Market Update Dec 30,2011: Episode #178

Todd: Hello and welcome to Todd Miller TV. Today is the last day/working day of 2011. So it’s December 30th, we’re here in the office, making it happen. So I’m gonna do the report for December and I’ve got Oana here with me to sort of go over the numbers and give anecdotal information. So, these are the 2 big numbers that I pulled up, okay? Alright, Sold this month. Now this doesn’t include stuff that closed yesterday that hasn’t been updated in the MLS, plus closings today ’cause I know we’ve had at least 2 today right here just for us, okay? So then there’s probably a couple more hundred out there. So it’s 300,626 closed in December in the whole market. Now, given that number, there are only 11,729 properties in ER which means active on the market. Now, really quick math tells me that’s less than 4 months. That’s about 3 and a half months of inventory. So, when there’s that little inventory, normally, what do you see happening? What happens when there’s that little inventory? and you like say get a new listing?
Oana: Actually, if I get new Listings I look at my current listings.
Todd: Okay.
Oana: I have properties that have been in the market for well over 120 days that just got new life breathe into them this week, that have multiple offers on, I didn’t have any game on before.
Todd: Okay.
Oana: So, what I’m seeing is that some of the dogs all of the sudden looked a lot better.
Todd: Okay. So, if you’re a buyer, and you’re submitting and offer on a property, is it/would it be un-realistic then/let’s say the List price is $80,000, and if you submitted your offer for 80,000 and you got back gaining multiple counter thing/things that were multiple offers, would it be realistic if you would have to pay over 80,000 for that property?
Oana: Not at all. Not at all. And like I said anecdotal information is/I have a property specifically in lined right now that has has no game. Right now, I have 3 offers, I have had 6 calls on it today, and everyone of them are agent saying: “I’ve got a buyer, we’re paying cash, we can close in 15 days, can I send you an offer?” and I said “well, come on in, no hire’s warm, it’s gonna be highest invest” And they’re all coming in at or above list. They understand the game. They understand what the market is. And a lot of them are telling me “well, my buyer wants to offer X” and my answer is “That’s fine! understand that you’re dealing with multiple offers” and as soon as I say those words, they’re answer to me is “Oh, Okay! I understand, I’ll get him to offer list + Y.
Todd: Okay. So the strategy for the average person is, if there’s no offer they offer it less.
Oana: Correct!
Todd: If there’s a couple of offers list price, but if there’s like 5 or more they always wanna know many offers.
Oana: You know, the number of offers is less significant, as the significance is when we have multiple offers.
Todd: Okay.
Oana: When we have multiple offers there are a lot of things in play. One of them is now it becomes a bidding situation. And the other thing is people become emotionally competitive. It’s really very interesting. When this property was only worth “X” to them, now all of the sudden it’s worth X + Y to them ’cause they wanna beat up someone else.
Todd: Okay. How do you see this really, ’cause the video I did the other day was that you know, these people that are still saying the market’s gonna drop 20-30%, they still talk about this shadow inventory which I’ve been talking about now for 3 years. And, you know, they keep saying “well the market’s gonna drop” we don’t know. We don’t know 6 months from now what’s gonna happen. All other things being equal, what’s sort of your prognosis for, ’cause you do get a lot of REO listings everyday, so what’s your prognosis for moving forward and to the new year? And what would you tell a consumer out there that was gonna buy something? How would they deal this information?
Oana: You know, it doesn’t matter what the List price is. It doesn’t matter what/how many offers are there. The only thing that really matters is what is that property worth to you?
Todd:
Oana: Because if they’re going to offer over list, that’s fine! And you get the property perfect. But will you stick with that deal? Or will you at some point will ahve buyer’s remorse and back out. You know it’s really important that people understand what that property’s worth to them and that they’re willing to make good on that offer. Because what happens a lot of times is they will go ahead and get the property. So now the other buyer’s going else where but then they’ll get buyer’s remorse and back out. And really that kept somebody else who would have wanted the property from getting that. And it doesn’t serve anybody, it doesn’t serve the person who backs out, it doesn’t the other people who participated in the process. It’s a loose-loose situation. So and that’s not us getting at before as far as getting emotionally involved. Rather getting emotionally involved which is difficult not to do, I appreciate that! But understand what this property is worth to you and then stick with it. If you get the property, the stick with it. Sell it all the way through. Because it was worth it to you when you were bidding.
Todd: Right.
Oana: It should be worth it to you all the way through the process and close the deal.
Todd: Okay. Cool. Anyway, So I just wanted to share those 2 numbers with you. Share the absorption rate which is that 3 and a half month number. And then just get some anecdotal information form Oana, So thanks you very much.
Oana: You’re welcome.
Todd: That is the update for December. I will do an update next week probably for like the whole year and I’ll go over all the numbers which I have a good idea of what they’re gonna look like ’cause I’ve been doing this every month but you’ll get an update for the whole year and sort of like prediction for what’s gonna happen in 2012 here in Las Vegas Real Estate market. So, Thank you for tuning in, and hope to see you on another video. Thanks!