Category: Real Estate News

Las Vegas Sees a Boom in the Commercial Real Estate Market

The commercial real estate industry in Southern Nevada has entered 2022 on an upturn and is still flourishing, despite some headwinds. It’s being fed by the substantial economic growth in the Las Vegas Valley, strong demand along with a development industry that is ablaze with activity.

2 sectors are best positioned to thrive in 2022.

■ The industrial sector remains strong and resilient. There has been a growing demand for space that is outpacing our local supply. Smaller facilities remain in demand, while e-commerce companies are looking to lease or build larger warehouses ranging from 500,000 square feet to 800,000 square feet.

The North Las Vegas market continues to be active, with most projects designed to meet the needs of e-commerce companies, such as Amazon and Fanatics. Other submarkets like Henderson and the area around the airport have attracted very large users like FedEx and Kroger.

On the agenda for 2022, plans include another 18 million square feet of planned industrial space to be built, although most of these projects won’t be finished until 2023 and are already spoken for. Southern Nevada absorbed more than 10 million square feet of industrial space in 2021. According to developers, competition is at unprecedented levels and everyone wants a piece of the industrial market, creating a huge shortage of materials and escalating land prices.

■ The office sector continues its ongoing recovery from COVID-19 and associated lockdowns. Asking rental rates increased to $2.27 on a full-service basis. Office inventory increased by over 93,000 square feet in the fourth quarter of 2021, bringing year-to-date deliveries to over 178,000 square feet.

Southern Nevada had nearly 675,000 square feet of office space under construction at year’s end, the most space under construction since 2014. We also had three quarters of strong net absorption in 2021, with occupancy increasing by 930,000+ square feet this year.

Looking forward, the state of our tourism industry will be a key metric in Southern Nevada’s recovery. This year, the local economy is expected to continue progressing along that road — even with new COVID-19 variants overshadowing the headlines Sothern Nevada has experienced recent population growth, rising gaming revenues and a steady return of tourists enjoying all Las Vegas has to offer. After record-breaking gaming revenue numbers through the end of 2021, industry experts are predicting Las Vegas could see a full recovery by 2023.

Still, Nevada’s recovery has been uneven. For instance, Northern Nevada’s employment numbers have now exceeded pre-pandemic levels, while in Southern Nevada, the same cannot be said. And, while gaming revenues are up, local hotel room occupancy levels are not back to pre-pandemic peaks. Of course, the Las Vegas area was one of the hardest hit in the U.S. because of its heavy reliance on travel and tourism.

Large conventions have begun returning to Las Vegas, however with the omicron surge, some of the larger companies that attend such conventions have switched to online participation; in particular, the insurance and financial sectors.

Additionally, international travelers, who account for up to 20 percent of all Las Vegas visitors in recent years, have been slow to return.

There are likely to be continued challenges with rapidly rising material costs, supply chain issues, inflation, land constraints, omicron and concerns over our water supply. Nonetheless, the commercial real estate sector is expected to continue on an upward trajectory over the next couple of years at least.

Do you have a need for commercial/industrial/retail buildings or land? Are you ready to buy or sell a home? Do you want a guaranteed cash offer? We can help you with all of that… just call us at 702 SELL NOW or click on this link to my website http://www.702SellNow.com

Choose to have an amazing day….Jeff

End in sight to the housing shortage? Yes, but experts can’t agree on when…

Real estate investment, Real estate value

I constantly get asked when I think that housing prices will go down, or at least slow down… based on the laws of supply and demand, that will happen when the supply (inventory) increases substantially, the demand decreases substantially, or both.

Here’s an excerpt from a recent article I read; “While 38 percent of experts polled by Zillow recently believe 2024 will be the year inventory returns to 2019 levels, 36 percent pegged 2023 as the year. The remainder believe we’ll have to wait until 2025.”

If you want to read the whole article, go here; https://markets.businessinsider.com/news/stocks/first-time-buyers-inventory-expected-to-rebound-in-2024-1031304612

And keep in mind, in Las Vegas in 2019, inventory levels were much higher than they are now, but they were still low enough to be considered a seller’s market.

Let me explain the way we measure first;

An absorption rate is a mathematical representation of the supply vs the demand; take the number of units available for sale today, and you divide that number by the number of units sold in the past 30 days, and you get your absorption rate.

