Kind Of A Downward Spiral In Las Vegas
The Chicago Tribune reports on Nevada. “The upscale San Niccolo neighborhood to the south of this city’s bustling Strip once offered the real estate equivalent of the town’s loosest slots. The guy who sold Karen Lewis her house for $435,000 in June 2006 raked in a $200,000 profit after holding it less than two years, she figures. ‘Houses were really cheap. Loans were really easy,’ said Lewis, who moved from California. ‘These were investors who didn’t ever live here. Now, they’re totally walking away.’”
“Those who failed to cash out ahead of the bust have left owner-occupants such as Lewis stranded in a lonely landscape. Almost half of the 30,000 homes listed for sale in the Las Vegas metropolitan area stand vacant, making it that much tougher to sell the rest, said Frank Nason, president of Las Vegas real estate firm Residential Resources.”
“‘It’s kind of a downward spiral,’ he said. ‘In the next year or two, it could get a heckuva lot worse.’”
“From her front door, Lewis stares across Arcata Point Avenue at the for-sale signs on two abandoned houses in foreclosure. The house next door stood empty for months as well.”
“Lewis said she intends to stick it out. Anyway, she added, ‘I’m sort of stuck. If I were to move, I would take a bit of a loss.’”
In Business Las Vegas. “Las Vegas Realtor Eric Young prides himself on being a numbers guy, and when it when comes to the local housing market, the numbers paint an awful picture.”
“In the last six weeks, the average home prices are down 2.6 to 3.5 percent, Young said. The price per square foot that many homes are selling for today is the same as it was in early 2004 when the market was still appreciating, he said.”
“‘It is far worse than the numbers are showing,’ said Young, echoing what a few others have been saying about statistics on the housing market. ‘If you start to dig into the numbers, the research shows the prices for the same home are declining greater than the averages are showing.’”
“A North Las Vegas house a client bought a year ago for $399,000 couldn’t sell for $350,000 Young said. Comparable homes sold for $310,000 to $320,000, prompting the owner to take it off the market, he said.”
“A home the same person sold a year ago in North Las Vegas for $320,000 is on the market today for $247,000, Young said.”
“‘We continue to see an increase in listings every single day,’ Young said. ‘The supply is growing and the number of closings are declining every month. We now have a situation where you have a breakdown in the mortgage market. It is difficult to see when that will turn around. Clearly the market is not going to turn around until the mortgage situation is straightened out. And the easy credit is never coming back.’”
“The high rise and mid-rise condo markets continue to weaken as demand has softened and supply continues to increase - a problem that will worsen as more and more projects come on line in the next year, analysts said.”
“Las Vegas is facing problems that are emerging in other markets and are a byproduct of the speculative boom of 2004 and 2005. Buyers who signed contracts two to three years ago may not be able to close when those projects are completed. In some cases, they may not be able to get financing from lenders and in other cases buyers may walk away.”
“‘We are hearing the potential that some of the units aren’t going to close,’ said John Restrepo, principal of Restrepo Consulting Group that tracks the condominium market. ‘Some people are walking away because of the credit markets or because what they agreed to pay is not what they thought it would be worth today.’”
“There are 5,849 luxury condominium units in Las Vegas and another 14,149 units under construction, according to Applied Analysis. By the end of the second quarter, 718 resale luxury units were on the market, Applied Analysis reported.”
“‘I hear from condo owners every single day. They bought it to flip it and they can’t sell it,’ added Eric Smith, owner of Colorado-based Corporate Housing By Owner.”
“Bruce Hiatt, co-owner/broker of Luxury Realty Group, said he expected a window of about 12 months in which there would be an oversupply of condos, calling it the ‘perfect storm.’”
The Las Vegas Business Press. “The Falconi Group recently named its third general contractor for the planned $740 million, 1,100-unit condominium-hotel development at Tropicana and Cameron avenues, across from The Orleans.”
“Dick Pacific Construction’s involvement has since lowered the project price by 13 percent. Pinnacle Las Vegas was cited as an $850 million development in July. Yet the basic makeup of Pinnacle Las Vegas hasn’t changed.”
“Pinnacle Las Vegas comes during a market adjustment with a glut of available inventory and several project cancellations. ‘Buyers want a prime location for the cost they are paying and they can get real good deals,’ said Bruce Hiatt, owner of a Las Vegas high-rise residential specialist. ‘If it’s not well-located and branded, projects are going to face challenges. There is about two years of resale market inventory.’”
