Las Vegas Real Estate

Interestingly, national pending home sales numbers are down --> http://abcnews.go.com/Business/Economy/wireStory?id=5330669

While our sales numbers in Las Vegas are up ---> http://lasvegasrealestate4u.com/2008/07/10/las-vegas-home-sa…

Put two and two together with the last answer. - Thu Jul 24 2008, 07:43

Ryan,

Your hypothetical example below is precisely what happened in Vegas. (And I use Vegas because we've already gone through this.)

BUT let's go over your example first ---

The buyer who bought Sellers A home for $100K has gone down in value according to your sample C/S index--- because when it was bought, the median home value according to your C/S example index was $200K.

BUT... you stated that buyers were not going to buy anything for more then $100K -- and buyers are what determine market value. If the C/S Index is stating the median values are $200K but buyers are not going to budge over $100K -- that's where you get all of the homes sitting on the market and the decline in sales numbers. (In other words... who cares what the C/S index says if buyers are not buying?)

So.. Buyer A got a $100K home where the C/S index was saying median values were $200K but buyers were saying market values were only $100K -- pretty easy to get a loan there and even refinance it and cash out some equity :) ...

As I tell sellers, you can put whatever price you want to on a home but if you really want it sold, you need to put a price that will motivate a buyer to put an offer in.

Back to your sample -- PRECISELY what happend in Vegas and other poster child markets for bad real estate news in '07.

Median prices are saying one value, but buyers are saying something else and buyers are what you need to get out if you are a seller -- not the C/S Index value.

C/S Indexes are important to see what already happened, but mean nothing if nobody is buying TODAY and inventory is rising. For a period here in Las Vegas, we had to do AT A VERY MINIMUM -- monthly market reports on homes we had listed for sale because prices were dropping so fast in '07. (And we had to fight with the reports of median home values saying one thing.... but our CURRENT market indicators were saying something else.)

There was a point where sales over a month old were considered OLD and irrelevent so C/S Index values coming out on numbers three months later certainly meant nothing.

For us...The biggest drops took place around November of '07 when the banks just seemed to all decide to dump their increasing inventory. Just like buyers B through E in your example.

(NOW -- keep in mind that in '06 was the period in Las Vegas where we hit a period where sales started to really slow down, prices remained somewhat stable but inventory started building up. I consider this the warning signs of things to happen since we saw it first hand.)

HOWEVER -- What this created was buyers that are NOW willing to buy.

Homes in Las Vegas are NOW SELLING at the lower prices and sales for June 2008 had a 50% increase over sales in June of 2007. (Obvious signs of our market stabilizing from the free fall.)

http://lasvegasrealestate4u.com/2008/07/10/las-vegas-home-sa…

So, back to Buyer A in your example -- in comparison to the C/S Index for the area you gave, the value did go down. BUT... let's say Buyer A got a loan for $100,000 and now the values have dropped to $100K. Buyer A is just fine since they are not under. Yes.. Buyer A is not so happy since his equity on paper dropped but at least he does not owe more then the home is worth.

NOW... let's say other buyers (Before Buyer A bought Sellers A home) who had bought before buyers made the market values $100K purchased at $200K and have loans at $200K... Their values are now $100K because that's all buyers are going to pay and they now owe $100K more then the homes are worth.

SO... we have to ask ourselves in your other answer concerning the new bill how giving taxpayers money to lenders is going to matter --- Are they going to refinance $200K mortgages for homes worth $100K?? I don't think so.... (But.. yes it is important to keep Freddie Mac and Fannie Mae from going under.)

IMO...Regular lenders are going to take that money and use it to offset their losses. The only way that the $100K homes are going to get back to the $200K homes anytime soon is if lenders go back to their loose lending standards and give loans to anybody who fills out an application and that's not going to happen anytime soon.

(Well... maybe it will since lenders know that some of their "preferred clients" will help them out.)

Regardless, the C/S Index only tells me what I knew three months ago. Pendings and Contingents give me better information on what it takes to make buyers pull the trigger when prices are falling.

Declines in sales, higher inventory and an ever increasing avg. Days on Market number tells me that prices will eventually go down one way or another. - Thu Jul 24 2008, 07:34

Hey Ryan,

Concerning the bill, quotes from the article and some quick thoughts:

"Republicans said they would not support a bill that puts taxpayer money at risk while potentially bailing out irresponsible borrowers and greedy lenders."

Who wins? Lenders.

"Representative Barney Frank, Democrat of Massachusetts and a primary author of the legislation, said troubled homeowners might get relief within days of Mr. Bush signing the bill, because lenders have long known details of the legislation and could move quickly to help borrowers refinance. “Many of these institutions know this is coming,” he said. “I hope they will be able to take advantage of it right away.”

Not sure how refinancing a home worth $270,000 with a $500,000 mortgage is going to help out or any lender that would do it???

Of course, it might keep home prices up in other areas of the country that have not yet seen the dramatic price drops like we've seen in Las Vegas. - Thu Jul 24 2008, 05:34

Hey Richard,

C/S data is a comparison of last year to this -- we already know prices in Las Vegas imploded in comparison to last year. My optimism is based on the fact that people are buying homes in Las Vegas again and sales in comparison to last year have increased significantly which brings us back to simple economics concerning supply and demand.

When sales are down and inventory increases, prices are going to go down. That was 2007 for Las Vegas and now that prices have gone down, buyer activity has increased which certainly shows signs of hope in comparison to having no sales or even knowing the price that it will take to attract buyers. I can honestly say that now, I can figure out the price for a Las Vegas home that will generate buyer activity instead of it just sitting around with no showings. (Granted, not every home seller is happy with that price but I don't control the market, I work with it.)

I know, my last answer sounds quite optimistic and borderline salesy (ok... completely salesy) but just for the record, I don't prospect on Trulia or even spend too much time here. I just came across this thread several months ago and enjoyed participating and reading all of the answers and chirping in every now and then.

For the record, Trulia has given me a pretty good understanding of what consumers are looking for so it has been educational (and sometimes very entertaining) so it has been worth my time in that respect.

But... I'm not going to spend time on this site telling everybody it's a great time to buy because there is so much inventory and interest rates are low... because I think you are well aware that I have a pretty good understanding of what high inventory rates mean.

Yes... the marketing gurus for Vegas are hard at work due to the economics of the entire country offering some stellar deals right now --- but as I learned back in UNLV during some of my casino marketing classes, Las Vegas knows how to market and will adapt instead of sitting around and waiting to see what happens.

$49 rooms at Bellagio, Free rooms at MGM and I know people in other parts of the country getting offers for free rooms at Wynn even though they've never even been there. Sounds like a good time to visit Vegas to me :) - Mon Jul 21 2008, 16:40

Funny how everything was quiet after my last answer for six days which was by far the longest amount of time for this question since it started. Anyways...

