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Las Vegas

StockFreak said: "Just curious if anyone has invested in sin city real estate within the last 5 years? The market has been on fire, and im betting the farm that it will continue for the next 5 years. If not Vegas, what real estate markets are you in? Did you sell your home and rent because of fear of the bubble? Whats going on in your guys neck of the woods?"

StockFreak said: "Whoops, if an admin could cut and paste this in the R.E. forum. My apologies."

LanceJ said: "[QUOTE=StockFreak]Just curious if anyone has invested in sin city real estate within the last 5 years? The market has been on fire, and im betting the farm that it will continue for the next 5 years. [/QUOTE] That is no longer true. I work in the property management field and so following these markets is part of my job. The market in Las Vegas has been flat for the last 6 months. Check out the number of listings of homes for sale. It's doubled in the last 6 months. That means buyers at these price levels are drying up, but not just because of the price of homes, but also because of financing. A 30-year fixed loan is now about 5.5%, and the popular ARM loans are now at 5.96%. In otherwords, all those people who bought a house using an ARM loan, after their 3, 4, or 5 year locked in rate ends, will be bumped up from 4% to about 6%. For every 2% increase in the ARM, it's about, on average, a $200 increase in ones monthly payment. So what's the primary driver of these rates upward? Mr. Greenspan and his raising the prime lending rate (which is the opposite of what happened to cause the housing bubble, his lowering the prime rate). Mr. Greenspan and the Federal Reserve Board have made it clear that they plan to continue to raise rates "for the foreseable future", especially with the inflationary pressures caused from rising energy, Hurricana Katrina, and the war in Iraq, not to mention irresponsible spending sprees by government. As the Fed continues to raise rates, it will cause mortgage rates to continue to go up. As mortgage rates continue to go up, buyers of homes will dry up as financing becomes prohibitively expensive. Las Vegas has already been flat the last 6 months, and the average time it takes to sell a home, compared to a couple of years ago, has tripled. Supply is already starting to exceed demand. Real estate investments, or REIT were the place to be several years ago, but today, one would be arriving a little late to the party. Better to wait for the housing bubble to pop, or for homes to devaluate a little."

bobjitsu said: "I own a house and live here. The problem now is tons of houses were bought by Californian's to be used as rentals. They screwed us good, in the past 2 years I've gone as far as to threaten burning down the house next door to me when I called the owner in Laguna Beach. He and all the Cali "investors" have found plenty of section 8 losers to move into our once nice and safe neighborhoods. These jerkoff's are so poor they walk everywhere because they can't afford a car or to ride the bus. I do like the extremes in our temp though because electricity prices and natural gas prices have climbed so high they can't afford to cool the house they rent in summer or heat it in winter...so they suffer...GOOD! I laugh my ass off driving by in summer and seeing all the windows open in a house...110 and they sleep with the windows open...GO BACK TO THE GODDAMN GHETTO!!!!!!!!!!!!!!!"

LanceJ said: "Yeah, that's the same thing us Californian's say about other states. All these damn out of towners buying up all the property and forcing prices up.... I've e-mailed our Mayor here and asked why he doesn't penalize the "out of towners" in the form of higher taxes who come in to buy up the houses here only to "flip them" (sell them for 1 year or so later to make 20% or more profit). They don't care about the community, they can't stand Fresno California, and all they do is drive the prices ever higher, making it harder if not impossible for the citizens of Fresno who work and live here, to be able to afford housing. Our Mayor, Alan Autry (yeah Bubba on Heat of the Night) is a moron. Suffice to say, the Fed. reserve's anti-inflation stance made houses a very attractive investment, but rates are going up big time and before long, I think we'll see the housing bubble burst, probably when the 30 year fixed and the ARM rates exceed 7%... I think 7% or higher mortgage rates will be the needle that pops the bubble."

bobjitsu said: "[QUOTE=LanceJ]Yeah, that's the same thing us Californian's say about other states. All these damn out of towners buying up all the property and forcing prices up.... [/QUOTE] It's not people from other states buying Cali property Lance, it's illegal aliens. I sold my house in 1995 to a bunch of them, not one could speak English. Jump ship soon is my advice for anyone living there, Cali will experience 1989 all over again, very soon."