“‘Only 12.9 percent of the market’s planned 27,268 luxury high/mid-rise condo units had been completed in the second quarter, whereas 49.5 percent had been canceled or suspended,’ says John Restrepo, principal of Restrepo Consulting Group.”
The Review Journal. “The drumbeat of bad news on residential mortgages continued, as the Mortgage Bankers Association reported that new foreclosures and past-due loan numbers increased in Nevada during the quarter ending June 30.”
“Bill Ochs Jr., owner of Nevada Mortgage, blames a large portion of the problem loans on investors. ‘Speculators and investors came from anywhere and everywhere just to see if they could make a fast buck (in Nevada),’ Ochs said.”
“Now, speculators are defaulting on mortgage loans, he said, mentioning one investor who allowed 40 single-family homes to go into foreclosure.”
“Southern Nevada’s economy, dragged down by the slumping housing industry, posted another month of modest performance. New and existing home sales dropped 40 percent and new home permits are off by 45 percent, contributing to a 0.11 percent decline in the Southern Nevada Index of Leading Economic Indicators.”
“The number of new residents moving to Las Vegas dropped by double-digit figures for the third consecutive month, to 6,168 in July. Seeing all the vacant homes, Andrew Pugh of SellFastLV.com wonders how many people are leaving Las Vegas, though he’s certain more people are coming than going.”
“‘It’s just unfortunate we can’t nail down the historical numbers and really figure out if the current numbers are changing significantly,’ he said. ‘My contention is that the lack of white-collar jobs and relatively high housing costs would eventually slow down the migration, but without good data, it’s hard to know for sure. Affordable housing was one of the big draws and now that’s pretty much gone, for now.’”
The Las Vegas Sun. “People lose homes in Las Vegas every day because they can’t pay the mortgage. But when real estate agents and brokers start hitting the wall financially, it perhaps is a sign of even more troubling trends in the home sales market.”
“Jimmy Dague, who has sold real estate in Las Vegas since 1978 and whose business was the No. 1 worldwide in sales for Century 21 from 2002 to 2006, filed last week for Chapter 11 bankruptcy protection from creditors while he reorganizes to pay off his debts.”
“‘This is the result of an exuberant market and us growing and, honestly, I had signed leases for nine offices. Now I have five,’ he said. ‘As you can imagine, the four landlords are not happy.’”
“A year ago, he said, 700 real estate agents worked in his nine offices. Today, he has five offices and about 500 agents. He also has cut 50 percent of his hourly staff.”
“‘Wow,’ said Jeremy Aguerro, principal of Applied Analysis. ‘Is it a harbinger, a sign that our economy is shifting?’”
“The causes? Home prices inflated beyond the means of those who would normally buy them, rising interest rates and a halt in buying by investors.”
“And in Dague’s words, ‘perception.’ ‘If someone thinks if they only wait a few months, they’ll be able to get that $400,000 house for $350,000, they’re going to wait it out,’ he said.”
“Are they right to do that? ‘Right now, they probably are,’ he said.”
2004 pricing …….hmmmmmmmm
anyone have an 2003 price ?
I’m holding out for the 1999 price.
–
Could you please back up a little. Thanks.
Jas
if this jxxxxx thinks we are going from 400k and gonna holdout for 350k he is crazy. we are going to hold out till 150k. that’s when properties will sell again.
Housing prices are down 2.6 to 3.5% and that is going to motivate who to buy, i suggest that the .6 and .5 must be the reason???
Housing Market Slump Forces Couple To Open Brothel
http://wcbstv.com/topstories/local_story_252232548.html
ROTFL
Well… we’ve been in agreement that “low cost sin” is a growth market in a downturn.
New Rochelle Police raided a 3-bedroom home on North Avenue Friday night after undercover officers responded to a Craig’s List posting offering dominatrix services with a grand opening special. Police arrested four alleged prostitutes and the homeowners.
Where does one start with that!
Richard Werner and Heather Mezzenga are charged with promoting prostitution. The two are both mortgage brokers who moved out of the house roughly two years ago so they could begin renovating a home on Mountain Road in Pleasantville.
Well, now we know what certain people do when the alligator bites…
Chuckle…
Neil
Pimped out FOREVER!!!
Got prostitute?
I wonder if they put out stupid cookies when the johns came over — cookies for nookie, if you will.
Pimps™ and Ho’s™, huh?
Pimp my house
Now that’s funny!
But they were mortgage brokers! I can’t believe they’d stoop to prostitution.
Wait a minute, maybe it’s career advancement.
They’re cleaning up their act
Trust me, prostitution is a step up for these folks.
Would their commission still be a tidy 6%?