For us, sales in June were 50% over June of 2008. http://lasvegasrealestate4u.com/2008/07/10/las-vegas-home-sa…

It's been an extremely rough and difficult time for everybody in Las Vegas for the past year but I can honestly say it has bottomed out. And... if you've followed my answers or myhttp:// www.LasVegasRealEstate4u.com blog, you know I never make the "It's always a Great time to buy real estate" statements. In fact, you can read this post --> http://lasvegasrealestate4u.com/2007/12/17/home-sales-to-reb… and you'll probably get a pretty good idea of what I think about real estate agents that do make these statements.

Anyways -- I've been looking at inventory and sales reports from other areas of the country that never had "high appreciation" rates and see some of the exact same things I saw in Las Vegas in 2006 before the implosion. Some of my banking contacts are Certainly very concerned.

Florida, Arizona, Las Vegas and California have been the poster childs for bad news concerning real estate for the past year or two --- but --- now that prices have imploded in these areas --- where do you think the most desirable real estate is?

For us -- we've been slammed with people from all over the country and world for Las Vegas real estate.

But... hey -- it's Vegas baby with millions of international visitors a year and we are certainly not normal town USA. For Normal Town USA, you better check out the Pickens Plan and get an understanding of what $700 Billion leaving the country every year means to you.

Personally, I have not been so positive on Las Vegas Real Estate in over two years. If you are a qualified buyer and want references to my long time savvy investors who will vouch that I told them to back off of Las Vegas real estate back in 2004, contact me.

There is no greater reference then Savvy Invesotors who ALMOST got caught up in the nonsense.

Enjoy the ride..... - Thu Jul 17 2008, 20:15

I agree with you Bayou,

There has been some very thoughtful answers from both sides supported by relevant links... But anybody who says it's a great time to buy because it's cheaper then it was two years ago seems to not understand how prices got to the point they did or don't understand the impact all of the new home inventory has.

To top it all off, I came across this interview with an insider that worked for a New Las Vegas home builder (who says it is a nationally known new home builder but they won't mention the name) and posted the video interview on my blog. ---> http://lasvegasrealestate4u.com/2008/07/11/did-a-new-las-veg…

If this was a nationally known builder, I'm wondering if or how many other markets this was taking place in. Pay attention to the part about taking the incentives addendum out of the folders before submitting them to the lender. I do know the lender they are talking about that was forced to shut it's doors but not the builder... yet... - Fri Jul 11 2008, 11:20

Carlin,

Are you sure it's not this thread? I've seen some crazy answers here since following it over a month ago and now only come here for entertainment purposes only! - Fri Jul 11 2008, 08:55

This is still going??? You've created a monster Ryan :)

Save your money and buy land in the red areas where this is taking shape ---> www.PickensPlan.com.

($700 Billion is leaving the country every year for oil alone?? Nuts and tough to get an economy back on track when that much money is leaving....)

You've got to have land to put those things on... If they don't own it, they have to lease it.

Besides that... all of the good jobs created are going to create a demand for real estate... and it's pretty cheap in these areas for now.

(Just thought I would throw in something new for discussion to keep this going... :)......BTW... Vegas sales are back -- we took our beating already and it appears it has now stabilized. Multiple offers coming in on the good deals and they are getting harder and harder to find.... Maybe Buyers saw my comments 1400 answers ago that it was possible to find homes cheaper to buy then rent in Vegas.

Rent vs. Buy Calculations... bottom line. That's when we finally saw signs of the bottom.... - Wed Jul 9 2008, 00:46

Zack,

I certainly was not suggesting that you were complaining that access to MLS data was a big conspiracy --- just the services that want complete access to it.

Their arguments for open access say one thing but their intentions for it are really for something else such as advertising sites, etc.. Because without listings, a real estate website is just a real estate website.

Redfin has access to the MLS for the markets they are in so the argument in place by other services (cough, cough..) that it's closed is a false one. You just have to go through the process already in place to get to it which means getting licensed, etc.. (And real estate license laws vary by state and not controlled by the NAR.) Help U Sell, Assist to Sell, etc.. they have access to the MLS in Nevada and it's never been denied to them.

When I owned a Real Estate Brokerage I had to go through (and Pay) for numerous items AND meet all of the requirements by the State AND the various REALTOR boards. It's a complex process but companies can do it if they want to take the time and pay the money and follow all of the rules involved.

The main issues of the settlement were on issues that never became mandatory to begin with (they were going to be national guidelines that were put on hold when everything between the NAR and DOJ started in 2005) even though some boards did have the rule in place such as MLSNI. (Forced registration to view all the properties or what we call VOW and Brokerages that could decide what listings that could be viewed openly without registration.)

Las Vegas is wide open and full searches offered by agents and brokerages do not require registration. The good sites in Chicago via MLSNI do require registration to see ALL of the listings available. I don't know if that's going to change or not with the new settlement and that's what it really was... a settlement. It does not even effect Las Vegas anyways because it's been wide open since IDX sites became available.

BUT... the MLS does not report on information on For Sale By Owners, New Homes, etc.. etc.. so there is a lot of information just not available to make a determination of exactly when it is a good time to buy, sell or wait. MLS info. is not the end all solution for reports.. it's just one of the sources.

As I've seen from following all of the comments on this question since I got involved about a 1,000 answers ago, there is data ALL over the place depending on what you are using for your criteria depending on who you ask and some of it's been really good info to read.

It's kind of like the NAR and DOJ settlement... depends on who you ask to see what side won. From what I see, it was all irrelevant anyways and only depends on which MLS you belong to. For Chicago it matters, for Las Vegas, it does not.

I'm a little more in tune to different MLS systems since over the years, I've belonged to three different MLS systems with all different rules, criteria, etc.. There are different MLS providers (technical platforms) etc.. etc.. and different reports we can run. Some have been very easy to run whatever I want (Las Vegas) and some have been incredibly impossible.

Regardless, the whole point of the matter is opinions on future values based on criteria that has already happened are just that.. opinions. What's going on with gas prices (wait for the corn prices to hit ... think Ethanol with the problems currently going on that we don't even know the exact damages/cost yet), jobs being lost... etc... effect different markets in differant ways.

As it's been highlighted, World famous economists can't even come up with a definitive answer or get it right due to issues going on and they certainly have access to all of the data they can get their hands on.

By the way... don't blame NAR if it's too easy to get a real estate license... blame your state licensing boards because they are the ones that actually determine what the licensing requirements for a particular state are. Some are certainly easier then others.

By the way, My wife is a Real Estate Trainer and has taught for various companies so I'm a little more in tune to what companies teach what and why. Part of the hazard of this is that I've been with multipe franchises. Some teach the quick buck and some teach the long term business. I personally prefer the long term aspect since as many people are now realizing, trust and educated advice works in any type of market.

Sorry so long.. but I have been following this entire thread and generally just comment when I see something that should have further clarification that I can add to or clear up. Technically, I do sell real estate but I have worked for developers also and studies/reports for them do not include JUST MLS info. It's a combination of many things before a piece of dirt is even considered for development.

Trust me, my contacts within various banks, builders and developers are looking for the magic answer also. - Wed Jun 11 2008, 17:42

Zack,

Just to clarify the access to MLS data comments.. Get a real estate license, pay the REALTOR fees and you get access to the data. The Recent DOJ and NAR settlement go more in line with the argument of companies wanting open access to all of the listing data so they can post listings all over their websites and collect advertising fees, etc..