StockFreak said: "Ive been hearing some real estate pro's out here talk about a slow down in the market here in Vegas since Jan. But thats only in comparison to the previous years. I believe the market is once again gaining steam. I recently (July) sold my home in the Spring Valley area to the first couple that looked at it. Matter of fact i had not even put the home on the market yet, they were hoping the offer on my neighbor's home was going to fall thru (my neighbor raised the ask after recieving multiple bids). After shopping for a home for at least a month i can honestly say you are going to be dissapointed with whats out there for the prices. Anything under 400k is pretty much garbage. Within a month of buying my current home the same floor plan with less upgrades went on the market for 50k more. Also downtown condo's on the market for 500k are now selling for 600k 1 year later. More popular high rises like Panarama are selling for almost 25% more than originally offered 1 year ago. So far anecdotle evidence is in my favor and i believe with the employment opportunities section in the classifieds growing at a rapid clip and with DMV #'s estimating 6k people moving here every month, i think now is as good a time as any to get in on this market."

LanceJ said: "[QUOTE=bobjitsu]It's not people from other states buying Cali property Lance, it's illegal aliens. I sold my house in 1995 to a bunch of them, not one could speak English. Jump ship soon is my advice for anyone living there, Cali will experience 1989 all over again, very soon.[/QUOTE] Come on, I work for one of the largest property management companies in the Central Valley in California. We manage commercial properties, multi-family apartments, single family homes, and condo associations. I can tell you that it's not "illegal aliens" who drove the price up...LOL...maybe those bastards drove up health care costs here, but the price of homes, no. It's "out of towners" that have no intention on living here that drove up the prices. They invest in homes like we do stocks. They hold the house, sometimes leaving it empty, for a couple of years, then sell it to someone else for a 20% profit, who then does the same thing. Most of these people are fluent speaking English white guys with a lot of money who do this with 3 homes or more. When the stock market crashed, they pulled their money out of the stock market, and put it in real estate. The funny thing is, these same people are going to get creamed when the real estate market reverses direction. They are going to be holding a vacant house, unable to find a buyer, and the house is going to depreciate in value at the same time. But these guys are smart. They'll probably do something like max out the home equity in the house, then just not make their next few payments so the bank repos the property. Stick the bank with the depreciating home and let them deal with it."

LanceJ said: "[QUOTE=StockFreak]Ive been hearing some real estate pro's out here talk about a slow down in the market here in Vegas since Jan. But thats only in comparison to the previous years.[/QUOTE] Yes. We all follow the Vegas market because the Vegas market is sort of like the Russell 2000 index, it's a bell weather market for the rest of the country as the theory goes: Vegas will be the first housing market to depreciate, followed by the rest of the country. Vegas continuing? I think you have about 1% increase to go in mortgage rates to over 7% before buyers begin to dry up, supply exceeds demand, and the housing market reverses direction. In the case of ARMs, you have a huge amount of people who bought a home with an ARM locked in rate of around 4% for the first 3 - 5 years at the height of the market. Within the next year or two, those people are going to have their locked rate period end, and their morgage rate will go from 4% to the current 6% overnight... that's on average a $200 per month increase in their payment and, at the same time, their house depreciating in value. Keep in mind also that many of these same people used their home equity line to purchase cars and many other goods and services effectively increasing their debt. Most people who bought using an ARM loan, are people strapped tight on cash, and it was the lower ARM rate that enabled them to get a house in the first place. That is ARMs were very attractive for people who couldn't afford the higher 30-year fixed rate. These are the very people who are going to be most susceptible to their ARM locked in rate period ending, and the 2% overnight rate hike. The only question I have is not if this is going to happen, but how much will the housing market reverse direction? Depreciation in real estate is extremely rare. However, with the rising cost of energy and inflation hitting about the same time that ARMs locked in rate period ends, it is possible. For now.... we all keep an eye on Vegas..."

