Las Vegas Market Update – May 2012 Episode #214

Hello! Welcome to Todd Miller TV. I’m gonna do a market update for May, even though the month’s not completely over, it’ll be over in a couple days. So, anyway I got some interesting numbers for you, if you’ve been following this every month you’re gonna sort of see a trend. But right now, the big talk is there’s no inventory. There’s none, that’s what people say. There’s none, you have to put a ton of offers on all the houses. And that’s true and not true and I’ll explain why. Okay. So first let’s talk about the total number of houses that are on the market. What I mean on the market I mean available for purchase or under contract. ‘Cause we have to count the other contracts ’cause what that represents is somebody who’s successfully is under contract on a house. And a third of those fall outs. We’re gonna go with the over all numbers. The over all number according to the MLS, this doesn’t include new home sales or stuff happening outside the MLS, is 21,614. 21,614, you’re probably saying “well wait, I heard there were no houses. I heard that” well, hold on! We’re gonna get to that ’cause that’s a different subject. Total houses that have/that are available, there’s 5,382, so about a quarter. See off all these houses, a quarter of them are available, 3/4 of them are under contract. Right? Now, how does that look at what’s listed in the last month and what is sold in last month? Well last month, there were 3,480 solds/closed properties. So that means that if these 21,000 it’s taking about 6 or 7 months to absorb all the houses. So the absorption rate is arguably somewhere between 4 and 6 months probably. Which is not bad. That’s pretty normal. We actually have twice as many houses on the market. That 5,400 hundred number is twice as many as it was in 2004, the busiest point of the market when the homes were discrene even quicker. And over the last 30 days there were roughly 3,000 new homes came on the market. So, they’ re being absorbed, they’re coming on the market so, you’re probably saying “wait a minute Todd, I’ve heard AB-284 it’s destroyed everything and blah blah blah blah…” Well, It’s misleading and this is why: Let’s imagine that you have been looking online for 6 moths or a year, or you bought a house a year ago, now you decide you wanna go buy another one. So you’ve decided that you only want to buy a 3 bedroom, 2 bathroom house and you don’t want to pay more than $60,000 or $70,000 and you found a nice area, you got a house for $65,000 and it was a great deal, and you want to buy another one. You go search on that area in that price range and you find no houses. Meaning you go everything under $80,000, 2 rooms, 2 bath, it was built since 2000. You find 3 houses. And you go “Oh my God, the houses are gone! AB-284 ate them.” It jumped up from it’s hole and gobbled up the houses and the houses are gone. Well that’s not really true! Because remember I just said, there are 5,380 houses available to be purchased. What happened is. you’re house criteria, all the houses are appreciated, they’re not end anymore. So what happened is you have this search criteria that’s here. But then all the houses are now up here. So you’re not seeing them. So they appear to be not there. Now you’re saying “Now wait, Todd, I’m and investor and I have 53/I was told by the agent there were 53 offers in a property.” Yes, and this is why: ‘Cause everybody is searching up here, remember all the houses are listed up here. Everybody’s searching right here and there’s one house there. Well guess what, everybody does! They put an offer on the one house that’s under price or listed under market value. Everyone jumps on this smoking deal. Everyone wants the best deal. Everyone/no one wants to just go buy a house. They just want a deal. So you have a lot of people targeting the same couple hundred houses. Out of all that, there’s probably 2 or 3 hundred houses out there that everyone is writing an offers on. The same 2 or 3 hundred. And the other 5,000 and change, people are putting offers on. I just did an MLS search, we have 80 houses available for purchase in our company that are not under contract. Some of them probably have some offers on, that’s correct. But there is inventory out there. So, important thing is to/the information you’re hearing is anecdotal information. The people that are saying “there are no houses for sale, they’re hard to get or whatever”, are the same buyers and real estate agent who are only looking at what a home/home sold for the past. Yes, if you want that $50,000 house, it’s gone probably. It doesn’t exist. You have to go back in a time machine to last year to buy that $50,00 house. That doesn’t mean the houses are gone, the house is just worth more now. So if you go in the MLS, you’re working with an agent or whatever, tell you’re agent what you want and just say don’t worry about the price and just see what comes up and go from there. People have no problem paying $300,000 for 3 bedroom, 2 bath house that would get about $1,200 or $1,300 a month rent. But today, if it’s over a hundred they say “Forget it! It’s too much!” So I just wanna put things in perspective with you, there are still deals out there, we know that there’s still foreclosures, we know that there’s still an inventory that are coming. Is AB-284 a factor? Yeah! Maybe a 10-15% factor. It hasn’t even, we haven’t even really seen the full effect of it. We’re seeing the leading edge of it. But that’s not what’s causing this. What’s causing this is Buyer demand has picked up, there’s more loan programs out there, Short sale’s are getting done quicker, and the bank have this inventory that they can’t get through. They just can’t push them out fast enough. They don’t have enough capacity to do that. We have the capacity on our end, to absorb them, they don’t have the capacity on their end and when they do come out, guess what? They’re higher price. So, what I want you to take away from this market update is, prices are rising in Vegas. I want you to go back 6 or 8 months ago and look at some of my videos where people said “Todd, I need to buy everything under market value ’cause the market’s gonna fall.” And I said on video that prices would go up, prices are going up, just like I said they would because we’re seeing the leading edge. We still see the leading edge of this, prices are still going up, you know houses are selling for more than appraised value etc. etc. So the outlook is, if you’re buying it’s probably a good time. It has been, I’ll say it’s a good time now, I’ll go back and say 9 months ago, It was a great time. Meaning, 9 months or a year ago, you should have bought everything you can get your hands on because they’re all worth more. Will they be worth more in a year? I think so, I’m personally still buying when I see an opportunity. But rents are still strong. So anyway, that is my update for Las Vegas Real Estate market for May of 2012 and I just wanted to share that with you. Hope to see you on another video. Thanks!