Example: if there are 8,000 homes available for sale in a particular area and 2,000 sold in the past 30 days, your absorption rate would be 4 months – because if not one new house came on the market and houses magically sold at the exact same rate, it would take 4 months for those 8,000 houses to get sold

The National Association of Realtors says that a balanced market is 4-6 months of inventory (historically, houses in a balanced market appreciate 3%-4% per year);

a number bigger than 6 is a buyer’s market and the bigger it gets the more the buyers are in charge and the slower prices increase (maybe they decrease if that number gets big enough);

a number lower than 4 is a seller’s market and the smaller it gets, the faster prices increase.

Las Vegas has less than 1 month of inventory right (0.6 months today) now and has consistently been less than 1 month since February 2021 with a brief 4 days in August 2021, where it crept over 1 month, but still less than 1.1 months.

How can you have less than 1 month of inventory for that long? Well, when a house hits the market, if it is priced correctly, it will have an accepted offer in just 7-15 days under current conditions, however, it typically takes another 20 or so days to close escrow and transfer ownership to the buyer…

As long as the absorption rate stays below 2, housing prices are going to continue increasing rapidly, and between 2 and 4, still increasing, just slower.

Do you want my opinion? Well, you’re gonna get it. At least in the Las Vegas valley, there is no way we get back to 3 months of inventory before 2024. Of course, I don’t have a crystal ball anymore (it fell in my bathroom and shattered into a million pieces last month), but that is what I believe.

Do you have a need for commercial / industrial / retail buildings or land? Are you ready to buy or sell a home? Do you want a guaranteed cash offer? We can help you with all of that… just call us at 702 SELL NOW or click on this link to my website http://www.702SellNow.com

Choose to have an amazing day….Jeff

My Thoughts on The Current Housing Market (or “is the Bubble About to Burst?”)

If you aren’t aware, most of the U.S. is seeing a sharp rise in the cost to buy a home, and in many cities, buyer’s find themselves in one bidding war after another until they finally win (or give up). Some have commented to me that it is reminiscent of 2006… so is a housing crash around the corner? Now I don’t have a crystal ball, but…

I say unlikely.

Now let me explain my answer.

I’ll speak specifically about the Las Vegas housing market, because I know it intimately, however from what I have gleaned from professionals I know around the country, what is happening in Las Vegas seems to be true in most cities in the U.S.

In 2006, home builders were building as fast as they could in Las Vegas, with a sort of “Field of Dreams” mentality that “if you build it, they will come”, and the buyers bought… (until they didn’t anymore). When the Las Vegas market screeched to a halt, there were roughly 50,000 completed vacant residential units (single family homes and condos) with no buyer, and thousands more in some state of incomplete. To put that in perspective for you, (not counting 2005, when the most units were sold in Las Vegas) approximately 3,000-5,000 units sell in our valley each month on average – literally 3,708 in the past 30 days.  In economics we learn that when the supply goes way up – even if the demand does not change, then more sellers are competing for the same number of buyers, so most of them begin to lower their prices… and they lowered them and lowered them.

Additionally, in 2006, you also had money that was super easy to borrow, so very few buyers had any “skin in the game” when they bought a property. In 2006, you could buy a $300,000 house with zero down payment and zero proof of income… in fact, just before the crash, there were loans that let you buy a house and actually walk away with cash in your pocket!

So, when the number for sale properties went up sharply, and sellers were dropping their prices to attract the buyers, the owners that had recently purchased with no down payment, saw the prices of their properties begin to go down. Those people had no down payment to lose… so they just walked away from their new homes, leaving them to be foreclosed on, and add more units for sale to an already over-supplied market. Then prices dropped more and more units went up for sale and priced dropped more and (well, you get the idea).

Builders stopped building almost completely (a few were built here and there) until around 2012, when the inventory finally dried up and houses started to go up in value again. Between 2006 and 2012 a lot of people also consolidated households out of need. The economy was bad so people shared homes with parents, friends or whoever they could to keep expenses down… causing there to be very little need for new homes anyway.