bobjitsu said: "[QUOTE=LanceJ]Come on, I work for one of the largest property management companies in the Central Valley in California. We manage commercial properties, multi-family apartments, single family homes, and condo associations. I can tell you that it's not "illegal aliens" who drove the price up...LOL...maybe those bastards drove up health care costs here, but the price of homes, no. [/QUOTE] I guess the whole white people being the minority now thing is being ignored. Hispanics are the majority in L.A. and I believe Cali, they are living somewhere. This is the rule with Cali real estate, tack this up at your office.... "There are only so many lawns that need mowing." Like I said, 1989 is gonna come back and probably be worse than the original. I still remember reading in the paper about the dopes up in Palos Verdes committing suicide over buying a 3 million dollar house and it devalued 50% practically overnight. Mexicans have decimated Cali, are working on Phoenix, Vegas and parts of Texas. Edit to add, Mexican isn't a bad word, it isn't racist, they are Mexican's from Mexico. The way things are now calling them illegal aliens is racist....but that is what they are, they are not immigrants."

StockFreak said: "[QUOTE=LanceJ]Yes. We all follow the Vegas market because the Vegas market is sort of like the Russell 2000 index, it's a bell weather market for the rest of the country as the theory goes: Vegas will be the first housing market to depreciate, followed by the rest of the country. QUOTE] Bell weather market? I think the Vegas market is the most ISOLATED from a general downturn. The lack of regulation in mortgages in my opinion is not going to hamper the simple supply and demand scenario playing out here. People are able to move here from anywhere get a job within a week making 35-50k annually with no experience being a waitor, bartender, the damn bathroom attendants pull in a decent wage. People will always come here to spend money, and if you doubt the Vegas marketing team, check out what they did at fashion week in NYC. We have better theatres than broadway, better shopping than Rodeo drive, matter of fact everything is better in Vegas. :eek: Oh and no hurricanes earthquakes, or terrorists is a plus."

HappyHarry said: "Anytime housing prices rise as much as they have, you have to wonder: [B]where are people getting all this extra money from?[/B] Real wages haven't increased at all in years! The homeowner's are only as good as their borrowing power. Prices keep rising for so long...and then the bubble bursts. That said, I bet StockFreak can probably still make some money if he moves fast though."

StockFreak said: "The rich are getting richer and the poor are getting squeezed harry, I think in the end its balancing out, :rolleyes: . I am making more money than i ever have and so are all my associates. The economy out here is its own animal, there is no shortage of people wanting to invest in Vegas, the pending sale list at my brokers office proves that to me every week. Of course in any healthy market it has to slow down, and am ready for that slow down, even a reversal. That would just put the market in the buyers favor, and i would be one of them. I just cant see that happening when i have to stand in a line of a 100 or more just to grab a new home. I found out today that the Residences at MGM are going for almost a million on a decent floor (10th and higher). I took the tour when they opened at about 600k and got a client in to one. Either way, i know theres two sides to this story im just not convinced."

bobjitsu said: "StockFreak, any chance if a downturn comes in value that the people who bought to rent for investments will sell and move on to screw up another city?"

StockFreak said: "Of course there is bob, lol. Where are they going to go tho? I presume most of the other markets are over inflated as well, with out the growth Vegas has. Just curious bob but do you listen to KDWN?"

bobjitsu said: "[QUOTE=StockFreak] Just curious bob but do you listen to KDWN?[/QUOTE] Nope, just 840 in the morning and 1140 in the late morning and afternoon. Why?"