Prostitution is a step up, they shouldn’t have sullied the reputation of the world’s oldest profession by disclosing they were mortgage brokers. (Ewwwww…)
At least a dominatrix prostitute requires skills and they ability to dress appropriately.
Neil
Authorities need to put a stop to this, having Real Estate Brokers associated with prostitution is just going to give prostitution a bad name.
No difference between a pro and a mtg broker. In both cases, J6P pays up front and gets F’d.
Pretty soon they’ll be trying out “creative finance innovations” like leveraged BJs, pick-a-payment gangbangs and orchestrating fake bidding wars using “straw-Johns” (do I need to even mention the “lay-away” plans?). Before long, the Fed, FCBS and hedge funds will sense the profit potential, get involved and cause the cost of “service” to triple. Most working-class Johns will be forced to choose between self-service or taking on 2/28 option-ARM whoretgages. Jealous Bitter Wankers will lament the day the brokers got involved.
And now one is gonna have to take out a loan to “F” one of these dames… as long as they get their 6%.
“The air conditioning was running all day and no one’s there,” he told us. “But at night there’s five, six, seven cars there.”
Honest…I was there 4 times last week and twice on Sunday, but that was to drop off more documents for my stated loan.
News Flash: Gamblers Lose Money in Las Vegas!!
Come on, people: Las Vegas is the Bermuda Triangle of Bucks.
“There are 5,849 luxury condominium units in Las Vegas and another 14,149 units under construction, according to Applied Analysis. By the end of the second quarter, 718 resale luxury units were on the market, Applied Analysis reported.”
“‘I hear from condo owners every single day. They bought it to flip it and they can’t sell it,’ added Eric Smith, owner of Colorado-based Corporate Housing By Owner.”
Speaking of gambling, what do you bet that the next big trend in LV is conversion of “Luxury Condos” to Hotel/Casinos?
Went to you url sm…great stuff. I am humbled to be in such good company on this board.
Smiles,
Leigh
60 day “no sale” clause after a listing ends ?
anyone heard of this ?
a FSBO blocker……
Yea, basically what happens is a Realtor contracts for a listing and then interested parties wait until the listing expires to make a deal. The 60 day no sale clause is defense against that tactic.
that is fairly standard IMHO, thats why if you’ve really done the homework, and have targeted houses that go de-listed, you can appoach in good faith typically 90 days after the sign leaves the yard to be safe. And always ask up front for information about the listing.
People are starting to listen to reason, but as before, the seller needs to match certain criteria:
1. They are not a FB (FSBO approach wont work)
2. They have to be in a position to really not want or not be able to take care of a home anymore (either through age, divorce, relocation)
3. They have to be realistic about what is your one and final offer. The offer should never exceed historic norms of Income and reasonable rent to value ratios.
Theses things are out there, and if you are a buyer, do some of your own legwork, and you will find a deal.
the no sale period applies only to those who have seen the house through the realtor - they can’t do a thing if you never contacted them while it was on the market
LV_Landlord - Where are you???
But, but… you promised us that LV was different and we were fools for thinking otherwise… How is that garbage can living working out for you…
I was just thinking the same thing. Remember back to the days when she was smugly telling us that she was sipping tea by her pool, basking in the sunshine, smiling to herself that all her rents were paid early? Maybe she’s the person mentioned in the article that let 40+ properties go into foreclosure?!
I sort of miss the old days when housing bulls would come on this site… kinda perked things up a bit.
I miss HFA (Hedge Fund Analyst) more than anyone. I remember how him and Get Stucco/Professor Bear used to go at it. I also remember one of his “you heard it here first” comments about “no recession until the 10-yr UST hit 9%” or something like that. Can we proxy default rates at 15%?
Yes I wonder if he is still drinking $500 martini’s in Manhattan? LOL
“Look, I hate to mention it, but life’s how you look at it, you know, if you see everything negatively, then your day’s gonna go that way, ya know? Ever heard of the Heisenberg Uncertainty Principle? Anyway, I’m tired of hearing about how many houses there are for sale on the market, it’s all in how you do the numbers, I mean, do you hear about all the millions of people who made it through the day without a car accident? Nope, all you hear about is that one horrendous 20 car wreck on the freeway, thanks to negative reporters. So, take a look around at all the houses NOT on the market, people DON’T wanna sell them, and there are plenty, and then you tell me Ben’s not just finding the negative news to report. People thrive on it. Housing bubble? Not in my neck of the woods. It’s different here, we’re optimists.” - Housing Bull
There, feel better?
