Homes In Southern Nevada.com

New growth spurt to propel Real Estate Values?

2008-02-10T07:39:00.000-08:00

After a one-year hiatus, Nevada has regained the title of fastest-growing state in the nation, according to new Census Bureau state population estimates released today. Nevada returned to the top spot with a 2.9 percent growth rate that pushed the population to more than 2.56 million in the year ending July 1. Nevada held that title for 19 years in a row before being bumped off by Arizona last year. Arizona is the second-fastest-growing state according to the current estimate, with a population increase of 2.8 percent to 6.3 million.

University of Nevada, Las Vegas economist Keith Schwer expects the Silver State to stay at or near the top of the list for years to come, thanks in large part to a flurry of new resorts and expansions scheduled to open on the Strip starting in 2009. "That should be a big boost for jobs, and with jobs come population," said Schwer, who leads UNLV's Center for Business and Economic Research.

Much of the state's growth is driven by Clark County, which is home to more than 70 percent of Nevada residents. Schwer and other demographic experts think the county's population surged past the 2 million mark sometime in the past few months. Schwer said the growth rate shows the confidence people have in Nevada's economy, but it does not necessarily translate to a higher quality of life for residents here. "Just getting bigger is kind of like sitting around the table after Christmas dinner. You're getting bigger, but you might not feel well," he said. "Getting bigger doesn't mean you're better off."

The Census Bureau estimated the total U.S. population at 301.6 million last July 1. Besides Nevada and Arizona, other Western states that made the top 10 list for fastest growth were Utah and Idaho, ranked third and fourth. In the Southeast, Georgia was fifth nationally, North Carolina was sixth, and South Carolina was 10th. Texas, meanwhile, had the seventh-fastest growth by percentage and was tops numerically, having drawn about 500,000 new residents.
California remains the nation's most populous state with about 37 million people. It attracted about 300,000 new residents, second to Texas numerically, but 25th fastest by rate of growth, the same ranking as last year. By comparison, Nevada's 2.9 percent growth rate translated to slightly less than 73,000 new residents.

Elsewhere, Louisiana appears to be rebounding from the devastation of Hurricane Katrina, gaining 50,000 residents in the year ending July 1. After the storm hit in August 2005, the Census Bureau estimated the state lost 250,000 residents. Despite the most recent gain, the state is far from returning to its pre-Katrina population level of 4.5 million.

The bureau's estimate is reached by measuring births, deaths and migration into and out of each of the 50 states, the District of Columbia and Puerto Rico. In Louisiana, the Census Bureau estimated a net increase of people moving into the state of 29,000, accounting for more than half of the jump. "That's a pretty big number," said Greg Harper, a demographer with the bureau.
Only two states lost population. Michigan's population dipped by three-tenths of a percent and Rhode Island saw a decrease of four-tenths of a percent. Ohio's growth was nearly flat. Florida, a state whose economy has been fueled largely by a steady stream of retirees crossing the border each year, gained in population but at a slower rate than usual. Florida was the 19th-fastest-growing state through July 2007 compared with the previous year when it ranked ninth.
Florida's population increased by 1.1 percent to 18.3 million as of July. The previous
year the rate of increase was 1.8 percent. "If there's one state that's a little surprising, I would say it's Florida," Harper said. The bureau will release county population breakdowns in the spring, which should give a clearer indication of how many residents have returned to the parishes in and around New Orleans.

Earlier this week, urban planning consultancy firm GCR & Associates estimated New Orleans' population at 300,000, about 65 percent of its pre-Hurricane Katrina size, which was around 455,000. GCR chief executive and New Orleans native Greg Rigamer said people have been
coming back to the city at a rate of 3,000 to 4,000 per month, which includes instate migration. Things are looking up, but the city still suffers from failing infrastructure, poor health care and educational services and a "horrific" criminal justice problem.

"Things are not all well in New Orleans," he said. "They are clearly getting better. It's no time to be popping the champagne corks." The Constitution requires the Census Bureau to count the population every 10 years. The results are used to allocate seats in the U.S. House of Representatives and electoral votes. This year's state population estimates are consistent with previous years that show high-growth states such as Texas probably will gain seats in Congress, while slowgrowth states such as Ohio probably will lose seats.

Whether Nevada's growth will be enough to bring it a fourth congressional seat after the 2010 Census remains to be seen, said Eric Herzik, political science professor for the University of Nevada, Reno. Herzik said it looks like Nevada, Arizona and Utah all might be eligible for additional House seats, but those will have to come at the expense of "somewhere back East
like Michigan and Pennsylvania."

To wrestle a seat away from one of those states, Nevada will have to be "not close but clearly eligible," Herzik said. Nevada gained its third seat, now occupied by Rep. Jon Porter, as a result of the 1990 census. "Last time we were eligible and then some. We had room to spare," Herzik said. "I think it's going to be that way again."

Fed takes action...spurs Real Estate investments?