Around 2011, a ton of cash began flowing into the Las Vegas real estate market and in 2012, close to half of the houses purchased in our valley were paid for all in cash by investors scooping up bargains. Many of them had seen the writing on the wall in 2005 and sold their assets and putting their cash “on the sidelines” to wait for this. Wall Street got involved too and hedge funds like Blackstone started buying properties to rent out. Since 2012, close to 1/3 of the houses in the valley have been purchased with all cash, and now, (unless you are a veteran of the armed forces), you pretty much have to have at least a small down payment to buy a house… plus, builders, who learned their lessons, are only building if you give them a down payment, and even if they wanted to build them faster than they could sell them, according to a Wall Street Journal article this past April, we also have too few home builders in the US.

So, with the economy recovered (pre-Covid), combined households, began to realize they wanted their own space, so builders began to build again. But remember, for 6 years, our population grew at a normal rate, but the number of new houses built, stagnated significantly. So now we have a lot of people wanting to own a home, but not enough homes to own.

Then came Covid… along with a moratorium on evictions and foreclosures. Sure there were plenty of people out of work, but believe it or not, there were a fair number of essential workers who had good income and wanted to own their own place, but there were very few for sale because many people who may have thought about selling, just didn’t want a stranger in their house, so they waited… and you did not have people “forced out”, so those did not come on the market.

[January, 2020, just before Covid hit in the Las Vegas valley, saw 23% more homes sold than January 2019 with 23% less homes on the market, and this has actually got worse since then. January 2021 saw 28% more homes sold than the year before and 40% less homes on the market.]

According to a Wall Street Journal article this past June, the U.S has 5.5 million too few homes, currently, and I read another that says if we double the number of homes built from last year, and kept that pace, it would take until 2050 to catch up based on current demand and estimated population growth.

Wow that’s a lot of information and if you didn’t follow it too well, I’m not surprised, so I will sum it up. We need a lot more houses in this country than we currently have (make that a lot more than a lot… actually a lot more than that), so it is highly unlikely based on the laws of supply and demand that the Las Vegas or U.S. housing market is going to crash anytime soon. Individual small markets could certainly be an exception here and there, however that is the overall outlook.

Do you have a need for commercial / industrial / retail buildings or land? Are you ready to buy or sell a home? Do you want 3 cash offers? We can help you with all of that… just call us at 702 SELL NOW or click on this link to my website http://www.702SellNow.com

Choose to have an amazing day… Jeff

Share this:

3 Trends Driving Hyperactivity in the Real Estate Market Nationally

Despite the economic uncertainties that surround the pandemic, one fact has become crystal clear: Americans are ready to buy a new home. We have low inventory, bidding wars, and record-low mortgage rates, all of which are giving consumers a new sense of FOMO—fear of missing out—and creating a red-hot housing market.

Ali Wolf, chief economist for real estate analytics company Zonda, said Thursday during the National Association of REALTORS®’ virtual Real Estate Forecast Summit,“ To our surprise, the housing market has not only recovered but roared past pre-pandemic levels,” added NAR  Chief Economist Lawrence Yun, who presented a consensus real estate forecast based on a survey of 30 leading economists. The numbers and facts in this post (until the last sentence) are National, not Southern Nevada.

For some Americans, soaring home equity and gains in the stock market are padding the financial impact of a pandemic-fueled recession. Pending home sales are up 20% from a year ago, buyer traffic is up 32%, and mortgage applications are up 27%—all indicators that this winter may be the best ever for the housing market, Yun said. Mortgage rates also remain at record lows. The 30-year fixed-rate mortgage averaged 2.71% for the week ending Dec. 10, according to Freddie Mac.

Sellers, Builders May Ease Inventory Crunch

Inventory remains constrained as buyer demand surges. Potential sellers who are hesitant to list their home during a pandemic may not be aware of the housing market’s strength, said Danielle Hale, chief economist for realtor.com®. Sellers are often buyers, too, and they may not want to face the challenge of finding a home amid low inventory. These realities have limited the number of homes on the market during the pandemic, panelists said.

Why can’t builders construct more housing to meet demand? Labor shortages and escalating prices for building materials maybe holding back many builders, with 80% saying they had to raise their new-home prices last month due to higher expenses, according to Zonda research. Further, most new-home construction in recent years has occurred near expensive urban cores.