What employment are you in that won’t be affected by the ”bubble”. Healthscare
Life springs eternal
On a gaudy neon street
Not that I care at all
I spent the best part of my losing streak
In an Army Jeep
For what I can’t recall
Oh I’m banging on my TV set
And I check the odds
And I place my bet
I pour a drink
And I pull the blind
And I wonder what I’ll find
I’m Leaving Las Vegas
Lights so bright
Palm sweat, blackjack
On a Saturday night
Leaving Las Vegas
Leaving for good, for good
I’m leaving for good
I’m leaving for good
Used to be I could drive up to
Barstow for the night
Find some crossroad trucker
To demonstrate his might
But these days it seems
Nowhere is far enough away
So I’m leaving Las Vegas today
I’m standing in the middle of the desert
Waiting for my ship to come in
But now no joker, no jack, no king
Can take this loser hand
And make it win
I quit my job as a dancer
At the Lido Des Girls
Dealing blackjack until one or two
Such a muddy line between
The things you want
And the things you have to do
I’m leaving Las Vegas
And I won’t be back
No I won’t be back
Not this time
“‘It’s kind of a downward spiral,’ he said. ‘In the next year or two, it could get a heckuva lot worse.’”
munch munch munch.
Ya think! When everyone knows they’re going to get rich on the same idea, no one does! Grrrr…. and yet so many people are still in denial as others go to desperation and capitulation. Hence why I think the market is “deer in the headlights” stuck in fear.
Got popcorn?
Neil
pass me some popcorn and some red vines… these is getting better everyday.
It was Robert Shiller who said “when a cab driver tells you to buy real estate, you know it’s too late.”
That’s really funny - I was in Vegas earlier this year and the cab driver did mention real estate.
Giggle. Neil, you’re gonna love this one. Here’s a guy with a new idea (reaching for aspirin).
http://www.lvrj.com/business/9686817.html
Smiles,
Leigh
Warning: may require aspirin…lol.
Expounding on Neil’s initial reaction…
{FB lying on ground, bleeding from wrists}
FB’s wife: “I’m sort of stuck. If I were to move, I would take a bit of a loss.”
{Chief Tax Appraiser, lying on ground bleeding from self-inflicted bullet wound}
Tax office staffer: “The research shows home prices are declining greater than the averages are showing.”
[Young lady lying on ground, bleeding from nose]
Young Stud: “I… I think she did too much coke.”
Colonel James: “Oh! You think so, doctor!? “
“Heckuva lot worse, Brownie”
Vegas; number one with a bullet. In a lot of ways.
I call Las Vegas ‘the tackiest place on earth’. If a home were free, I’d still decline to live there.
“My contention is that the lack of white-collar jobs and relatively high housing costs would eventually slow down the migration, but without good data, it’s hard to know for sure.”
Really? I think you know the answer…
Lot’s of empty homes second homes and “investment” homes. Still much cheaper than LA and the rest of Mexifornia. Nice place to retire of you like desert living. Prices still to high. 30% haircut I’d be interested in a vacation home. Still cheaper than SF. The Fed and polictians getting involved. Housing prices are going to stay high 3.4% decrease on 100% apprecation. Mortgage serfs are here to stay. Rent don’t buy in California.
Fear and Loathing in Las Vegas, w/o drugs
“A home the same person sold a year ago in North Las Vegas for $320,000 is on the market today for $247,000, Young said.”
W/O drugs?
“North Vegas, for instance, is where you go if you need to score smack before midnight with no references.”
Hunter S. Thompson, “Fear and Loathing In Las Vegas”
North LV makes any other part of Vegas seem like paradise…
“We were somewhere around Barstow on the edge of the desert when the drugs began to take hold.”
One of the greatest opening lines ever written.
“Dick Pacific Construction’s involvement has since lowered the project price by 13 percent. Pinnacle Las Vegas was cited as an $850 million development in July.
Dick Pacific Construction beat out Rick’s Remodel Construction for the job. Rick was shocked and had no comment.
Bargain Builder Bill didn’t even bid, as he knew he’d be filing liens against the developer when he didn’t get paid.
“…Almost half of the 30,000 homes listed for sale in the Las Vegas metropolitan area stand vacant, making it that much tougher to sell the rest, said Frank Nason, president of Las Vegas real estate firm Residential Resources…”
If you live in Vegas and have to have a home and you are not offering 20 to 30 cents on the dollar you are a fool. 15,000 vacant…sheesh.
Agreed, but you may want to wear a bullet proof vest as you go about it.