I belong to Two MLS's -- one that is wide open and shows all of the homes on our IDX feeds such as my site athttp:// www.PremierLasVegasRealEstate.com. MLSNI in Chicago forces registration to see all of the homes available for sale. (Non registration searches do not show all of the homes available for sale if the Listing Brokerage does not want them shown on an open IDX system.)

That was the real argument concerning the NAR and DOJ because the NAR wanted that system (forced registration and listing brokers having the ability to choose where it can be listed) put in place nationwide. That rule was put on hold since the dispute started in 2005.

Access to MLS data -- As suggested by several people contributing to this post -- it's not hard to get a real estate license.

If you want specific information from the MLS, just ask a REALTOR and the criteria you want. Suggestions that make it sound like the data is a big secret more often then not are created by services that would just love to have all of the data on their national sites (such as this one, Zillow, etc..) so they can get more visitors and charge more for advertising.

Obviously, arguments and open discussions concerning the data sound much better when it's made to sound like it's a big conspiracy that's harming the public then saying we want access to it so we can make money.

Once again.. finding a REALTOR that will provide you with all of the criteria of the information you want from the MLS should be pretty easy to find. - Wed Jun 11 2008, 13:55

Hello Nicholas,

You might want to start your search for a REALTOR athttp:// www.CRS.com -- Some Quick Facts:

*Less then 5% of all real estate agents can say they are a CRS
*Average time in the Business according to their survey = 16 Years

There is only one designation that is harder IMO and that's CCIM but that's more geared towards Commercial Real Estate.

Look for one that has taken CRS 204 (Building Wealth in Residential Real Estate) and CRS 205 -- they should be able to properly calculate Rent vs. Buy Calculations, etc.. Something I was harping on about 1,000 posts ago.

CRS 202 teaches Negotiating Tactics to cover your complaint about your previous agent having poor negotiating skills.

Course Descriptions here --> http://www.crs.com/Education/173

You can do a search for one here --> http://www.crs.com/Find_A_CRS

Not an end all solution but it's certainly a place to start. There are only about 50,000 REALTORS that have earned the CRS designation and it's the first place we look when relocating clients out of Las Vegas to other areas.

Carl,

Here is an article I came across concerning speculators --> http://www.edmondsun.com/business/local_story_158212633.html…

"We are experiencing a demand shock coming from a new category of participants in the commodities futures markets: Institutional investors. Specifically, these are corporate and government pension funds, sovereign wealth funds, university endowments and other institutional investors."

Sovereign Wealth Funds have been making a name for themselves lately.

Also,

Check your corn futures because it's not looking good this year. I think 25% of the bumper crop of corn grown last year was used for Ethanol -- which has created the debate of the higher food costs since Corn is also used in feed, etc. (Of course, higher oil costs make it more expensive to grow corn)..

Maybe a reason for the speculation going on and the recent jumps because news on the AG and commodity reports are not looking good right now and are not going to get any better with the Midwest getting drenched.

http://ap.google.com/article/ALeqM5jND4r3B-VBZu2Ogg2_yzjYnPI…

"It was corn's highest settlement price ever. Prices have jumped nearly 40 percent since the start of the year."

Once again, do some research on Sovereign Wealth Funds and figure out where they have gotten all of their money and what they are doing with it. It's pretty interesting...

Here is a good interview (bottom of the article) with T. Boone that covers most of the topics such as ANWR recently discussed --> http://www.spectator.org/dsp_article.asp?art_id=13223

"T. BOONE PICKENS: According to the crude oil report, as of today [March 12] we have imported crude oil at the cost for $1.4 billion for the week. Multiply 52 weeks times $1.4 billion [a day]. You'll get right at $600 billion a year you're paying for imported crude oil. We can't keep doing that. It's the greatest transfer of wealth ever recorded in the history of the world."

But... at least he's investing a couple of billion for better solutions --> http://www.cnn.com/2008/US/05/19/pickens.qa/

Tough to get an economy back on track when more then $600 Billion is going out of the country every year for oil alone. - Sun Jun 8 2008, 01:14

With the latest answers to this thread and the articles provided by Ryan and Manny,

Does anybody have $22 Million to lend for a new Master Planned Community in Southern Nevada??... :) - Thu Jun 5 2008, 15:44

The_Bayou,

That was a really good article you mentioned from the Times --> http://www.nytimes.com/2008/05/28/business/28leonhardt.html?hp

About a 1,000 answers ago I had mentioned running the rent vs. buy calculations to make a rational decision.

And, your reference to the index mentioned since it's been tracked since 1987 and the relationship to rents -- that's information that I'm looking for also and playing around with some of our local zips to figure that out.

I can't help you for Boston but that's the information that I would think is the most beneficial for when it truly will be a good time to buy -- instead of the generic "interest rates are low and there is plenty of inventory" answer.

We are certainly coming across properties where it makes complete sense -- not everything but there are cases.

Anyways...Nice article and the chart was enlightening. I certainly suggest everybody read it and look at the chart for your area. Of course, you need to find somebody that can break it down even more within your area / zip code / community and it should certainly help making the right decision instead of going off of all the headlines being brought up in the news. (Geez... I've probably heard the latest C/S numbers on the news at least 30 times in the past day...)

I guess they did not read my blog post back in April --> http://lasvegasrealestate4u.com/2008/04/29/broken-record-hea…
otherwise they could be saving some air time or sell more commercials... or interview somebody such as that Times writer. - Wed May 28 2008, 08:22

What I find really interesting about the tables is the March 2008 level index which shows the median % increases for the twenty markets since January of 2000.. (The median prices in comparison to last year are no surprise for those of us that track our local markets.)

The composite 20 shows a median % increase of 72.16% since January 2000.

-- Chicago is at 50.35%
-- Las Vegas is at 69.31%
-- Washington is at 102.34%... (Where did that come from???)

Only one city, Detroit has had a decline in Median home prices since January of 2000.

Interesting.... Especially when you go to this link -->

http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_H…

and follow the index for your desired market all the way back to January of 1987. For example, looking at Las Vegas it was a nice and steady (normal) increase until November of 2003 and then you can follow the ticks increase dramatically going from an index of 139.16 to a peak of 234.78 in August of 2006 and now dropping back down to 169.31 for March of 2008. (Translation -- Median home prices for Las Vegas went up:

39.16% from November of 2003 from January of 2000,
134.78% from August of 2006 in comparison to January of 2000
69.31% in March of 2008 from January of 2000.

Hmmm... interesting and IMO, evaluating those numbers are the real value. Especially for those of us who have been involved in real estate pre - 2000.

On another note, You would think that with the headlines being blasted on the news with the latest release of the C/S Index, that it was breaking news but it's not....