Now that more buyers want to live farther from the city, builders are snatching up land in far suburbs and exurbs, said John Burns, CEO of John Burns Real Estate Consulting. Builder sentiment indexes are running at record highs, Burns said. “Builders have never been more optimistic, so we’ll see more construction—but it’s still going to take a while.”

Suburbs Grow, But Cities Aren’t Dead

While the suburbs are in a growth phase, not all buyers are giving up on city living. “The popularity of the suburbs is real, however [the housing market] is not reflecting a full-fledged urban flight either,” Hale said. “Real estate is booming everywhere. The suburbs have bounced back relatively quicker than the urban areas nationwide.”

The suburbs were growing before the pandemic as millennials started migrating away from cities to form households. That trend has only accelerated, Wolf said. “The work-from-home environment has really fueled the ability for more people to migrate,” she said. “Home has become a focal point” as people hunker down during the pandemic.

Demand from investors also is surging, panelists said. Build-for-rent subdivisions are popping up as investors see a growing appetite from renters for single-family homes. Investor groups also are crowdsourcing funds to buy properties together, and home flippers are reemerging to turn around fixer-uppers for a quick profit, Burns said.

Assistance Programs Boost Affordability

Low mortgage rates can help buyers offset higher home prices, but not when prices are soaring into double-digit annual increases like they are now. First-time buyers are particularly in danger of being priced out of the market. “Affordability is going to be a key challenge in 2021 for first-time buyers,” Hale said.

Wolf added that education on down payment assistance programs will help would-be buyers find a purchase path amid higher prices. One positive sign: 60% of millennials are saving more money this year than last year despite the economic downturn, according to Zonda research. Millennials also say part of their increased savings will go toward a down payment.

As for the Las Vegas Valley, inventory is pretty tight in most categories (except luxury, and high-rises) so, for most, it is an amazing time to be a seller!

Do you have a need for commercial / industrial / retail buildings or land? Are you ready to buy or sell a home? We can help you with that, safely… just call us at 702 SELL NOW or click on this link to my website http://www.702SellNow.com

Choose to have an amazing day…. Jeff

HUD Offers Guidance to Sniff Out Fake Assistance Animal Requests

For the last couple of years I have seen so many so called “service animals” in places that pets do not belong, however the owner has a certificate that says Fido or Fi-Fi can go with them almost anyplace…..well here in 2020 this is about to change.  Hooray!!!!

The last time HUD released guidance on assistance animals was in 2013.  However HUD has released NEW guidance “Assessing a Person’s Request to Have an Animal as a Reasonable Accommodation Under the Fair Housing Act” on January 28, 2020 and replaces the previous guidance. It outlines what information a housing provider can request and consider when deciding to grant a reasonable accommodation.

Of course those with disabilities, assistance animals are an intricate part of their lives. However, in recent years there has been an increase in people abusing this area of the Fair Housing Act by saying their animal is an assistance animal when it truly is not. By releasing this guidance, HUD is attempting to address this fraud to ensure the proper accommodations are available to those who truly need them.

Property owners have struggled with how to enforce no-pet policies on their properties with the growing number of renter requests for assistance animals. That’s why the housing market is welcoming the U.S. Department of Housing and Urban Development’s newly released guidance and clarity on how to comply with the Fair Housing Act when receiving a request for an assistance animal.

News reports in recent years have grown accusing some renters of using dubious third parties over the internet to buy certifications or registrations that say they need an emotional support animal.  Under HUD’s new guidelines, released Tuesday, landlords and property managers now can require reliable verification of the tenant’s need for an assistance animal and can require documents other than an online certification.

A person with a disability may require the assistance of an animal to help do work, perform tasks, or provide therapeutic emotional support. The requested accommodation must be met if it affects that person’s major life activity and serves as a reasonable request. HUD’s new guidance offers housing providers step-by-step practices for complying with the Fair Housing Act when such requests are made.

Vince Malta, president of the National Association of REALTORS®, stated “This law exists to protect millions of Americans with disabilities who rely on the support of their assistance animals—like those living with depression, military veterans suffering from PTSD, and countless other deserving individuals.  But as NAR has stressed to HUD over recent months, these protections are jeopardized when a small minority seeks to exploit weaknesses in the system.”