LOL, you are probably right. But I’m seriously considering using that exact strategy as soon as I can find a willing Broker in AZ for a parcel of land. Just get a list of properties that fit my criteria and offer 75 to 100k. See what happens… I just need to find a Broker circling the drain.
Would cash incentives given in the selling of a house in Vegas, be called “comps”?
A few years ago, a friend of mine tried to convince me to go half-and-half with him on one or two units in a condo development, Sky Las Vegas. I chewed on the idea for a while but ultimately it seemed to me that there wasn’t going to be much end-user demand for expensive condos on the Strip, and there was no way in hell we could charge anywhere near enough rent to cover the carrying costs, so I said thanks but no thanks. I think I dodged a pretty big bullet.
Now, speculators are defaulting on mortgage loans, he said, mentioning one investor who allowed 40 single-family homes to go into foreclosure.
People like that really ought to do some jail time. I doubt he told the truth on even one of the 40 mortgage applications.
What kind of system that allowed 40 mortgage loan to one person?
We American know how to get money from the Europeans.
unless all 40 loans closed on the same day or within a couple of days ago, blame the stupid lenders for making loans to this stupid guy. if they choose to, lenders can check public records all over the U.S. to see what properties a specific borrower owns. during the last few years most lenders didn’t give a crap. real estate only goes up, right?
‘Only 12.9 percent of the market’s planned 27,268 luxury high/mid-rise condo units had been completed in the second quarter, whereas 49.5 percent had been canceled or suspended,’
Only 49.5%, al least it wasn’t half!
“Clearly the market is not going to turn around until the mortgage situation is straightened out. And the easy credit is never coming back.’”
If that’s really the case, these prices are never coming back either. Wonder how long before people really accept that this “boom” was nothing more than consumer credit run amok.
The “mortgage situation” isn’t going to get “straightened out”, it IS straightened out; those who have the ability to get a conventional mortgage will get one….like the old days.
Of course that means that, in conjunction with “the easy credit never coming back”, that the supply of buyers is NEVER COMING BACK either.
So, yeah Lisa, the prices won’t stop declining until they reach the magic figure that conforms with general affordibility…..even then, a glut of supply will probably mean prices BELOW the level of simple affordibility. Schiller and others are talking 50% off to GET TO affordibility. In the places where supply has gone nuts, how are prices going to be supported even at 50% off (with speculators having been vaporized)?
Jag, wish you could’ve taken a ride with me and hubby yesterday in *God’s Country* (aka Wisconsin).
I’m an elloquent speaker, but due to physical limitations, can only type so much. So this is the short story.
We went to several open houses yesterday. We have cash and are not playing with peoples heads. We carefully research places based on our desires vs what they selling vs tax records etc.
SUPPLY and DEMAND. You nailed it. ALL accross America there is simply toooooooooooooooooo much supply.
In short, (this is getting longer…lol), people want outrageous prices. No, I’m not looking for granite and SS (too much work).
Just land and a reasonable ranch with a bit of land.
Thank goodness most had the grace to serve food or I’d would have starved and had blood thinned on too much aspirin. wink.
Leigh
What still amazes me is that people, “experts” and even economists still don’t grasp this problem. Only recently have we started to hear about “affordibility”….as if this was something other than a FUNDAMENTAL component of the equation.
Maybe the whole story is too involved to explain on a forty second bite of TV news but, for crying out loud, couldn’t someone of stature figured this out long ago?
I recently read where economists don’t much study housing or real estate….apparently its never been that meaningful to the economy. Somehow I think this episode will change that view forever.
“The “mortgage situation” isn’t going to get “straightened out”, it IS straightened out.”
You’re absolutely right. People who can’t afford the loans aren’t getting them. And bigger loans are requiring bigger downpayments and very high FICOs. None of this is “new.” It’s just a return to standards that were the norm 10 years ago.
Prices are sticky. The large gains are here to stay with some minor adjustments. It gives me no pleasure to report it…but its true. As someone who is a renter. I’ll never be able to afford SF.
The stages of real estate denial:
1. Real estate never goes down.
2. Real estate in California never goes down.
3. Real estate in the Bay Area never goes down.
4. Real estate in the West Bay never goes down.
5. Real estate in San Francisco never goes down.
6. Real estate in good neighborhoods of San Francisco never goes down.
7. Real estate in Pacific Heights never goes down.
8. The real estate market has bottomed out…
Dude, you remind me of Eeyore
One thing not mentioned in the Las Vegas articles - is the amount of rental houses. They also need to note how many of these homes are being rented below carrying costs - ie loosing money every month till they can be finally be sold (dumped).
