Land in Nevada with Water Rights

Will There Be Water?

Independence Realty

435-862-5951

702-733-9337

Is Las Vegas Running out of Water? Southern Nevada Water Authority’s Water Problem

May 26, 2010

I attended the Southern Nevada (CCIM) Certified Commercial Investment Managers Chapter monthly meeting at the Rio in Las Vegas. I went for one reason, the title and speaker, “How You May Be Impacted by Nevada’s Water Supply” presented by Pat Mulroy. Mrs. Mulroy is the general manager of Southern Nevada Water Authority.

As a long time real estate professional who specializes in agricultural land with water rights in Nevada, I talk with Nevada’s farmers and ranchers’ everyday; I was shocked by the introduction. The lady introducing Mrs. Mulroy said about her, among other things,  how wonderful she is, how hard she works, how powerful she is, and then she said, “and something I’ll bet none of you know about her, She HATES COWS”.
 

Mrs. Mulroy took the stage and went on to say “anything that dumb and big has to be dangerous” referring to cattle. The crowd of men and women dressed in suits and ties laughed. I on the other hand, in my jeans, boots and a new western shirt, immediately took umbrage, and thought to myself, I wonder if this lady realizes where the food in the grocery store comes from.

Her presentation seemed to me to be based on the fear factor. She talked about snow pack in Colorado this past winter being at 67% of normal. She talked about continuing drought conditions.

She explained that Lake Mead is running an annual deficit of approximately 2.7 million acre feet this year. There are 8.2 million acre feet coming in and 10.9 million acre feet going out.

Mrs. Mulroy explained the Lake level measurements with future projections.

But first let me give you a little history, from 1939 to 2003 Lake Mead averaged 1173 foot elevation, the high water or maximum point for Lake Mead is 1229.

Today it stands at about 1094. Since the canyon narrows as it descends, the water level drops faster and faster as it is over drafted, so expect the drop to accelerate.

Mrs. Mulroy explained that at the 1088 foot elevation level they could lose the upper intake for the water supply to Boulder City and 40% of Las Vegas’s supply. The authority's Intake No.1 would be forced to shut down at elevation 1,050.

At 1050 Hoover Dam stops generating power. At 1000 Vegas loses the lower intake that would literally cut off 90% of the water supply to Las Vegas and all of the water supply to Boulder City.

Work has begun on a so called third straw.  Michael Johnson, Virgin Valley Water District hydrologist, told me years ago the aquifer that runs under our Mesquite Valley travels under Lake Mead, could they tap into it?

Pat Mulroy said “SNWA will be utilizing all the water rights it owns or controls in the Virgin River, which runs through Mesquite/Bunkerville and the Muddy River in Moapa/Overton".

Southern Nevada Water Authority uses approximately 9.5 million acre feet per year, once Lake Mead goes below 1025 there is only 4 to 5 million acre feet of water left in the reservoir. She said "the pipeline will start construction in 2012 if the lake goes below 1075, period!"

She said “If I have to set up a cot in Harry Reid’s office, I will stay until I get a permanent chair”.  I did not know Harry passed out water rights!  That job belongs to the State Engineer.

She said “the hyperbole (hyper exaggerations) coming from rural Nevadan’s about their water table concerns was childish.” She went on to say “the rural Nevada farmers and ranchers are being Pig Headed.” 

She referenced a recent USGS Basin and Range study that she claims shows plenty of extra water. I have not yet located any completed study; http://ut.water.usgs.gov/projects/greatbasin/

What makes you think they will stop in White Pine County?

Finally for the record, she said “there are plenty of un-appropriated water rights in Nevada and the Snake Basin is next in her sights.”

She appears to me to be dead set on tapping into and draining rural East Central and Northern Nevada, Western Utah and Southern Idaho’s aquifers to supply Las Vegas.
They did it to Pahrump, Nevada

When I questioned her, she lashed out at me, “Do you have a better idea?”

She may be powerful, but based on her comments, attitude and general demeanor; clearly she is not as sharp as you would expect! 

That does not mean you should underestimate her ability or determination to get this done.

You can learn more about me by searching “Irrigated Nevada farm and ranch land with water rights for sale” on any search engine.

Chris W. Miller

Independence Realty

435-862-5951

Land in Nevada

Nevada Ranch Properties

Lincoln County Land Market

Nevada Water Rights

Mesquite Nevada Real Estate Market

Are you unsure if all the hype about water and food shortages in the future is real or just?

The science is mounting and it is not any one single cause. You may not buy into global warming or maybe you do and just do not believe it is man caused. I tend toward the latter personally.

