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Melissa, here are the real estate headlines:

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The number of homes offered for sale in the Las Vegas area seems to have stabilized at around 15,000. This is down significantly from the 27,000 we saw back in 2007 as the real estate “bust” started to gain momentum. The chart below indicates how this has changed over the last few years.

The number of homes sold has also showed remarkable stability. When the inventory was at its peak, sales reached a bottom with as few as 1,300 selling in some months. Today things are much better with over 3,500 sales most months lately.

The great majority of homes offered for sale are still “distressed” properties, with short sales accounting for more than half and foreclosures making up another quarter. The ratios are reversed when we examine the actual sales with half being foreclosures and one quarter short sales.
With more and more positive economic news trickling out of both Washington and Carson City, we can expect to see more strengthening of the Las Vegas real estate picture.
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A lot of the real estate headlines are based on “Lazy” statistics. These are statistics created without really doing the hard work that the truth demands. House prices are a perfect example. Almost all the news regarding prices is built upon the shaky foundation of “median” prices. This is a badly flawed method since it is strongly pulled by, not just prices, but by the size of homes selling.
There are two notable exceptions to this proliferation of lazy statistics. These are the CoreLogic and Case-Schiller price indexes.

The better of these two is the Case-Schiller report. Developed by two economists in the early 1980′s, this uses paired sales and a proprietary weighting system to establish a highly respected reflection of current and past real estate market pricing. Done consistently since 1987, there are monthly Case-Schiller reports for 20 major metropolitan areas including Las Vegas.
The above chart is based on the Case-Schiller Las Vegas reports. You can see (green arrow) that we are now back to the October, 1999 price levels. More importantly, you can readily see that, after falling at a dizzying pace for two and a half years, the rate of price decline slowed in late 2009.
We have heard of a “double-dip” in the house-price collapse. There is nowhere to go but up. This chart tell us that any further declines will be minimal. The worst is now far behind us.
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More Americans are working and that’s good news for Las Vegas. People without jobs are extremely unlikely to hop on a flight to Las Vegas and spend money. And tourists spending money here is the main driver of our local economy. As America gets back to work, Las Vegas gets back to work. The chart above shows that jobless claims, a major economic indicator, hit a new low level. This is very positive when compared to the start of 2009.

Our county’s Gross Domestic Product has been increasing every quarter since early 2009, as you see in the chart above. This is a very powerful sign that we are now well past the depths of the Great Recession.
With both jobs and the GDP coming back, all that remains is for time to take its course. Employment and consumer confidence always lag behind the economic recovery. Despite the problems of the last several years, consumer confidence is slowly starting to rebuild.

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With banks paying under 1% on your savings account, real estate is one place to earn a good return. This Sun City home (Often Seniors are much better renters) is over 1,100 square feet, has tile floors, a low maintenance yard and is almost ready for your renter..
Cost to Buy this Investment:
$110,000 Purchase Price
$27,500 Down payment (25% for investor)
$82,500 Loan
$2,500 Closing Costs
6.0% Interest rate (investment rate)
Monthly Investment (figured high):
$500 Principal and interest
$100 Property Taxes
$50 Landlord’s Home Insurance
$75 Vacancy/Repair allowa nce (1/12)
Monthly Income (figured low):
$900 Rent (low average)
Monthly Net:
$900 Income
$725 Expenses
$175 Net Income
That is a 7% return on investment, however, you have an appreciating asset. In a few years, once the price doubles, you can sell it and walk away with about a $100,000 profit on an investment of $30,000!
Melissa, please call me at 702-436-1011 for the numbers on a lower or higher priced home.
Buy a home as a place to live or as an investment, but do not depend on appreciation since no one can predict the future with any degree of accuracy
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The February rate of new home sales continues at an anemic pace through the end of February, according to the US Dept. of Commerce. Economists feel we will need to almost triple the current annual rate to regain vitality in this key industry.
The problem is that new home builders simply can’t compete with the resale prices that have been driven down by foreclosures and short sales.
This is unfortunate since every new home constructed creates three job per year and, according to the National Association of Home Builders, generates $90,000 in taxes.
Despite the availability of very affordable resale homes, some consumers will always buy a new home. This fairly small slice of the buying public (less than 10%) is what is sustaining the remaining new home builders. Here in Las Vegas, new home sales for 2010 were under 5,000, about one seventh of the breakneck pace established du ring the boom just a few years ago. Using the NAHB job formula of three per house, that means the Las Vegas area lost almost 100,000 jobs from just this one market segment.
The housing industry “experts” are predicting that home building won’t come back until the vast majority of resale homes are sold. That, according to the most reliable economists, may still be several years.
MelissaTowbin
702-436-1011
 
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