NAR welcomed HUD’s new guidelines for moving to stop fraudulent use of assistance animals while protecting the rights of those who require one. The guidance also includes information on the type of animals that are usually appropriate as well as best practices for when the requested animal is not a typical one used in accommodation situations.

“Countless Americans rely on assistance animals to fill a void, providing individuals with disabilities with the means to have a home that supports their quality of life,” says HUD Secretary Ben Carson. “In my many discussions with housing providers and residents impacted by the need for assistance, I recognized the necessity for further clarity regarding support animals to provide peace of mind to individuals with disabilities while also taking into account the concerns of housing providers.”

Just a note from me – I know everyone loves their pets; however not everyone loves your pet. Shopping for a new home? Please leave your pet at home – you do not know if the present owner of home has allergies and the dander your pet leaves can cause harm to someone. Also, you should never bring your pet with you to someone’s home unless invited with that pet. It’s polite to ask first. Why? Well, when you bring your dog to my house and I won’t let him in because our cat doesn’t want him in… you’re going to have to leave and take your dog home… and you’ll miss the puck drop.

Do you have a need for commercial / industrial / retail buildings or land? Are you ready to buy or sell a home? Do you want 3 cash offers? We can help you with all of that… just call us at 702 SELL NOW or click on this link to my website http://www.702SellNow.com

Choose to have an amazing day….Jeff

The 10 Most Promising Real Estate Markets

The National Association of Realtors just released a report identifying the top 10 metro areas it expects to appreciate in the next 3-5 years; taking into account several variables, including domestic migration into the area, housing affordability for new residents, attractiveness for retirees, consistent job growth outperforming the national average, age structure of the population, and the area’s home price appreciation.

In alphabetical order, the markets are:

Charleston, South Carolina
Charlotte, North Carolina
Colorado Springs, Colorado
Columbus, Ohio
Dallas-Fort Worth, Texas
Fort Collins, Colorado
Las Vegas, Nevada
Ogden, Utah
Raleigh-Durham-Chapel Hill, North Carolina
Tampa-St. Petersburg, Florida

Do you have a need for commercial / industrial / retail buildings or land? Are you ready to buy or sell a home or investment property? Do you want 3 cash offers? We can help you with all of that… just call us at 702 SELL NOW or click on this link to my website http://www.702SellNow.com

Choose to have an amazing day….Jeff

What type of Homes are Trending with Millennials?

Did you know that Millennials actually make up a considerable part of the economy?   Their economic strength as a group seems to be growing every day. As of 2019, Millennials are making up approximately 37 percent of home buyers… even more than the Baby Boomers!  So what exactly are these Millennials buying, and what trends are growing along with their increasing representation in the market? Let’s find out.

First-Time Buyers – About 52 percent of Millennials who are buying homes are first-time home buyers. This makes sense for younger Millennials, but even older Millennials who were born in the 80s are also first-time buyers. Before buying, a large number of these Millennials were renting homes. By buying homes, they can enjoy the benefits of ownership and build equity for similar amounts (or in some cases, less) than they were paying each month in rent previously.

Family Homes -The majority of home-buying Millennials are buying single-family homes. This is in part because over 50 percent of them are either married or in long-term relationships.  This is interesting – in 2018 there were more married couples among home-buying Millennials than there were in any other generational group that was in the market for a house. A significant number of Millennials also have children under the age of 18 living at home, which increases the need for a family-friendly home.

Motivation to Buy – The majority of Millennials who have bought homes within the last year did so simply because they wanted to own a home of their own – and stop paying rent . Some wanted to own a larger home, be closer to friends and family or were moving due to job relocation, but the general desire to own a home was listed as a reason for buying. A lot of this came down to the opportunities that were presented; over 50 percent of Millennials report that it was “just the right time” to buy a home, while the second most common reason (that they didn’t have much choice and had to buy when they did) was only reported by around 10 to 15 percent of Millennials.

Back to the Suburbs – One big trend among Millennial home buyers is that they were buying homes in the suburbs. This wasn’t restricted only to Millennials; 51 percent of all homes purchased in 2018 were located in suburban areas or subdivisions. The Millennials fell pretty close to this statistic, with small towns being the second most common location. The majority of the homes Millennials purchased were previously owned.  The Millennials as a group are not moving into newly built subdivisions.