As mentioned the science is mounting in favor of serious problems in coming decades for mankind’s ability to provide adequate fresh drinking water and food to the increasing billions of us on the planet.

In previous blogs I have referenced National Geographic’s April 2010 Special Issue, “Water Our Thirsty World”. They clearly believe we have a problem already in many parts of the world including parts of the United States.
 

A new study called, the gravity recovery and climate experiment, or GRACE shows the following. 

“Combined, California's Sacramento and San Joaquin drainage basins have shed more than 30 cubic kilometers of water since late 2003, said Jay Famiglietti, UCI Earth system science professor and director of the UC Center for Hydrologic Modeling. A cubic kilometer is about 264.2 billion gallons, enough to fill 400,000 Olympic-size pools. The bulk of the loss occurred in the state's agricultural Central Valley. The Central Valley depends on irrigation from both groundwater wells and diverted surface water. 

"GRACE data reveal groundwater in these basins is being pumped for irrigation at rates that are not sustainable if current trends continue," Famiglietti said. "This is leading to declining water tables, water shortages, decreasing crop sizes and continued land subsidence. The findings have major implications for the U.S. economy, as California's Central Valley is home to one-sixth of all U.S. irrigated land and the state leads the nation in agricultural production and exports." 

The loss is nearly enough to fill Lake Mead, America’s largest reservoir and Las Vegas Nevada’s primary water source. The Central Valley’s major source of water comes from the Sierra Nevada Mountain Range. 

Source: University of California - Irvine (2009, December 15). California's troubled waters: Satellite-based findings reveal significant groundwater loss in Central Valley. ScienceDaily. Retrieved May 23, 2010, from http://www.sciencedaily.com­ /releases/2009/12/091214152022.htm 

Next week I will be attending a luncheon in Las Vegas;

How You May be Impacted by Nevada’s Water Supply

Presentation by: Pat Mulroy

General Manager, Southern Nevada Water Authority 

I will report what she has to say about our water in Nevada.

Chris W. Miller

Land in Nevada

Independence Realty

Las Vegas, NV 89123

435-862-5951

702-733-9337

Mesquite Market

chris@mesquitemarket.com

Lincoln County Land Market

Nevada Ranch Properties

Irrigated Nevada Farm and Cattle Ranch Land with Water Rights For Sale.

In an effort to improve exposure and reach a broader for the Nevada irrigated farm and ranch land with water rights business market Chris W. Miller is proud to announce his new association with

Independence Realty

Reno and Las Vegas Real Estate and Western Nevada Properties
Leo Dupre, Broker-Owner, Independence Realty 775-691-8888
1005 Terminal Way, Suite 155 Reno, NV 89502
460 W. Main St #101, Fernley, NV 89408
8275 S. Eastern Ave. #200 Las Vegas, NV 89123
Serving Las Vegas, Reno-Sparks, Virginia City and Fernley

My new association with these offices will give the many Nevada farm and ranch land properties with water rights listed with me greater exposure to the entire state of Nevada irrigated farm and ranch land with water rights market. Property listings will soon be available on the Las Vegas and Northern Nevada MLS systems.

To discuss buying or selling Irrigated Nevada farm and ranch land with water rights call Chris today.

Chris W. Miller

Land in Nevada

Independence Realty

Las Vegas, NV 89123

435-862-5951

702-733-9337

Mesquite Market

chris@mesquitemarket.com

Lincoln County Land Market

Nevada Ranch Properties

Let’s start with the easy pieces, the edge pieces, the positive aspects of the current housing market.

Home sales are up in Mesquite, Nevada from 15 closings in January 2009 to 39 in January 2010, huge increase in closings. Price per square foot dropped from an average of $120 in January 2009 to $100 per square foot in January 2010. This was stimulated by Federal tax dollars in the form of tax buyer credits that would be your money!

Single family new home building permits are up in Mesquite from 1 in January 2009 to 22 in January 2010. That adds to the competitiveness of the market, the supply side.

Trying to keep it positive here, mortgage interest rates are still near historic lows.

The Home Builders Index of confidence rose 2 points to 17. A score of 50 or more on the index indicates that more builders view conditions as favorable rather than unfavorable.

Access Research & Consulting Inc. estimates that the number of mortgage brokerage firms is down from a peak of 53,000 in 2004 to less than 15,000; this may be a good thing.

Now we can start into the middle of the picture, the harder pieces of the puzzle.

Realty Trac reported January 2010 foreclosures were above 300,000 for the eleventh straight month, and up 15% from January last year. US Home ownership is back down to levels not seen since 2000.