So, here is some more breaking news... the C/S Index is also going to be lower for April and May of 2008 in comparison to April and May of 2007 for Las Vegas.

http://lasvegasrealestate4u.com/2008/04/29/broken-record-hea…

Good... we now got that breaking news over with.... :) - Tue May 27 2008, 11:30

Ryan,

Nice article.. I don't agree with it 100% but I do agree with the ability of having retail and entertainment (restaurants, etc...) venues within walking distance. We have a couple of developers in Las Vegas that have caught on to this trend (not just building strip malls but actual vibrant village center areas) .... one reason why I like Chicago so much are the Suburban Villages one can find such as in the North Shore Villages with vibrant downtown areas. Highland Park, The Glen, Lake Forest... etc... Naperville also has a fantastic downtown area, St. Charles is getting there and even Lake Zurich is attempting to get into the action.

Being close enough to walk to these areas from your home is really, really nice... Thanks for the read... - Fri May 23 2008, 03:10

Carl,

-----------Quotes--------

Foreclosure prices are no less than what will make the bank whole or close to it.

Notice that virtually all foreclosures need work and are sold "as is" for the buyer to fix them up. They may also come with liens that the seller cannotor will not clear,leaving the buyer to deal with it.

--------------End Quote----------

Not entirely True in our area and in others. I've come across foreclosures never even lived in (brand new) and far below what the mortgage amount was. Since Las Vegas (among a couple of other places) seems to be ground zero, let's do a brief overview of what happened.

Market slows down dramatically. Foreclosures start appearing, inventory builds up, foreclosure numbers start going up ---- banks drop the prices to find the "hit" mark. (The price it takes to sell them.)

For us, it seemed like November when all of a sudden, the banks just said get them off of the books and dropped the prices with another reduction in the first week of January. (These are the time periods when I noticed significant price drops.)

I've been tracking the amount of Bank Owned homes on our MLS since March of 2007 and have provided some reports such as this --> http://lasvegasrealestate4u.com/2008/02/15/bank-owned-las-ve…

Quote from Carl -----------

Banks would go broke if they did that.

End Quote ----------------------

Precisely why the Fed has gotten involved and lowered interest rates, why FHA limits have been increased, and why the govt. got involved in the Bear Stearns Bailout. Not for the consumer, but to help keep the system from collapsing.

Prices did not drop overnight -- it was a process that took several months and it all started when sales slowed down and houses were sitting on the market not selling.

Quote----------------

They may also come with liens that the seller cannotor will not clear,leaving the buyer to deal with it.

End Quote-----------------------------

Entirely not true in Nevada when working with somebody that has experience with Foreclosures and the process in our area. We have state laws that still give us a due dilligence period --- "As-Is" simply means the bank cannot vouch for the condition of a home (or the future condition) since they obviously never lived in it -- but you can still do home inspections and even ask for repairs in a properly written contract.

Certainly do not mean to pick on you but your statements were generalized and foreclosure laws vary state by state.

Quote ----------

Banks do not want to own houses nor make a profit selling them.

End Quote -------------------

You are certainly right about that. For any market where sales percentages have been dramatically reduced and the foreclosures start piling up, expect the price drops to come next. The banks will drop the price to get the non performing assets off of the books because empty houses sitting there cost the bank money in more ways then one.

Sales have certainly picked up in our area ---> http://www.lvrj.com/business/18721109.html

Quote from the Las Vegas Review Journal ----------

For the first time since September 2005, sales of single-family homes in Las Vegas rose from the same month of the previous year

---------- End Quote--------

That statement right there tells you just how long it took to get where we are today. (As for the rest of the article, you can form your own opinions about prices, etc...the only reason why I am referencing this article is because of the fact it states that sales have increased.)

The key part to the story is the fact that sales increased for the first time on a YTD basis for the first time since September of 2005. As I've referenced before, the C/S Index is going to continue to show price declines for several months in Las Vegas and that's because the price drops took place in November of 2007 and January of 2008.... I don't need this report to show you that prices are less today then what they were a year ago.

So... the prices have been dropped to where they need to be to sell... and as we know, if homes are not selling, the prices need to be reduced. That's why Foreclosures have an impact on home values -- Banks are not going to sit on homes for 6+ months waiting around and will eventually take a loss.

Apply the concepts of inventory, % of sales and foreclosures coming available to any market. If inventory has gone up, sales percentages are down and foreclosure start to pile up, expect price drops to come next.

It all creates a domino effect --- precisely why you see the Govt. now getting involved to try to head it off since it's spreading outside of the "areas that had the high appreciation rates".

For us, sales slowed down at the end of 2005 and all of the headlines you get to read in the national media about the price drops in Las Vegas (and other areas) are all because of something that started long ago. - Sun May 11 2008, 12:01

Trulia Roger,

Thanks for pointing that out and it certainly changes the perspective when you look at it that way... but the dates are all out of order so when the hot topic hits and is discussed it's kind of hard to follow that way.

This question is going to go for another 1,000+ anwers..... What's the record? - Thu May 8 2008, 13:17

I think it's safe to say from following this thread for the past two weeks that there are some obvious flaws in the way Trulia has set this up -- unless they are only interested in running up the hit numbers.

It would be really nice if the person asking the question could select the best answers (or the highest rated answers) and keep them handy in a sidebar for reference because the thoughtful answers with good references have been buried. I certaily can't blame anybody for rehashing the same answers that have already been discussed.

Anyways -- it has been entertaining to follow. Nice job by Realtyexecpro on finding the seeking alpha post concerning the WSJ article.

I'm also quite intrigued concerning the WSJ article after reviewing this --> http://www.secinfo.com/d14D5a.tjth.htm

Too busy to really dig into it but it but I do see some things on the first page that show an interest with the authors hedge fund firm in housing related stocks and as we know, the WSJ has generally always been perceived as a good source for unbiased information.

Anyways -- I thought of this post and dug it up ---> http://sadbastards.wordpress.com/2008/03/27/mainstream-media…

with what we read in the mainstream media and it is a good reminder that many of the mainstream sources are set up for advertising revenue. - Thu May 8 2008, 13:02

Wall Street Journal article ---> http://online.wsj.com/article/SB121003604494869449.html

Interestingly, written by a managing partner in a hedge fund firm and it is an opinion but it does have good information and it does point out that much of what we are seeing today actually started a couple of years ago.

Real estate as pointed out several times is not a market that quickly corrects... it takes time... - Wed May 7 2008, 20:54

Realtyexec,

The rental index market is something we keep a very close eye on in our areas of specialty. We are seeing an increase in available properties for lease from investors picking up properties on the cheap and available for rent less then apartments when comparing apples to apples.. $ per square foot, zip code, amenities, etc.. etc..

One particular site I like to use for apartment rental prices in a particular zip code is ---> http://www.everyaptmapped.com/ -- (no registration and collecting users information like all of the other rental sites trying to collect referral fees.)

From what I've seen in zip codes we track, they are pretty much right on from actually stopping in and verifying from the actual offices in areas we keep a close eye on.

Marcus and Millichap provides extensive reports on rental markets with trends of the local economy and here is their 2007 report ---> http://www.marcusmillichap.com/Research/reports/NARR/AptResR…

My contact with a local M&M executive has provided more extensive research on current Las Vegas information so I suggest you find one in your area and build a relationship with. (My contact specializes in selling apartment buildings, I have clients that can buy them.) They have very extensive reports specific to the local economy.