We’re only a short time into a rental in LV and our LL has just advised us he may want to sell. He did say he wasn’t covering his costs.
Great point! I wonder how much of the same thing is going on in Fl.? Represents hidden inventory and they can only hold on so long.
About 2 years ago there was an article here about a guy that had a lot and a trashy house some condo developer wanted to buy off the strip, and was offered around $1m and he turned them down because prices in LV only go up?
Here’s to you bud!
“The number of new residents moving to Las Vegas dropped by double-digit figures for the third consecutive month, to 6,168 in July. Seeing all the vacant homes, Andrew Pugh of SellFastLV.com wonders how many people are leaving Las Vegas, though he’s certain more people are coming than going.”
Anybody care to see how much a u-haul truck rental truck costs, LV to LA, LV to SLC, LV to Denver, and also the prices going the other way?
It should reveal that 6,168 a month coming into Vegas, is strictly a wishful #
Easy to check - Nevada DMV knows how many new residents get drivers’ licenses vs. how many former residents turn in their Nevada licenses in other states.
Not so easy to check, I’ve tried and so has the CBRE at UNLV. Unlike Nevada, many states do not report the number of licenses turned in, let alone from which state they came from.
Also, it’s unknown how many people move in and do not get new licenses or how many dependents are associated with each license.
Anyway, that’s why it’s difficult to prove or disprove any migration numbers.
I immediately thought this is a good thing that less people are moving to that god forsaken place. One should consider the ecological devastation thousands of people can unleash, especially mindless ‘consumerists’. Water shortages in Las Vegas and the west is a disaster waiting to happen/ Global warming is just starting to kick in.
All the FB’ers and Floppers in LV will be eventually consumed by the MWD or Los Angeles Dept of Water and Power. Why fight for water rights when you can permanetly kill competing usage by picking up half the valley and turning it back into permanent desert.
I see vast tracts of AZ and NV eaten up by cash rich So Cal water agencies. The cash strapped desert states will be hard pressed to say no to them. A perfect storm of Global Warming and debt.
In 20 years you will see a majority of LV casino labor commuting on high speed rail from So-Cal. LV will have only enough water to take care of the hotel golf courses industries.
Las Vegas will pay for Cali to build desalting plants. Already in the news. Still cheaper to drill wells now. In the future desalting is the wave.
Water Wars were a lot funner when I was a kid…
“It should reveal that 6,168 a month coming into Vegas, is strictly a wishful # ”
I track Vegas thru the MLS everyday, and I will try to report facts and not guesses. Prices are really crashing, but location, location, location still rules the day. That 6,000 new residents has been the rule for at least 50 months, and this figure is confirmed by the increased number of houses each month that have electricty turned on. I find about 2500 vacant houses thru the MLS, and this is backed up by less than 200 rental houses available in MLS. The 25,000 vacant houses must be builders inventory, and they might be able to keep prices up longer than resale homes. The one fact that I know is absolutely, positively true. There are $30 billion dollars of funded construction for new hotels and casino’s on the strip. Full service hotels and casinos
by the major hotel chains. Hotel vacancy is low, convention business is strong…and who do you know who has NOT been to Vegas. Bad times today, Yes. But nobody rolls through cycles like Vegas.
OT- could someone give me a synopsis of what “Rich Dad, poor Dad” is all about.
My brother in law has all of a sudden become interested in “passive income” from Real Estate after reading this book. I suggested don’t use any leverage at all for the next 2 years, and that rents and prices will drop.
Rich Dad Poor Dad is about common sense investing. Basically make your money work for you, specifically in investing in real estate.
The best thing about the book is that “your primary residence is a liability, not an asset”. Very true.
The book pushes cash flow and urges folks to find cheap real estate that can be rented for more than costs, building a portfolio of “passive” income (though it’s not really passive if you have to work to keep tenants happy, I figure).
Google - “Casey Serin” or “David Crisp”…
It’s a very basic book and a bit on the motivational side that can get someone headed in the right direction. But that can be said about lots of different books/seminars etc. Now would be a terrible time IMHO to start doing what Kiyosaki recommends unless you like catching falling knives.
There are plenty of other books and/or websites which provide much better information, whether it be real estate related or some other biz opportunity.
“give me a synopsis of what “Rich Dad, poor Dad” is all about.”
1. If you buy something, and it brings in money (rent, royalties, CD interest, whatever), it is an asset.
2. If you buy something, and it doesn’t bring in money, or worse, loses you money, it is a liability.
3. Buy assets, and keep buying them, and stop buying so many liabilities (boats, cars, Hummer H2s, boob jobs).
4. Real estate offers some tax advantages, so if you can find RE that is an asset, it can work out even better than other asset classes.
