In the last two blog posts
Las Vegas real estate market 2012 Part 1
Las Vegas real estate market 2012 Part 2
?I have explained what Las Vegas real estate analysts base their analysis and predictions on and why they are wrong. The proof is in the current Las Vegas real estate market. ?As I wrote, we currently have less than 1390 foreclosures that are listed in the Las Vegas MLS that are not under contract and new listings go under contract awfully quickly.
Below is other controlling factors which are not fully discussed by other Las Vegas real estate analysts:
1: Las Vegas residential real estate is at least 15% undervalued as I have discussed in previous blogs, see the blog about Case Schiller Graph of Las Vegas home prices which you can see in
Why you should invest in Las Vegas real estate in 2011
All other Las Vegas real estate analysts predict a 10% decline in the meaningless median price in 2012. However, watch them change their tune shortly since recent newspaper articles have reported 2.5% increase in this meaningless median price. They will say they saw it coming a while ago, when months before they predicted a 10% decline just a few years ago!!!
I can?t talk with authority about the median number since I do not track all listings all over Las Vegas. However for the part of W. Las Vegas that I do track carefully, I predict at least a 10% appreciation in the $70,000-$200,000 price range for single family homes based on COMP over COMP method, which is the only way to arrive at a correct result.
What is comp over comp? Comparing how much a 4 bedroom 2000 square foot home in subdivision X in Las Vegas has sold for in the beginning of 2012 and the end of 2012. That is comparing the price of the same floor plan in a sub-division.
This is not the first time I have gone against all these analysts put together, nor will it be the last. What can I say; I am a warrior, really!!!
3: Home pricing in Las Vegas is mainly controlled by 5 major financial entities. They are Fannie Mae, Freddie Mac and Bank of America, and to a much lesser extent Wells Fargo and HUD. The rest are just bit players. Keep in mind that these ?banks? do control foreclosure pricing and have to approve short sales, non-distressed pricing follow the other two. ?If these banks play their cards right (yeah that would happen!!!) we could possibly see significant appreciation this year.
4: The new law (AB284) which took effect on Oct 1st, 2011 requires that?anyone filing a Notice of Default (NOD) in Nevada must?provide and include an affidavit stating that they are in possession of the actual note and deed of trust and that they have the authority to foreclose on the subject property, and this is the way it should be.?
There was a lot of noise that this will halt foreclosures in Nevada. Although Notices of Default went down by 70%-80%, foreclosing on properties didn?t fall nearly that much.
One of the reasons that I waited to do a real estate market report for 2012 was to see the actual effect of AB284, here it is:
| Foreclosures from | Sold back to the bank | Sold to third party | total |
| 1/1/2011-3/1/2011 | 3700 | 1015 | 4715 |
| 1/1/2012-2/29/2012 | 2115 | 1470 | 3625 |
?As you can see the total number of Greater Las Vegas foreclosures has dropped only by 23% in the first two months of 2012, however the all important number of foreclosures going back to the bank most of which would be listed in the Las Vegas MLS is down by 42% and that is significant, but the sky didn?t come down. The significance is due to the low number of foreclosures in inventory right now which is estimated at below 7000, including current listings in the Las Vegas MLS.
5: Nevada will receive 1.5 Billion from the bank settlements and another 750 million from Bank of America, some of which (Lord knows how much) will go toward cutting principal and other foreclosure assistance. Believe me this isn?t much but it will have some effect on our real estate market. Add up all these factors that I have discussed and you will see that our real estate market can?t really be only dependent on how many homes are under water or the unemployment numbers in Nevada.
Las Vegas real estate market is dynamic, not static and new factor come to play all the time.
However the overwhelming factor is Las Vegas real estate is undervalued and at this point, one of the safest investments on earth that give the investors a great shot at double digit return on the money in 5 years and this is the reason why Las Vegas broke the all time sales record last year and will smash that this year.
I have had great feedback from Las Vegas real estate investors on the 4 videos that I recorded about how I pick some of the best Las Vegas investment properties for my clients so I will repeat them here
Picking the best Las Vegas investment properties part 1
Picking the best Las Vegas investment properties part 2
Picking the best Las Vegas investment properties part 3
Picking the best Las Vegas investment properties part 4
?Las Vegas real estate market 2012 is a multi part blog I will get into some statistics next.
Source: http://www.lasvegas4us.com/wordpress/2012/03/26/las-vegas-real-estate-market-2012-part-3/
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