April 2012 Market Update Episode #204
Hello! Welcome to Todd Miller TV. I wanna do an update for the first 3 months of the year, so basically this is the April update for January, February, March of 2012 here in Las Vegas, Nevada Real Estate Market. So you probably heard some people come out talking about the lack of inventory, AB-284 which is the political legislation that happened last year, and all these other things that are gonna kill the economy and destroy the Real Estate market and everything, and I just wanna talk about those ’cause I actually got numbers here that explain that. So, the key factor of what’s gonna happen with prices and everything is really a function supply and demand. Okay? Whether at equilibrium or were not equilibrium. So depending on where we are, the market always tries to get to equilibrium. So either the demand curve shifts in a way that causes prices to fall, shifts in a way to cause it to rise. The supply curve is pretty much you know, that can shift too based on supplies. So, without going in to big economic explanation, I wanna talk about the actual reality and actual numbers, okay? So right now, you would probably be surprised to find out if I told you there are over 20,000 homes on the market that are not/that have not sold. Okay? Because you’re probably seeing there’s 4,000, there’s only 3,000, there’s only 5,000, but they’ve segmented it all down, they’re only talking about REOs, they’re only talking about single family homes, they’ve cut it out to make it seem more as it is. 20,288 homes is the actual number. Now, some of those homes are under contract. Actually, about 13,000 of those homes are under contract, okay? What that means is somebody wrote an offer but it hasn’t close. and a lot of those fall out of contract and so the sort of thought that there’s not any houses out there is super misleading. Because obviously there are 13,000 people out there under contract on a house right now, alright? And some of those are investors they have a few more than one houses they’re under contract on, alright. What that leaves is 7,142 houses, condos, townhomes, everything that’s in available status some would write an offer for it right away. Now, what’s interesting about bot that number is, that’s actually the normal healthy number. We’ve been so used to having in this industry a ton of houses for that last 4-5 years, this 2006 we’ve had, you know at anyone time between 12,000 and 20 something thousand homes available. So, you’re probably saying “why is this bad? Isn’t it good that this is getting absorbed because you’re hearing that there’s gonna be another flood of REO this year, there’s gonna be more foreclosures,” it was interesting a National article came out and said “Yes, there’s gonna be more foreclosures” but everything’s gonna get absorbed now and they said even though they predicted more REO this year than last year, they’re predicting Nationally prices come up here, we’re already seeing it. We have anecdotal information, we have the actual information, prices are going up. Okay? So, you’re probably saying “well why/what is the big deal?” Well this is the big deal, the people that are making the accusations or the implications or trying to say this is bad, bad, bad, this is a conspiracy and all this other stuff, many of them are in the industry. And many of them, it’s easier for them to do their job when they have a bunch of houses on the market. This is why: you have a buyer, you take the buyer out to the house, okay? There’s no offers on it. You write the offer, gets accepted, now you get a commission check, right? Or you can go to a house where there’s 10 offers on it, write an offer to it, the offer did not get accepted because there’s, you know you’re competing with 9 other people and you’re gonna be frustrated. So you’re gonna be upset, etc. and everything. So, you know, the problem really isn’t/look if you bought a house last year, you scored. You killed it. As a matter of fact, if you’re looking at this today, and you’re sitting there 6 months or a year ago thinking, I’m thinking about buying in Vegas, you should have watched my videos last year and should have listened to what I’ve said ’cause you missed out. I’ve always said you can’t time the real estate market, the transactional fees of going in and out of Real Estate are too much with all the taxes and commissions and everything that at cost, you can’t try and go buy and show short term, except for flipping which is completely different. But, you missed! I mean last year, the deals that were around last year are gone. We have investors that are going “Todd, why can’t you get me the houses like you got last year?” I’m like, “cause they don’t exist! They were all bought up, you want that house, $15,000, $20,000 more for that low end house.” Even the really low end stuff, you know, those 30-$40,000 homes are 50-60,000 now. So, this is not a bad thing that the inventories is down. 71,000 homes is a lot. When I pulled the numbers for the first 3 months of the year, January, February, March, I get about 12,000 sales. Well if you multiply that times 4 that’s 48,000 sales, that’s just as many sales as there were last year, there will be inventory to cover it. It will come out. There will be more shortsales, there will be more REOs, there will be investors who bought last year and the year before who I told you are have won in the short term, who will sell when the prices go up. Some of the people will just say “Hey, I’m gonna take my $20,000 profit and try another market or whatever. So, or just take the cash. So, this is not a terrible thing. Supply and demand rules does. The bottomline is, if prices go up, that’s really good, it’s good for everybody who bought. If not, could you have waited, you’re just gonna have to pay more but interest rates are low and it’s you know, and that’s just the way it is. But I wanted to talk about this, it’s not a big deal as everybody is making it, it’s only a big deal if you’re an agent with a buyer, and then you’re writing offers on, and getting 10, 20 agent all in clients, also writing offers and you’re frustrated ’cause it’s harder for you to do your jib if there’s few inventories. So, and it’s also tough if you’re a Loan officer ’cause you’re helping a person go through the loan process, getting qualified and they’re not able to find a house. So, it could be frustrating for those people, I totally get it, you know, and so, anyway, I just wanted to sort of give you an update, tell you what’s going on, give you the anecdotal information and explain the actual inventory, these inventory numbers haven’t really changed that much. Despite what you hear it’s definitely bias, it’s definitely skew towards scaring people. I really don’t know what the motivation is ’cause it doesn’t really give you the information to help. So, anyway, that is my update for today and hope to see you on another video. Thanks!