 

Biggest Factors – There are a number of factors that affected the purchasing decisions of Millennials. The presence of public transit or proximity to work was one major factor, with many Millennials trying to minimize commuting costs. Heating and cooling efficiency also played an important role. In general, Millennials were more willing to compromise on price than on a home’s condition, but only around 20 percent were willing to compromise on the distance of their new home from work.

Home Shopping Trends – By far, the majority of Millennials started their home search by looking online to try and find properties for sale. Around 15 percent spent even more time online than that, starting their search by researching the ins and outs of the home buying process before even starting to look at properties. Beyond online sources, Millennials trusted real estate agents the most for information about homes for sale.

Do you have a need for commercial / industrial / retail buildings or land? Are you ready to buy or sell a home? We can help you with that… just call us at 702 SELL NOW or click on this link to my website http://www.702SellNow.com

Choose to have an amazing day….Jeff

The iBuyer Breakdown

Are you being driven mad by phone calls from people wanting to buy your house?

Have you been seeing the ads everywhere and wondering what’s up with these so called “iBuyers”?

Well, I’ve got you covered. Check out the following video explaining what’s going on.

 

Don’t say yes too quickly and ALWAYS have someone in your corner to protect you!

If you have questions or are curious about how much your house is worth, don’t hesitate to call me.

Do you have a need for commercial / industrial / retail space? Are you ready to buy or sell a home? We can help you with that… just call us at 702 SELL NOW or click on this link to my website http://www.702SellNow.com

Choose to have an amazing day…..Jeff

Extra! Extra! Great News for Condo Buyers!

Looking to buy a condominium? You could be eligible for a government-backed loan by the FHA (Federal Housing Administration) with a lower down payment under new rules that were announced Wednesday.

The new regulation and policy guidance set a new condo approval process and allows for some individual condos to be eligible for an FHA mortgage even if the condo project isn’t FHA approved. The loans only require a 3.5% down payment and allow for lower credit scores than conventional loans according to The Wall Street Journal.

Officials said the new rules would make it easier for condo buyers to apply for FHA-insured financing and open up more mixed-use projects to FHA backing. “Today we are making certain FHA responds to what the market is telling us,” FHA Commissioner Brian Montgomery said. “This new rule allows FHA to meet its core mission to support eligible borrowers who are ready for homeownership and are most likely to enter the market with the purchase of a condominium.”

The FHA stated that 84 percent of condo buyers it backs had never owned a home before getting their FHA loan. Housing and Urban Development Secretary Ben Carson said the change will open homeownership to new first-time buyers as well as seniors. “Condominiums have increasingly become a source of affordable, sustainable homeownership for many families and it’s critical that FHA be there to help them,” Carson said.

Only 6.5% of the 150,000 condo projects in the U.S. are currently approved for FHA’s mortgage insurance programs. Officials said the new policy, which will go into effect on Oct. 15, will open somewhere between 20,000 and 60,000 condo units to FHA-backed financing each year, which means more choices for home shoppers.

For an individual unit to be eligible for approval under the new rules, officials said it will have to be located in a completed project that is not approved. For projects with 10 or more units, no more than 10 percent can be FHA-insured. Projects with fewer than 10 units can have two FHA-insured units.

This is wonderful news for first time buyers that want to purchase a condo.

Do you have a need for commercial / industrial / retail space? Are you ready to buy or sell a home? We can help you with that… just call us at 702 SELL NOW or click on this link to my website http://www.702SellNow.com

Choose to have an amazing day…..Jeff

 

2018 housing numbers are in for the Las Vegas valley

LV-Appreciation-2018_Page_1

If you would like to see home price appreciation in the Las Vegas valley by zip code, just click here… before you do though… try to guess how much your zip code appreciated.

Was your guess close? Some areas appreciated by double digits!

2019 may (or may not) present a different picture. There are currently more than double the number of homes for sale compared to a year ago… and closed sales are down approximately 15% compared to a year ago. If you remember your economics class, when the supply increases and the demand decreases… well… that changes things.

What do you think will happen to home prices in 2019 in the Las Vegas valley?
Comment below.

Are you ready to buy or sell a home? Do you have a need for commercial / industrial / retail space? We can help you with that… just call us at 702 SELL NOW or click on this link to my website www.702SellNow.com

Choose to have an amazing day….Jeff