Interestingly, I'm now coming across individual units in Las Vegas that are less to purchase then the door cost for multi-family units.

TransparentRE.com (Pat) just released this info. in your neck of the woods --> http://transparentre.com/2008/05/05/193-san-francisco-comple…

The commercial guys in the Multi-family business (and the people involved in buying and selling these) are much savvier when it comes to real estate so IMO, these deals are important to follow in your local markets. From some of the latest reports in our markets, the occupancy % for apartments are running around 92 to 94% occupied.

Once again, I am coming across individual condominium units that are less to rent then apartments in the surrounding areas and are actually nicer so tough to say how long this is going to continue. Especially since we are taking out a couple of former renters and putting them into condos that are cheaper for them to buy then it is for them to continue renting in the same area.

So... the good news in the bad news is that people that could not have bought anything with traditional financing is that they can now buy which I particularly find more satisfying then working with speculators looking to make a quick buck in an industry that was never really intended for instant gratification.

Synthia touched on a little bit about demographics that I brought up long ago... concerning Baby boomers, Gen X and Gen Y (echo boomers are a % within Gen Y). Apply the age groups and numbers and apply it. Both of the buyers mentioned above are Gen Y and first time home buyers.

According to http://en.wikipedia.org/wiki/Generation_Y, Gen Y is over 70 million which puts it in line with the power of the Baby Boomers in terms of the influence this has as consumers... (Umm... anybody notice how all of the candidates are spending a lot more time on college campuses then in the past? Campaign managers are pros when it comes to demographics and certainly understand the importance of understanding this information....)

A lot of information but apply it to what is going on and maybe it will make sense. A good book (even though somewhat bizarre) that put everything together for me in terms of economics, history and the marketing classes I took in college is a book called "The Fourth Turning" --> http://www.fourthturning.com/ that I believe was written in the early 90's and has been pretty accurate in some concepts discussed. They have a series of books here --> http://lifecourse.com/ concerning the economic impacts of generations.

Apply all of the concepts and it all makes sense to what is going on in the "big picture" in terms of the economy and housing. All of these concepts put together are nothing that you are going to read in a trade magazine and get an answer for on a post --- as evidenced with the number of answers to this question.

As far as markets that did not have big appreciation swings... you might want to check some of the national new home sites and check out the inventory available for sale in these markets keeping in mind that many of these are just listing the floor plans available and not the total lots to build on which is a much bigger number.

That's an eye opener and as supplied earlier, research the new home permits that were issued (public information) that were issued between "03 and "06.

Long and winded I know, but it's a very complex issue that even award winning economists are having issues dealing with. Even the Kruger interview in Fortune Magazine supplied earlier missed some concepts going on such as inventory when commenting about home prices... - Wed May 7 2008, 13:17

An interview in Fortune Magazine with a Princeton Economist in the March Issue:

http://money.cnn.com/2008/03/14/news/economy/krugman_subprim…

Quote:

How far do you think home prices will fall?

My preferred metric is the ratio of home prices to rental rates. By that measure, average home prices nationally got way too high. We'll probably basically retrace all that. So that's about a 25% decline in overall home prices. Only a fraction of that's happened so far. Of course, it varies a lot. In places like Houston or Atlanta, where home prices have not risen much compared with underlying rents, the decline will be relatively small. In places like Miami or Los Angeles, you could be looking at 40% or 50% declines.

-------- End Quote

I've been mentioning the rental index since page 2 of this thread... and it can be done in Las Vegas with little to nothing down. (Obviously not on everything..)

Pre 2002, Rent vs. Buy calculations were expected to be known and we did them all the time --- for whatever reason, that became a lost art. There are plenty of bashers on here that can form their own opinions as to why...... But don't make generalized statements that it is not possible because you are incorrect. - Thu May 1 2008, 12:07

Something else to consider that has not been mentioned, If you want to buy but are worried that home values are going to continue going down, you may want to consider exploring Leases with the Option to Purchase.

Obviously not for everybody but they are something to consider... - Wed Apr 30 2008, 16:18

The herd mentality has been mentioned which is an important concept in value investing. You can get a taste of the concepts and philosophies of the great investors here --> http://www.buffettsecrets.com/mr-market.htm

Just a thought, but if you provide an opinion from something you read, please provide the link to the source for reference. Some of the best answers on here have provided some really good sources to information for everybody.

Keep in mind some other important developments taking place such as local governments raising taxes to cover the budget shortfalls created by the housing slump -->

http://seekingalpha.com/article/74641-higher-property-taxes-…

"Memphis Mayor Willie Herenton has proposed a 17% increase in the property-tax rate to close a budget gap…"

Ouch!

The City of Chicago recently raised their transfer tax to over $10.00 per $1,000 -->

http://windycityguide.blogspot.com/2008/01/fine-print-on-cta…

Taxes do have an effect on what people can afford in housing... Keep that in mind as a record number of a certain demographic (baby boomers) decide where they want to live on a fixed income...

(By the way, in reference to the VISA/MC answer... Unless something has changed with Visa/MC -- Visa and M/C collect transactional fees and are not actually lending money, they just provide the system to create the transaction. I could be wrong because I'm not following stocks at the current time but I was when Visa had their IPO.) - Wed Apr 30 2008, 08:49

Hmm... I remember coming across this ---> http://www.forbes.com/home/2008/04/17/debt-homeowner-cities-…

Debt obviously has a big impact on stability of a real estate market. While I found the report interesting, they do not use debt to equity percentages but it's still worth reading.

As far as future releases of the Case/Shiller index... for Las Vegas that's going to continue showing declines until November and that's because our big drop in asking prices took place at that time so the news stories of "price" declines are going to sound like a broken record for the next few months.

I can pull up the median sold prices for April and compare it to April of '07 and it's going to be a decline... I don't need to wait until the Case/Shiller index comes out in June to tell me that.

In other words, the Case/Shiller index is telling us what already happened... Predicting that prices are going to continue to decline based on data a couple of months ago and comparing it to what's available today does not take a PHD in economics....

My opinion, but Better predictors of where prices are GOING to go for individual markets would be reports on debt to equity ratios, percentages of home owners that owe more then the home is worth, etc..

Why is this important? Well read this --> http://seattletimes.nwsource.com/html/businesstechnology/200…

and pay particular attention to this paragraph:

"By then, lenders such as WaMu had shifted away from simply collecting interest on loans they held. Their new business model was to collect fees for making the loans and resell many of the mortgages on Wall Street, where investors snapped them up as mortgage-backed securities."

In other words, a shift took place in what was once a long term investment into instant gratification and we are now seeing what that created.

You've got to know why home prices went up (or remained stable) before you can speculate on where they are going to go.... - Tue Apr 29 2008, 09:28

If anybody can find me a loan where I can write off the interest or depreciate the asset, please let me know so I can invest it in the stock market.

Investing in real estate is beneficial due to the concepts of leverage... comparing it to the stock market does not tell the whole story.

As far as saying now is not a good time to invest in real estate, well that depends on what you consider an investment. If you are buying real estate solely based on predictions of appreciation -- technically that's called speculation.