Private mortgage insurance companies are dropping like moths flying into the flames of a blazing fire. Short sales and foreclosures are literally wiping them out.

Mortgage underwriting standards are getting tighter everyday, shrinking the pool of eligible qualified potential home buyers. Even FHA has made it tougher to qualify for a mortgage. This piece is part of the demand side.

By most industry estimates, there are eight million delinquent mortgages in the US today and only a very small percent of the mortgage modifications are actually working. The re-default rate continues to climb. Only 66,000 are considered permanent of 900,000 of those who are enrolled in trial modification programs.

3.4 million Homes in the Treasury Department’s Making Home Ownership Affordable (HAMP) are currently 60 days or more delinquent.

There are a half trillion dollars of mortgages still out there that will reset or adjust over the next twenty four months. Many of these homeowners are not prepared for the higher cost of housing headed their way.

The picture is coming together, but there are still some pieces missing.

The shadow inventory is out there in various forms, and the number of homes sitting vacant is at a historic high. Many are owned by institutions, others are owned by individuals, all are waiting for the market to improve. Then there are the sellers who would like to sell but can not or will not sell at current prices. At some point they will have to liquidate this inventory.

We should all hope Fannie Mae, Freddie Mac, and the others will slowly ease this inventory into the market. Some industry experts believe it could take as long as three years for the market to absorb this shadow inventory of homes.

If they dump a wave or waves of distressed property into the market, it will drive down prices further and create a huge opportunity for those in a position to capitalize on the low prices.

The Federal Reserve’s 1.25 trillion dollar fund set up to buy mortgage backed securities is nearly spent. Without the support of this emergency fund, the secondary mortgage money market is bound to drive rates higher for consumers.

The effect of higher interest rates is to make housing less affordable and reduce the buyer pool, again reducing the demand side.

What the real estate market needs is jobs and time. Jobs will help people stay in the homes they currently own. Jobs will slow foreclosures, help mortgage modifications work, and create new demand.

Time will heal credit, time will clear inventory, and in time the market will find balance again.

Now step back and look close, with all the pieces of the puzzle in place. Where do you think the market will go over the next six months, twelve months, and twenty four months?

Remember Mesquite, Nevada is a prime retirement community with a very bright future offering a low tax structure, excellent weather with nearly constant sunshine, premiere golf courses, excellent outdoor opportunities, gaming and all located within an hour’s drive of Las Vegas.

Chris W. Miller

Independence Realty

Land in Nevada

435-862-5951

Mesquite Market

chris@mesquitemarket.com

Lincoln County Land Market

Nevada Ranch Properties

Home Buyers sitting on the Fence in The Mesquite Nevada Real Estate Market Should Know This

Currently FHA has been playing a large role in home mortgage lending. The relatively easy to qualify for and low down payment requirements have made FHA loans attractive to many of today’s home buyers, FHA Does not actually Loan money to home buyers, but insures lenders against default on loans that meet FHA criteria.

Some rules changes are on the way to FHA guidelines. They will include higher upfront insurance premium, current buyers pay 1.75% of the loan amount that will go to 2.25%, that will be the second increase in two years.

Mesquite Nevada real estate home buyers who qualify still have USDA loans, at least until the 2010 census. If we are above 20,000 in population that option will be gone.

The current value of the FHA's reserves to cover losses has fallen to $3.6 billion, less than.05% of the roughly $680 billion in loans outstanding, down from 3% a year earlier.

In addition the agency may ask for buyers to pay annual premiums. FHA runs a risk of coming up short and may be forced to go to congress to ask for a bail out of its own for the first time in history.

Today only a 3.5% down payment is required on FHA loans. There has been much criticism, that FHA is only prolonging the current crisis, and even creating a new bubble of buyers unable to afford the home they are buying.

There is speculation FHA will increase the required down payment, this idea is supported by many housing analysts. As well reducing the amount sellers can contribute to the costs of sale for the buyer from 6% to 3%.

That seller’s contribution has undoubtedly lead to inflated pricing to give the seller the funds to pay the buyers costs. This artificial inflating of prices to allow people to buy homes by paying their down payments and closing costs sounds the reverse of what the market needs right now.

Chris W. Miller has 33 years in the real estate industry, was trained and worked as a financial advisor for Morgan Stanley Dean Witter and currently specializes in Irrigated Nevada land  with water rights with Independence Realty Nevada. He can be reached at 435-862-5951 or chris@mesquitemarket.com

  

Chris W. Miller

Independence Realty

Land in Nevada

435-862-5951

Mesquite Market

chris@mesquitemarket.com

Lincoln County Land Market

Nevada Ranch Properties

Mesquite Market Quarterly

Forth Quarter 2009

By Chris W. Miller ABR, CRS, GRI

A lender recently told me, 80% of the buyers he is pre-qualifying can not get a loan.