2008-02-04T08:13:00.000-08:00

Acting aggressively to spur the U.S. economy, the Federal Reserve on January 30 reduced the federal funds rate (the rate at which banks borrow from one another) a half point from 3.5% to 3%. The cut followed a .75% cut on January 22, the largest one-day reduction in more than two decades.

The most recent Fed cut came on the same day the Commerce Department announced that the nation’s gross domestic product or GDP grew at an annual rate of 0.6% in the last quarter of 2007, while it expanded 2.2% over the whole year, the slowest pace in five years.

The economy didn’t get much help from consumers whose spending edged up just 0.2% in December, the weakest performance in six months, the Commerce Department said January 31.

Nor was December good for construction spending, which dropped 1.1%, the most in 15 months and twice as much as economists had been expecting, the Commerce Department said February 1.

Employment also showed weakness as U.S. employers cut 17,000 non-farm jobs in January, the first time since August 2003 that U.S. payrolls shrank, the Labor Department reported February 1. Analysts had forecast a gain of 80,000 jobs.

There were some economic bright spots. The Institute for Supply Management’s manufacturing index reentered positive territory with a reading of 50.7 in January, up from 48.4 in December. A reading above 50 indicates growth. Orders for durable goods, big-ticket items expected to last three or more years, also posted a larger-than-expected gain of 5.2% in December, the Commerce Department said January 29.

This week look for updates on factory orders on February 4.

2008-01-30T10:16:00.000-08:00

Hot Areas of Southern Nevada--

Zip Code # Sales Average $Sq. Ft. Ave. Sq. Ft.
89044 107 $393,969 $173.96 2277
89148 106 $301,494 $141.26 2153
89031 98 $255,464 $132.77 1971
89178 93 $340582 $139.62 2434
89139 82 $288,308 $148.52 1970
89141 81 $385,012 $155.04 2346

Top Sales Price
89117 54 $600,606 $193.07 2832

Lowest Sales Price
89801 9 $180,373 $134.97 1400

December Sales # 2.246 for an Average sales $307,151

Short Sale Investing...Is it for you?

2007-12-10T08:16:00.000-08:00

Short sale real estate investing is defined as purchasing a property from a lender for less than the balance owed on the mortgage. Many books and courses have been written about it, but can short sale real estate investing be simplified? It can!

There really are only two types of short sale real estate investing. First, when you purchase a property that a lender has foreclosed on and listed with a Realtor, you can offer less than the balance that was due on the foreclosure. This type of short sale real estate investing requires that you have a good relationship with the right Realtor, one who works with Short Sale listings and buyers.

When you find that agent, you’ll want to impress upon them you intend to follow through on all your offers. Then, do exactly what you say you will. That’s your ticket to the short sale real estate investing gravy train!

The second type of short sale real estate investing involves you negotiating directly with a motivated seller’s lender. Your agent needs to be determined in negotiating, first of all to reach the right person at the lender’s REO (Real Estate Owned) department, and then to get the price you want.

When housing prices in many parts of the country were booming a couple of years ago, there wasn’t much national attention given to short sales. But with the current sub-prime debacle and increasing mortgage delinquencies, many people are wondering if the short sale process is a way to avoid foreclosure.

Basically, the definition of the short sale process is when the lender of a property allows the property to be sold for less than the amount due on the mortgage loan.

The obvious benefit to the short sale process is it allows the seller to avoid the severe credit report damage associated with a foreclosure. A foreclosure can stay on your credit report for up to 10 years and can take an emotional and financial toll.

But the pitfalls of the short sale process should be considered as well. The I.R.S. may consider any debt forgiveness as taxable income, thus resulting in a tax liability. In addition, lenders can often pursue a borrower for the deficiency balance (the difference between the amount owed and the amount paid).

In some cases you may be able to avoid taxation if you can prove you are insolvent. But if insolvency is unsuccessful, and you are faced with a tax liability resulting from the deficiency amount, it may make more financial sense for you to let the lender foreclose.

The Short Sale Process

The short sale process can vary, but it will generally work as follows:
1) The lender is contacted to discuss the possibility of a short sale and to determine the lender’s process for completing the sale.

2) The seller issues a letter authorizing the release of personal information about the loan and the property to the buyer or escrow agency.

3) The lender will review a settlement statement, which will indicate the proposed selling price, remaining loan balances and itemize all expenses, including real estate commissions and other fees and expenses associated with the closing.

4) The seller will complete a "hardship letter," which will detail and explain all financial difficulties. Lenders will usually want to validate the seller’s financial situation by looking at bank statements, investment accounts, along with examining paystubs and other financial records.

5) The lender will then look to the broker to provide a price opinion by examining the condition of the house and the market value of comparable properties.

6) The lender will then want to scrutinize the purchase agreement to determine if all amounts are reasonable and the real estate commission is acceptable.

Because of the documentation required, the short sale process can be lengthy. But if done correctly, it can work well for all parties involved. The lender avoids the uncertainty of the foreclosure process, the seller avoids a foreclosure on his or her credit report (along with potential bankruptcy), and the buyer hopefully got a good deal on a property.

