week in review

Financial Markets

The Dow Jones rallied Friday and ended the day up 259 pts.  The Dow was up 1.4% for the week and up 5% for the 2011 year.  The stock market’s struggle to reach consistent gains probably has a role in the Southern Nevada real estate market and could partially explain the abundance of cash buyers in our market.  As an example, $100,000 investment in stocks, assuming we work off the Dow Jones performance as an average, would net a return of $5,000 for the year…Take that same $100,000 initial investment used to purchase a home in Las Vegas for cash, rent it out for $1,000 per month, deduct $250 per month for taxes, insurance and maintenance, and the investor earns roughly $9,000 per year, or 9%.....I won’t even bring up the “A” word.  (Appreciation) but certainly has an added benefit to the investment.

Southern Nevada Real Estate and Economy

Below is an interesting article in the RJ that breaks down the foreclosure numbers in Southern Nevada.  The statistic that stands out to me the most is that roughly 100,000 homes have been foreclosed on since 2007, which is 18% of the existing homes, or nearly 1 out of every 5 homes.  Experts say we are about ½-way through the foreclosure crisis, so in the end, it could be said that 1 out of every 2 homes would have been foreclosed on from 2007 to 2015.  I can’t imagine we would see anything like this in our lifetimes. 

http://www.lvrj.com/business/new-analysis-shows-foreclosures-still-plague-parts-of-valley-133764798.html

On a much lighter note, according the blog below, the Clark County Commission approved a 26 acre water park located a few miles south of the strip and is expected to open Memorial Day 2012!?...This has nothing to do with Southern Nevada real estate that I can think of other than added tourism and something fun to do with our kids during the hot summer months…I take that back, it could lead to an uptick in tourism, providing for an uptick in profitability for the casinos, prompting them to increase hiring thereby lowering unemployment rates which would lead to an increase in real estate sales.

http://lasvegasblog.harrahs.com/las-vegas/las-vegas-to-get-new-waterpark-in-2012/

week in review

Primary Residential Mortgage now allows buyers who paid cash for their home to pull cash out without a waiting period.  This can be a useful tool for you if your clients are interested in leveraging against homes they recently purchased, to purchase more.  As a reminder, we also allow up to 10 financed properties. 

Financial Markets

The Dow Jones lost roughly 250 points for the week, primarily due to fears of the stability of Greece within the European Union.  Greece faces a vote that could eliminate the nation from membership of the EU, which could lead to higher concerns that the country would default on its debt.  On the domestic economic front, the October employment report was released, showing 80,000 jobs created in October, slightly less than the 95,000 jobs expected by analysts.  Both the stock market and bond market are expected to be very choppy this coming week and we can expect mortgage rates to be active in its movements.    

Southern Nevada Real Estate and Economy

Below is an article in the RJ about Bill 284, which essentially requires banks to provide documentation demonstrating that they have the legal right to exercise the power of sale.  The affect from the bill passing has been astounding.  The article goes on to say that in the first 3 weeks of October, there had only been 116 notices filed as opposed to the over 3600 filings in September of 2011.  It is probably too early to speculate what the long-term effects of the bill will be, but simple economics would have to suggest that there could be fewer transactions per month as a result of the lack of inventory.  On a positive note, with less inventory available, and a growing pool of buyers ready to buy, it would pushes prices up. 

http://www.lvrj.com/business/new-state-law-slows-banks-from-starting-foreclosures-133222718.html