If you can leverage rental property properly and want somebody to pay off your mortgage for the next several years -- well that's not a bad investment if done properly..

Yes... it does take work and you do have to have an understanding of what an investment is to begin with.

Just saying it's a bad time to invest in real estate right now is like saying it's a good time to invest in real estate when appreciation rates were going through the roof.

The buyers picking up properties in Las Vegas right now are much savvier then the "investors" buying Las Vegas real estate a couple of years ago and for the most part have an understanding of leverage, depreciation and cash flow. - Mon Apr 28 2008, 15:15

Richard,

Just to clarify something in your answer -- I don't know of many transactions where an individual agent collects 6%. - Mon Apr 28 2008, 08:16

Well... here is a new thread similar to this one -->

http://www.trulia.com/voices/Market_Conditions/what_is_your_…

There are actual prices, rents and tax information on this one for Glenview which is a desirable area in the "North Shore" suburbs of Chicago... can it break 270 answers? - Sat Apr 26 2008, 18:44

Trulia and or Ryan,

Is there anyway Ryan can add his last comment as an update to the original question so we can stop getting redundant answers? - Sat Apr 26 2008, 10:26

Nice graph Paul,

Do you have anything current to provide? - Sat Apr 26 2008, 07:18

Ryan,

Your question and following this thread and all of the answers for the past week have been trulia enlightening on mentalities from all sides and the cases provided.

When it comes to residential real estate, emotions are as important as trends on why people want to buy or not. If nobody buys, prices will not go up and will continue going down and that is certain.

Back when the market was red hot, emotions took over and drove prices higher then where they should have gone and it appears some of the checks that had previously been in place to control it, were not there.

http://seattletimes.nwsource.com/html/businesstechnology/200…

From what I remember when I followed the stock markets closely, After the dot com bust in March of 2000, there were trillions of dollars in cash sitting on the sidelines waiting to be invested somewhere. I think it's safe to say where a lot of it went.

Regardless, it took several years before trust went back into the stock market. Stocks that truly were a good buy were undervalued just because they were in the tech related category and were clumped together. I think it's safe to say that Trust for stock brokers and financial advisors were pretty low in 2000.

The same thing is happening right now as evidenced by some of the answers on this post including yours. Non REALTORS do not appear to have any trust in the National Association of REALTORS with their advertising campaigns which I understand why. I highlighted the reasons for this in this post I did back in December --> http://lasvegasrealestate4u.com/2007/12/17/home-sales-to-reb…

Mentalities are very important right now -- nobody wants to lose money and as long as we have the negative trends being reported, the hesitation to buy will continue. The recent poll in AOL Business showed that 59% of the respondents thought it was a good time to buy but 60% said they definitely will not buy in the next two years. --> http://lasvegasrealestate4u.com/2008/04/14/real-estate-menta…

In these uncertain times, I'm going to stick to the Rent vs. Buy calculations that any REALTOR with experience should be able to perform to come up with the definitive answer to buy or not. I can think of three potential transactions this year that we've gone through where it made complete sense to buy at asking price but the buyers did not buy simply because of what they read somewhere.

Somebody else ended up buying them. One of them was a $224,000 bank owned home in a guard gated golf course community in Las Vegas with a rental market value of $1,500 a month. Anybody who can run calculations should be able to determine that this particular purchase made complete financial sense and was cheaper then renting.

Unfortunately, nothing like this has come up since so this buyer missed out on a great opportunity to buy below market value --- all because they read somewhere that prices were going to keep going down and despite our advice, they put in a ridiculous offer that was easily outbid. ($100 more then the asking price.)

With current mentalities, overall prices probably will come down. But... the really good deals such as the one I mentioned above are out there and are going to get snapped up by investors that understand what a cash flow analysis is and these are going to be the same people that sell when the equity percentages make more sense to cash in and put the money somewhere else.

The areas of Chicago you've highlighted are desirable areas to live in and prices are based on emotions as much as anything. You've taken information from Trulia to show only 1 sale but Trulia does not have all of the listings and data that MLSNI (mulitple listing service of northern Illinois) has.

In other words, you need a REALTOR that specializes in these areas to help you out that can provide you with solid and complete data including the number of homes currently in contract. Homes currently in contract are a very good indicator of mentalities turning around and what the asking prices were that triggered the buy. (Price points to create a buy/sell.)

I've certainly learned a lot from following your answers along this thread and it basically falls into the line that you are part of generation Y that knows how to pull up trends from all over the internet.

In other words, you fall into the first wave of this generation that is going to be a very important segment for the real estate industry in the years to come.

REALTORS better understand this if they want to stay in business because the days of generic statements such as interest rates are low, inventory is high, etc.. will build no trust in the near future.

You, along with the next 70 million generation Y's coming up in the buying ranks know how to easily use the internet for research -- just make sure that you are using the right information to make your decision. - Sat Apr 26 2008, 04:41

New home permits nationally --> http://www.census.gov/const/www/C40/table1.html

You'll notice the big drops from '05.

Your state should have new home permits posted somewhere since permits have to be pulled before construction begins.

Building materials have also gone up. Vegas and Chicago have had an increase in thefts related to everyday building supplies such as copper, aluminum, metal, etc..

http://lasvegasrealestate4u.com/2008/04/22/interesting-story…

I don't think anybody is going to argue that costs for materials are going up.. - Fri Apr 25 2008, 08:41

I actually found the new Business Week article interesting --->

http://images.businessweek.com/ss/08/04/0418_housing/index_01.htm

For the mere fact they are using Asking Prices instead of Median sold prices. - Wed Apr 23 2008, 23:36

Hugh,

"Too bad you were not moving to Vegas" was in reference that if he was, I could give him specific reasons to buy in Las Vegas.

What I was suggesting is let's hear some specific reasons from Chicago real estate agents why Ryan should get off of the fence to buy in the Chicago area instead of the generic references to low interest rates and it's a buyers market...

No offense, but I suggest everybody go through and read all of the answers (I know it's long but there have been some great thoughts --- Pros and Cons --- for the past 4 days from people who have participated from the beginning).

In other words, the low interest rates, all real estate is local, blah, blah, blah has been stated 90 times already. (And if you read Ryan's comments along this post, you would know what he thought about the generic statements.)

As far as Las Vegas vs. Chicago -- well.. I can speak about that as well. As stated long ago, Chicago is a phenomenal city to live in... I am licensed there as well but I only know one sub market so I'm not on top of what is going on except that sales are really down in Chicago as well and foreclosures are skyrocketing in certain sub markets in Chicago also.

For Ryan's price range -- Well.. I could give a really good debate in comparing the two cities in what you could buy and where. Obviously, Chicago was the hands down winner two years ago but I would have to question that with today's prices in Las Vegas when you take in the whole picture such as taxes, cost of living, etc..

Sorry your experience in Las Vegas has not been pleasant... it's certainly not for everybody. - Wed Apr 23 2008, 09:11

Sadly, nobody from Chicago has given Ryan a really good reason to buy. Last time I checked, there were over 40,000 real estate agents in the Chicagoland area....