There, now you don’t have to buy the book.
—Anyway, she added, “I’m sort of stuck. If I were to move, I would take a bit of a loss.”
Karen, you paid $435K for a $200K house. . . your talent for understatement is remarkable.
Since Vegas is full of gamblers and empty houses it seems an enterprising casino manager would set up a lottery of some sort with a Vegas house as a prize.
This from cnn money is hilarious.
One of my best friends, a blue-eyed, red-haired stunner and a math whiz, is married to a builder and mortgage broker near Naples, Fla. She flew into town, and I had lunch with her today. “How is your husband taking all this stuff?” I asked her.
“He doesn’t sleep. At most he sleeps from 5 A.M. to 7 A.M. We built two spec homes near Naples. We spent $2.7 million on each of them. We had them listed for $4 million each. We haven’t had one prospect in a year. We lowered the price by a million each. Still no prospects. We’re losing $60,000 a month on the two of them. My husband has no business. None. The phone never rings.”
“Horrible,” I said.
“I’m leaving him,” she said. “He’s grouchy all the time. I want a guy who’s rich and cheerful all day and all night. Why should I have to suffer because his business is bad?”
“He’s your husband,” I said. “You have to stick by him.”
“Why? I want to laugh and have fun, and he’s in a bad mood for months on end. I didn’t make this mortgage mess, and I don’t see why I should have to suffer for it.”
“It won’t last,” I said. “It never does.”
She suddenly looked much more upbeat. “How long until the market turns around?” she asked expectantly.
“Maybe six years,” I said.
She looked staggered. “That’s it,” she sighed. “I want you to start looking for a rich husband for me who’s going to stay rich no matter what. Tell him I’ll be a really great wife.” (She has a killer sense of humor so I am praying she’s kidding.)
Twenty-four hours later, as I was driving to Malibu from Beverly Hills, I was called by a woman friend of 37 years who is a psychologist and marriage and family counselor in a suburb of Philadelphia. I told her the story about my friend who’s planning to look for a richer husband. She gasped.
“That could be a disaster,” she said firmly.
“Because she’s breaking up her family over money?”
“No, because what if she leaves him and the mortgage market and the spec home market suddenly turn around and he gets rich again and then she can’t find anyone as rich to marry next?”
“Good thinking,” I said.
“You have to be realistic,” she answered.
“We spent $2.7 million on each of them. We had them listed for $4 million each.”
And if they had just listed them for $3 million each last year they might have sold, but they were to greedy and now prices are falling and nobody will buy at those prices. But I guess $600,000 profit was not enough.
Well, that settles it. Forget getting a wife — I’m going to Vegas and getting one of those board-certified Prostitutes™. Much cheaper.
““Why? I want to laugh and have fun”
This, in a nutshell, is what Americans believe life should be about. We really are a nation of total children with absolutely no concern about finding meaning in life or passing on a better way of life to future generations. Sad, sad, sad.
Thank you for sharing. That was an interesting pair of anecdotes. I don’t mean to be critical, because I have lots of weird friends, too, but why do you hang out with someone who is so obsessed with money and finding a “sugar daddy”?
Sorry Tom. I should have read more carefully and seen the CNN Money reference. Thanks for passing it along. But my point about Americans being spoiled children still stands.
Hey, gang, I need your advice on something.
I’m going to be doing a volunteer project this week, and it’s going to be one in which I’ll be working with a lot of real estate agents. Did this same project last year, and that gig also included working with the agents.
It’s just for one day, but you know me. I’ve got a troublemaker on my face. It’s called my mouth.
Think I should change the subject if they broach the topic of real estate? I mean, I’m not in the market for a house, thanks to you-all. Or should I just go ahead and talk with them?
LOL, let’em have it. You’ll enjoy it.
Hi Az. Love that trouble on my face and it’s my mouth! LOL.
Seriously, only if they ask. And they seldom do! Perhaps rant here, and smile there?
Good Luck,
Leigh
You need to mess with them, Slim. Ask them how long they’ll survive, how much of a dive, stuff like that. I’m sure you can do it in a nice way, so go for it.
Just be polite, and mess with them all you want.
Why don’t you pretend that you’ve decided to change career and become an agent. Lets see what they say
Thxs Blano & carlivar.
Tom, most of the stunning women I have met have been in Realestate, but there was that one in ……. or the ex-doctor’s wife….. or how could I forget that ex-cheerleader!