Investing in Short Sales

It's no secret the foreclosure market is at an all time high. It seems as though more and more properties continue to face home foreclosure. Because of this increased volume, opportunities for real estate investing in short sales are tremendous.

Short sales are becoming more and more popular when buying a foreclosure just because of the huge discounts they offer. Real estate investing has been taken to a new level as more and more investment opportunities pop up everywhere. Therefore, it's important to have the right knowledge when these real estate investment opportunities present themselves. That's where we come in. We have created a special foreclosure process to attract distressed sellers who must act fast!

The Foreclosure Investing Process

The foreclosure process contains 3 stages: Pre-foreclosure, foreclosure auction, and bank owned properties REO. Each stage in the foreclosure process can become very profitable when you understand each of the different stages and use creative real estate investing techniques. Our current inventory of over 300 homes with a short sale possibility makes your decision process easy.

Pre-Foreclosures with Short Sales

Investing in pre-foreclosures with short sales has never been better. With our marketing campaign focused toward the distressed homeowner, these Short Sale opportunities come to you. Short sales allow the real estate investor to discount the loan from the lender. You must know this technique if you want to be competitive in today's market.

Southern Nevada Market Conditions--November 2007

2007-11-07T05:06:00.000-08:00

SELLER CONTRIBUTIONS: This measure returns the propensity of the buyer to request—and the seller to provide—buyer points to expedite transaction closing.

November 2007

Single Family Residence--
% Sellers Contributing = 55%
Average Contribution = $9,155

Condo/Townhome--
% Sellers Contributing = 56%
Average Contribution = $7,799

October 2007

Single Family Residence--
% Sellers Contributing = 55%
Average Contribution = $10,322

Condo/Townhome--
% Sellers Contributing = 55%
Average Contribution = $5,542

The propensity for sellers to provide buyer support increased from October to November—but only slightly. The average contribution declined for SFR but increased for CONDO.

As a generalization, a good estimate of the seller’s expected contribution is
between 3.00 and 3.50% of the transaction value.

THIS YEAR VERSUS LAST YEAR--

Relative to last year in terms of transactions, the market is -38.6% behind YTD.
Given the market is entering the winter/holiday cycle, it would not be unreasonable to assume
the market will finish the year about -38% to -42% in back of 2006.

Closed Last Year = 27,749
Closed This Year = 17,039

Change = (10,710)
%Change = -38.6%

MARKET OVERVIEW—CHANGE FROM PREVIOUS MONTH

Based on the changes from the previous month, the market should be judged as continuing to move toward the buyer. The rate of movement toward the buyer is slowing but both Percent Selling (market efficiency) and ABSORB RATE (market speed) are still declining from month to month. This implies that price erosion will continue. Sellers who are motivated (willing to meet market price) should make every effort to identify and move to market price as soon as possible to maximize seller equity. This opinion is a virtual duplicate of the September and October opinions.

Supply (listed), which has been climbing at a steady and consistent pace, appears to have peaked and is now in a slow decline. Market peak, in terms of supply, peaked at about 29,300 units on or about September 14, 2007.

The market is moving toward the fall/winter cycle. This cycle usually manifests a reduced transactions count. The change in the direction of supply will most likely not influence the intensity of the negative nature of prices in the short run. It would not be unreasonable to assume the decline in the supply curve is most likely attributable to fall/winter cycle, as opposed to a change in trend. If this notion is true, the supply will return to market at the conclusion of the cycle.

SOUTHERN NEVADA MARKET BUY/SELL INDICATORS--

SUPPLY = Supply has peaked and is declining slowly (Slight tilt to Seller)
DEMAND = Continuing in moderate decline‐‐however stabilization is near (Strong Buyer)
FAILURES = SFR significant increase, CONDO steady (Strong Buyer)
PERCENT SELLING = Declined significantly for both types (Strong Buyer)
MONTHS SUPPLY = Significant increase for both types (Strong Buyer)
60 DAY ABSORB = Declining (market slowing) at about 1‐2 points per month (Extremely Strong Buyer)
PRICES = All price indicators off significantly‐‐SFR close below $290K (Extremely Strong Buyer)
SPECIAL COMMENT As an estimate, about 5‐7% of all closings are short sales
SPECIAL COMMENT1 Expect price declines to slow in the short run‐especially for CONDO

The reader should note the DISTRIBUTION SUPPLY/DEMAND table. The current ratio is 12.6 to 1—down from 13 to 1 in the previous month. However, higher-end properties face ratios of 46 to 1 (46 competitors for each property in escrow). This implies an exceptionally competitive high end market.

The reader should expect a continuation of the negative price trend with SFR moving slowly toward 280K. Expect CONDO to demonstrate more price stability and resiliency although fluctuations will occur on a month to month basis.

The strongest sub-market is South SFR. The weakest is South CONDO. As a general rule, the relative strength of markets can be deduced by the 60 DAY ABSORB RATE.