Too bad you were not moving to Las Vegas... - Tue Apr 22 2008, 22:53

Ryan,

Something tells me you've had your share of Philosophy studies...Anyways....

I found this blog post concerning the herd mentality very well written ---> http://www.luxurymortgageblog.com/2008/02/physcology-of-rece…

Apply the concepts to markets and you'll get an understanding of what creates buying and selling opportunites. Emotions play a big part when markets swing from one extreme to the other...

The trick is trying to figure out when it's gone too far and emotions have taken over from sensibility... Something that takes a lot of experience and education...

As you've pointed out, the days of "Interest Rates are Low" and you've got to buy now are over with... - Tue Apr 22 2008, 11:17

Ryan,

Your last comment and sentiment is nothing new. I touched on this subject back in December:

http://lasvegasrealestate4u.com/2007/12/17/home-sales-to-reb…

You'll find a lot of the same sentiment on ActiveRain and many of the actual REALTOR blogs out there. Probably why the Case Shiller Index studies get more attention then the NAR nowadays.

The tranparency in real estate is certainly changing. - Mon Apr 21 2008, 16:55

Chandler,

Asking prices and Market values are two entirely different things --- And...what somebody paid for a product means absolutely nothing in a current market evaluation.

I mentioned why sellers would sell below market value -- precisely why I suggest that somebody uses an area specialist that understands foreclosures and new home builder incentives.

As far as the rent vs. buy -- not true in Las Vegas. There are properties where it is cheaper to buy then rent -- and that's without even calculating the tax advantages.

Back to Asking Prices vs. Market Values.... I can ask for whatever price I want for my Google Stock that I paid $410 for... but if I want to sell it tomorrow morning when the markets open, the current market value suggests I'm going to get $539 if I want to put in a sell order.

Now, let's say it was trading at $350 the day I need to sell that same stock that I bought for $410... I'm only going to be able to sell it for $350 on that given day.... nobody looking to buy it at the current market value ($350) cares that I paid $410 for it.

I hate using stocks as examples because the liquidity option is SO much easier then Real Estate so let's add some zero's and pretend it's a home..

I paid $410,000 for a home and let's say it was a seller's market. Recent sales within a 3 mile radius suggest a market value of $539,000 and there is nothing else available for sale. I can probably push the price and ask $550,000 since everyody has been reading about how great the real estate market is and they need to get in now because prices are going up and interest rates are low... heck, I might even get multiple offers for it! (Sound silly? Ask any agent in Vegas when the market was hot how silly this reasoning was....)

In other words, you submit an offer for anything less then $539,000 and I'm just going to write a big "Rejected" on it and send it right back your way.

Now, let's say I changed my mind about selling it because real estate prices always go up :) and I'm going to wait it out for a year or two because heck...I read that appreciation rates were 20% last year. If I wait another year I'll be able to get over $650,000 for it. (It might sound silly but it was happening.)

Fast forward to today's Buyers market.... I have the same house I paid $410,000 for. It's a buyers market and $350,000 suggests today's Current market value according to the latest three sales within 3 miles of similar sized homes and there are 30 other properties available for sale.

But... ouch... a life changing event happens and I need to Sell ASAP. I don't have time to wait it out. Homes are sitting on the market forever, buyers are scarce and geez... everybody says prices are going down. So... I price it Below market value ($350,000) at $325,000 and offer incentives such as buying down the interest rate for a buyer, etc. etc..

A buyer comes along and offers me $315,000 and wants me to pay a point to lower their interest rate. I need to sell and move on so instead of writing rejected on the offer... I'm probably going to accept it so I can move on.

Sadly, I lost money on this deal but what I did not mention was that I found a killer 4 plex that's a bank repo being offered for $300,000 that's generating $2,600 a month in rent :). - Sun Apr 20 2008, 22:23

Chandler,

Good point about the generic interest rate answers. I was going to touch on this but my posts have been long enough.

Interest rates go up, buying power goes down. Qualifying someone for a loan is based on what they can afford on a monthly payment. Rates go up, what they can afford on a monthly payment goes down which is precisely why so many ARMs with teaser rates were used during the boom. (Creating an increase in prices.)

Put interest rates at 8% right now and I think it's safe to say that real estate prices would be lowered even further.

In other words, interest rates and real estate prices are relative. It's very easy to make the argument that real estate prices went up during the boom because interest rates were low and because of the availability of easy money.

The lax lending standards have been corrected from what I see. Yes... it's a lot harder to get a loan today then it was in '04 through '06 but I don't see it any harder today then it was in '00 or '01.

Interest rates can be used in negotiating strategies... We've got a new home builder out here in Vegas where their mortgage company is offering 30 year fixed motgages and some really low rates. (30 Year Jumbo at 4.95% for example) in addition to lower prices on standing inventory... pretty safe bet on the futures of those communities where buyers are taking advantage of it because it will equal stability.

In the current buyer's market, you can also negotiate the seller to buy down points on the interest rate. Try doing that two years ago with a new home builder in Las Vegas and they would have laughed at you.

Interest rates are just a piece of the puzzle.

A Buyers market means the buyer is in control in negotiating and basically means if you can't put together a (realistic) deal that makes you feel good, don't buy.

As far as short term goals that apply to Ryan's situation... if you can get a good deal at a great interest rate, who says you have to sell it if you move? Turn it into a rental property which brings up the earlier point I made about a Rent vs. Buy calculation. If it's cheaper to buy then it is to rent... then the property you buy can be turned into a rental property down the road if it's still a buyers market... and you can sell it when it's a sellers market down the road.

Chicago is a phenomenal city to live in with a very healthy economy compared to other cities in the Midwest and I don't see anything that's going to change that anytime soon... especially if they win the bid for the 2016 Olympics. (Lower those property taxes and the prices would go up IMO.) - Sun Apr 20 2008, 16:23

Ryan,

To answer your question about when Indices are reported -- the big one getting the most attention by the media nowadays is the S&P Case-Shiller Home Price Indices --> http://www2.standardandpoors.com/portal/site/sp/en/us/page.t…

---- "The S&P/Case-Shiller Home Price Indices are calculated monthly and published with a two month lag. New index levels are released at 9am Eastern Standard Time on the last Tuesday of every month."---

Instead of writing out a long post as to what it means, I posted a blog about it here in response to a buyer who read the March report in the newspaper ---> http://lasvegasrealestate4u.com/2008/04/06/prices-for-las-ve…

The same fundamentals can be applied to any real estate market.

If prices have remained stable but nothing is selling... well.. you make your own opinion on what's going to happen. Real estate prices in markets don't react on the same day (or even month) such as bad news (or good news) for a stock. It's a little easier to get out of the stock when you find out that the CEO has been using company money to fund $5 Million dollar birthday parties.... - Sun Apr 20 2008, 12:42

Hey Ryan,

There is an old saying with investors -- "You Make Your Money When You Buy" and that's true with real estate as well.

Basically it means buy smart to begin with and find something below market value which is certainly Very possible in a buyers market.

There are sellers out there that can't wait for the average market value at the average days on market and need to sell ASAP. It could be divorce, relocation or their payments being re-adjusted and they need to get out now and that means pricing their property appropriately.

