23:36

Hi guys,

I too have been monitoring our market, I would agree with most things Robert says, Hedge Funds are leaving, but I don't see them selling right now, just less buying as the cap rate isn't there.

Inventory has increase very slightly.
I track single family homes in Vegas, not all of Clark County.
In March of 2013, EA, ER was hovering around was around 3000's
April was 3100's to 3300's
May was 3300's to 3500's
and Today is 3731.

One thing I found odd and maybe my data is off, but the NOD's that I got for June 5 to current is really low, much lower than previous months for this year. Single digit low.

2013-06-05 - 5
2013-06-06 - 8
2013-06-07 - 5
2013-06-10 - 1
2013-06-11 - 5

Also, I found this video kinda interesting...
http://video.foxbusiness.com/v/2431023704001/hedge-funds-dump-housing/

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Joe O
  • Investor
  • Las Vegas, NV
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Joe O
  • Investor
  • Las Vegas, NV
Replied Jun 19 2013, 23:43

Thanks for the numbers, Ace. Very interesting.

This Forbes article from last week says that because we fell so far, the gains thus we've seen are sustainable, and in fact says we're still undervalued:
http://www.forbes.com/sites/morganbrennan/2013/06/13/the-most-overvalued-and-undervalued-housing-markets-in-the-u-s/

Take it with a grain of salt, of course.

It's certainly interesting to watch, and a very hot market. I just closed on a flip (sale) that was under a month, close to close.

Housing everywhere will be interesting for the next few years depending on what the Fed does with interest rates and how the economy does.

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Ace A.
  • Las Vegas, NV
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Ace A.
  • Las Vegas, NV
Replied Jun 19 2013, 23:45

BTW, when I say Las Vegas, I forgot to mention, Henderson & Boulder City. For you local MLS pls, it's MLS Area 101- 702.

Yes, I take almost everything now a days with some salt. :)

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Phillip Dwyer
  • Henderson, NV
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Phillip Dwyer
  • Henderson, NV
Replied Jun 20 2013, 22:26

Some hedge funds may be leaving, but at least one is ramping up.

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Robert Adams
  • Real Estate Broker
  • Henderson, NV
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Robert Adams
  • Real Estate Broker
  • Henderson, NV
Replied Jun 26 2013, 15:01

Available listings are on the rise as Ace A. mentioned. I watched the video also Ace. it seems to match what I was thinking though. Hedge funds are still around but just switching markets.

Phillip Dwyer the hedge fund you are referring to what types of properties are they going after? with increased prices causing lower cap rates etc I am wondering what there formula is for buying properties in the current market? Are they banking on appreciation? or are they content will low cap rates? Do you know their exit strategy?

Joe O I read the forbes article and it is good to hear some optimistic statistics. "...When adjusted for inflation and compared to the market’s pre-bubble 1998 performance, Las Vegas home prices are — despite double-digit percent gains over the past year — still 20% below their pre-bubble healthy market norm....."

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Phillip Dwyer
  • Henderson, NV
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Phillip Dwyer
  • Henderson, NV
Replied Jun 26 2013, 16:44

I'm not sure there is one exit strategy. They're playing in the mid 200 to mid 300's, so the cap rates aren't awesome by any stretch.