StockFreak said: "The immigration issue comes up a lot and i was curious. 1140 huh, Thats Lykas right? You should check out 970 at noon, good stock chat."

bobjitsu said: "[QUOTE=StockFreak]The immigration issue comes up a lot and i was curious. 1140 huh, Thats Lykas right? You should check out 970 at noon, good stock chat.[/QUOTE] I don't listen that late, I hate Lykas. I like Phil Hendrie, I used to listen to Stern but can't stand that pinko anymore."

HappyHarry said: "Las Vegas is too damn hot for most people. You're lucky the immigrants want to move in....LOL"

StockFreak said: "Bob, the best programing in my opinion is Hart and Ken 720am from 5am-830 and there is something very addictive about the Savage Nation. Dry heat tho Harry! Perfect for the pool."

HappyHarry said: "You aren't kidding. I do love that desert air. It's so clean compared to my Cleveland industrial air it's not even funny."

StockFreak said: "Good article in the WSJ property report about Vegas this morning. I picked up another piece of LV downtown at the "Juhl" highrise project. Tiny and expensive lol, but the building out there is like wildfire, new projects every month. Giant multi million square foot complexes. Somebody has to work at these places and im hoping they want to live close to their jobs."

HappyHarry said: "Yeah buddy! Looks like you can't miss right now. Glad to hear it's working out for you."

LanceJ said: "Las Vegas turned out to be an accurate indicator this time as well in the housing slow down. 6 months ago when the Vegas market started to slow down, the Fresno market was still going strong. Today, it's a different story. For the first time last week the local news here reported that there was more sellers than buyers for the first time in 4 years. They also reported that the average time a house on the market sold went from 29 days to 50 days. House prices here have just begun to drop slightly. As I'm not a house owner, I'm hoping for a fall of around 40% to occur within the next 3 years. I don't have time to explain the reasons behind why I think houses can fall as much as 40% from their current levels and what role ARMs have in all this. But once again, Vegas tends to lead the housing market. So when wondering where the housing market is headed, keep an eye on Vegas. In the scenario I outlined above, I would expect the housing market in Vegas to continue to soften up quite a bit as the Fed rate rises. The tipping point to where the house of cards begins to fall (Fannie Mae, etc.) is when mortgage rates for 15 and 30 year fixed, and ARMs are all above 7%. As the rate heads higher to 8% I would expect the media to be on board that the housing bubble has burst. As the rate heads to 9%, I expect the market to be flooded with homes from default payments, bankruptcies, etc. As the rate heads to 10%, I expect the realization to set in that too many homes were built during this last housing boom as demand was artifically inflated by low interest rates and that the excess supply begins to push homes down 20% or more. Above 10%, we have a complete collapse as we will be in a bear market recession, brought on in part by high energy prices pushing inflation up and giving the Fed no other choice but to raise the Fed rate so high that home mortgages cross over 10%. I expect Congress at this time to step in and bail out Fannie Mae and other home mortgage lenders and to pass new laws restricting the number of ARM loans or at least raising qualifications. Dark cloud scenario for the housing industry? You bet. And when it happens and we hit bottom, I'll step in and buy my first home. :D Yeah I know, existing home owners hate me.... I know, I know... but it's your fault if you bought a house within the last 2 years at these inflated prices, you have only yourself to blame. Expect continued depreciation of homes across the nation."

StockFreak said: "Lol,unfortunately i think your going to be holding your breath for longer than you already have. In the last two years my associates and I have cashed in millions of dollars in real estate appreciation as [I]owners[/I]. I would be hating myself had i not bought. Easiest example are the Panaroma Towers here in town, check how much those were going for two years ago :rolleyes: Real estate markets are local, once the investor understands that, they may be able to make some savy real estate plays, untill then theyll be on the sidelines hoping for a bubble. All this b.s. in the media about a bubble and people are still buying. That should give you a good idea about where this market is psychologically (Ill give you hint, its got horns). Is there a slowdown? Yes. Are there too many unqualified buyers? Yes. Is the fed going to ruin housing when are economy has become so dependant on it? Probably not. Do I enjoy Cheney-esque dialogue? Of course."