New Home builders need to get rid of standing inventory and Banks have to get non-performing assets off of the books and they'll price accordingly. (Empty homes cost new home builders and banks more then it does for your average seller due to higher interest rates on construction loans and lost opportunity costs such as lending money to somebody who's going to pay their mortgage.)

These opportunities do not come along during a normal or sellers market.

You state that the average market value in the area of Chicago you are looking in is around $500,000. Find something that is $400,000... it's probably out there in the area of Chicago you are looking in and I would definitely look for an agent that understands new homes and foreclosures.

I don't think Chicago is as far along as re-adjusting prices as Las Vegas is (from conversations with Broker/Owners I know in the Suburbs of Chicago) but I think it's coming since they are now teaching their agents to handle short sales and foreclosures. Something that we handle on a daily basis in Las Vegas nowadays. (Over 4,000 short sales on the Las Vegas MLS right now.) I am licensed as a Broker in Illinois but I only know one sub market of about a gazillion for Chicago.

Anyways-- here is a Perfect example of a buying opportunity in Las Vegas-- A foreclosure in Las Vegas priced at $424,900 where the owner originally paid over $750,000 for it brand new back in 2006. (Obvious speculator since the home was never lived in and might as well be brand new.) Current comps suggest a value of around $600,000 for this neighborhood so I think it's pretty obvious that this is a good deal. Especially since there are homes in this neighborhood where people paid over $900,000. In other words... it's the cheapest home available EVER in this neighborhood. You probably know what Progression and Regression means so keep those terms in mind when it comes to values and their effect.

These deals are getting harder and harder to find in Las Vegas in comparison to January since the Las Vegas market is starting to show signs of life again and the low prices are drawing a lot of interest from people all over the United States.

All markets run in cycles. Gold would certainly have been much appealing to buy four years ago in comparison to today but Gold traders will certainly tell you now is the time to buy it. Just like new home builders were telling everybody three years ago the next phase is going up in price so you have to buy now!

You stated that you could rent for $1,200 a month for a home that is comparable to buying a $500,000 home. In Chicago where the property taxes on a $500,000 home would easily be 3/4 of that $1,200 payment, that's a pretty good deal... if in fact that rental is comparable to a $500,000 home which (no offense) seems hard to believe. But then again, there were people buying $400,000 homes in Las Vegas as "investments" even though they would only rent out for $1,200 on the rental market. (Even then, that makes more sense then a $500,000 home in Chicago renting for $1,200 since the property taxes in Las Vegas are so much lower then the counties that make up the greater Chicagoland area.)

What I would really like to know is what area of Chicago you are looking in and have specialists in that market give their case for you to buy with real life examples.... - Sun Apr 20 2008, 12:20

Ryan,

My thoughts, but it certainly makes much more sense to buy (in our area anyways) now then it did two years ago and a lot of other people do to according to a poll I posted a blog about here -->

http://lasvegasrealestate4u.com/2008/04/14/real-estate-menta…

As the herd mentality goes, many who have an interest in purchasing real estate (such as yourself) are waiting to see what is going to happen and are waiting for a magic headline in the media so here is one of my favorite quotes:

“I’ve found that when the market’s going down and you buy funds wisely, at some point in the future you will be happy. You won’t get there by reading ‘Now is the time to buy.’ ~ Peter Lynch

There is a ton of truth to that quote and it applies to all markets, whether it's stocks, commodities, etc..

My biggest suggestion I can tell anybody right now is to find real estate agents in your area of interest that know how to at least perform rent vs. buy calculations tailored with your financial criteria, have access to foreclosure information and is very familiar with what the new home builders are doing in terms of pricing and incentives. (Obvious values to using an area specialist.)

For some buyers it makes sense, for others it does not. Speculating on future real estate prices is precisely why there is so much chaos and confusion going on today. (Let's face it, there were a lot of people buying Las Vegas real estate in '05 on the basis of '04 apreciation rates and hoping to refinance exotic loans in a year or two. There is a reason why professionals use historical appreciation rates. Professionals also understand the forces in play that cause prices to go up... or down. Easy access to money, employment factors, community amenities, future developments, etc..etc...) Just quoting something out of the paper/media is generally a really good sign that an agent has less experience in real estate then the journalist reporting the information...

For the Chicago real estate market, you might want to check out http://www.chicagobusiness.com/ for clues to what is going on in Chicago -- in combination with the advice of an area specialist more interested in your long term business (and your referrals) then a quick commission.

By the way, I'm also licensed as a Broker in Illinois - even if I knew your specific criteria and financials -- it depends on the area of Chicago you are moving to. Unless I know that area of Chicago (which is an incredbily huge market full of sub-markets) I could not tell you with absolute certainty if it's a good time to buy or not... In other words, opinions from all over the United States are probably just going to confuse you even more.... - Sat Apr 19 2008, 02:02

Personally,

I likehttp:// www.SchoolMatters.com by Standard & Poor's due to it's simplicity.

If you really want to dig into performance ratios and comparisons to other school systems you can go to their sister site here --> http://www.schooldatadirect.org/app/location/q/stid=29/llid=…

Private schools in the Las Vegas area are certainly something you need to interview and then determine for yourself which one is the best fit for you. - Wed May 28 2008, 08:43

Len,

I guess I should have clarified and stated that I was providing that reference due to one of the answers provided below which I assume you read since you provided an answer concerning accuracy.

Definition of BPO, aka Brokers Price Opinion from the Nevada Real Estate Division --> "A BPO is a tool utilized by the real estate industry to determine a competitive listing price on a
property."

Competitive listing price = what a buyer in current market conditions is willing to pay for a property.

My Quote ---

"Technically... what something is worth is what somebody will pay for it. In real estate, people have paid more then the appraised value and people have paid less then the appraised value."

I never made a reference that an agent is in violation for providing an opinion of value or whatever else you may be assuming.

Providing opinions of value online for properties not seen is a couple of steps above a Zestimate... (Which, IMO, Zestimates are pathetic.) - Sun May 25 2008, 05:10

For a reference to providing an opinion of value from the Nevada Real Estate Division --> http://www.red.state.nv.us/publications/announcements/bpo.pdf

Technically... what something is worth is what somebody will pay for it. In real estate, people have paid more then the appraised value and people have paid less then the appraised value.

The value of a real estate agent is experience in buying right to begin with for your future resale potential. (For selling, it's current trends taking place such as who is buying what and why.) - Sat May 24 2008, 17:39

A lot has changed since July 15th, 2007. Lenders certainly are not going to accept an appraisal this old and neither should somebody buying real estate. - Sat May 24 2008, 16:59

Debbie,

A true professional is not going to give you (technically an anonymous person on Trulia) an opinion of value on an open forum due to the implications of agency requirements. - Fri May 23 2008, 17:20

Debbie,

Opinions of value on property without an agency agreement is not in your best interest. I don't know any true professionals that are going to openly answer opinions of value on an open internet forum and that's because they understand what an agency agreement is to begin with. - Fri May 23 2008, 17:16