I have a nagging fear that our real estate markets as we have known them throughout the last 70 years will not be restored until the Federation gets back to its foundation. The nation was built on principles of individual liberty, individual responsibility, and free enterprise. As a democracy we elect officials to represent us, uphold the Constitution, and follow the laws, today they appear to be doing few of these things.

The majority of the money currently being loaned as mortgages is government backed, through FHA, HUD, USDA, VA and in the secondary markets of Fannie Mae, Freddie Mac, Ginnie Mae. Yes a conventional bank or mortgage broker may take your loan application but virtually all the loans are being sold into these government agencies. The private secondary mortgage market has become nearly non existent at current rates. Fannie and Freddie were not designed to be slush funds for bad decisions or funded long term by tax dollars. In order for the Mortgage companies to continue to lend at current rates the US government may have to EXPLICITLY guarantee these agency (MBS) Mortgage backed securities cash flow investments.

The government regulations have gone from “making homes affordable” think: Bush administration, ACORN, and the repeal of Glass-Steagall, although it goes back much further in history. To today’s consumer protection laws, making it much more difficult to get a loan. When the government exits the mortgage business, rates will go up.

The federal reserve has spent 1.122 trillion of the 1.25 trillion given it to buy (MBS), the program is scheduled to end March 2010, along with the “Home Buyers Tax Credits”. The federal reserve can keep rates low for the banks to make huge profits on short rates but it really has limited control of the ten year and longer end of the bond markets which effect mortgage rates more directly.

2.8 million Foreclosures hit the market in 2009. Fitch ratings have warned that in the next twenty four months another one half trillion dollars in prime, Alt-A, interest only, option arms, and sub prime mortgages will adjust or recast and many of these are middle and upper middle class families. Creating unsustainable payment shock for millions more Americans and millions more foreclosures. Distress in real estate tends to lead to more distress, and finding a bottom may involve unemployment numbers.

RealtyTrac says “No End in Sight”.

This is ALL about unsustainable debt, consumer debt, state level debt, federal level debt, and out of control spending.

Back to the start, the Federation is governed by laws; states are required to balance budgets, consumers are required to make mortgage payments or suffer the consequences. Our elected officials can not save home values, they can not keep people living in more home than they can afford, they can not put people in more home than they can afford and expect them to make it, and they can not modify people into a home they could never afford in the first place. They are throwing our good money after trillions in bad money. They, the elected officials, must be held accountable for bringing our children’s nation to the brink of bankruptcy.

When the dust finally settles and the unrealized losses are all on the books, the wealth effect in dollars lost will be staggering beyond any numbers currently being discussed, the effects will last generations. These losses will show up in places like pension funds of all kinds, 401k plans, other retirement accounts, sovereign wealth funds, and many of the world’s governments. States with budget deficits and falling tax revenues will be asked to cover more and more of the federal debt burden.

None of this is good for the current home price market today or tomorrow. The median price home sold in Mesquite during the forth quarter 2009 dropped to $192,063 or $118 per square foot.  The median priced condo sold for $75,000 or $70 per square foot, and the median priced town home sold for $108,000 or $78 per square foot.

Ego, greed and monetary policy have taken us down the wrong path. Government intervention and efforts to manipulate the market created the environment for the crisis to occur; now it threatens to prolong and deepen the damage. We as a country must quit spending money we do not have, buying homes we can not afford, and curb government spending programs. And until we as a nation get back to a free and open market, principles of individual liberty, individual responsibility, and free enterprise,   I believe recovery is unlikely.

Real recovery can only begin with honesty at every level, at home, in business, and most importantly at the government level. In my humble opinion we have little chance of any real sustainable financial recovery until we accept these facts and principles and then, act on them.

Expect real estate values to continue to drop more in 2010 due to the massive amount of distressed inventory of properties sitting out there and coming to the market.

Chris W. Miller has 33 years in the real estate industry, was trained and worked as a financial advisor for Morgan Stanley Dean Witter and currently specializes in Irrigated Nevada land  with water rights with Independence Realty in Nevada. He can be reached at 435-862-5951 or chris@mesquitemarket.com    

Chris W. Miller

Independence Realty

Land in Nevada

435-862-5951

Mesquite Market

chris@mesquitemarket.com

Lincoln County Land Market

Nevada Ranch Properties