“Clearly the market is not going to turn around until the mortgage situation is straightened out. And the easy credit is never coming back.”
Good Gollum: Go away, and never come back.
Evil Gollum: What?
Good Gollum: Go away, and *never* come back.
Evil Gollum: What did you say?
Good Gollum: Go away, and NEVER come back!
(Silence)
Good Gollum: (Dancing around) Free, free, Smeagol’s freeeee!
LMAO!!! Ha ha ha ha!!!
http://www.leg.state.nv.us/NRS/NRS-598D.html
Should have quit early in the 21st Century, in my opinion…
“Jimmy Dague, who has sold real estate in Las Vegas since 1978 and whose business was the No. 1 worldwide in sales for Century 21 from 2002 to 2006, filed last week for Chapter 11 bankruptcy protection from creditors while he reorganizes to pay off his debts.”
True stories from the last 24 hours of my life.
I sat next to a guy on the plane last night on my flight back to Denver from Chicago. We started talking and I asked him why he was flying to Denver. He said that he and his partner (seated a row away) has just purchased a Remax franchise in Chicago and they were coming to Denver for training on how to run the office. Ouch! Talk about terrible timing. Anyway, we started talking about the health of the market. He thought the prices would come down maybe 5-6% in Chicago and that everything would get back to boom times in 6 months. Then he said that they better come back or he just made the biggest mistake of his life because Remax charges an arm and a leg for franchise rights.
I smiled politely and wished him luck.
Now, here is the on topic Vegas story. The daughter of a co-worker lives in Vegas and “owns” a $400k condo. Their ARM just reset at the beginning of the month and their monthly payment increased by $900. They are walking out and leaving the keys at the end of the week because they were already living too close to the financial edge. This sounds a whole like like the first big wave of resets hitting the fan.
“He thought the prices would come down maybe 5-6% in Chicago and that everything would get back to boom times in 6 months.”
Amazing story. The mind boggles. You were extremely polite in simply wishing him well, but I would have been intensely interested in understanding why he thought that.
“He thought the prices would come down maybe 5-6% in Chicago and that everything would get back to boom times in 6 months.”
The Olympics - 2016?
May I?
BAAAAWAAAAAHAAAA!!!
And don’t forget that in NV purchase-money loans are with recourse. So they won’t be walking away that easily. Can you say BK or wage garnishment? Tough times ahead for many FB’s.
I wonder how many insolvent FB’s will do one of the following to escape wage garnishment:
a) create a new identity for themselves
b) flee the US (especially if they are “ill-eagle”)
c) other?
If the wage garnishment is significant they will probably not work and leave the state. Drop out and get cash work and collect welfare. Happens to divorced guys all the time.
I don’t understand how refinancing out of a teaser rate into a new loan was ever going to help anyone. It seems to me that the original loan was gong to be the best one that they were ever going to get. Can someone explain this?
They expected to refinance into another loan with another teaser rate, sort of like lots of people do with credit cards.
It works fine until … suddenly, it doesn’t.
Also …
Some people with bad credit convince themselves that they will reform their bad behaviour so they’ll have a good credit rating when reset time comes around that will enable them to refinance into a low fixed. But few seldom carry through with curtailing their spending.
I’ve always thought this the nonsensical financial flim-flams that get hocked on CNBC or around the office water cooler. When presented with skepticism or hesitation (”what happens when interest rates go the other direction?” … “what happens if house sales stagnate?” …. ), these advocates almost always respond with “Well, then, all you have to do is ….. “. All I have to do, huh?
This bubble, like the last one, confirms for me that — outside of one’s vocation — people should Keep It Simple Stupid. Their personal savings and investments should be simplified and follow simple rules. J6P is not an expert stock-picker, J6P is not a part-time real estate mogul, J6P is an expert on Federal Reserve monetary policy.
Instead, Joe Six Pack (and his neighbor Joe Bagadonutz) should: (1) save more, (2) don’t try to beat the market, (3) invest cautiously, (4) live within their means, and (5) understand that over the long-term, *most* people cannot manage high debt levels (above, say, 28%/36%).
Thanks guys. For some reason this has been bugging me for awhile. I guess it’s because interest rates were at 50 year lows, therefor I never could get how people thought they would get any better.
“Bruce Hiatt, co-owner/broker of Luxury Realty Group, said he expected a window of about 12 months in which there would be an oversupply of condos, calling it the ‘perfect storm.’”
Uh, Bruce? You misspoke. It’s years, not months.
Las Vegas is going to be a crater when this real estate mess clears out. 320K down to 247K, that’s a 24% drop and this has barely started..