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Arina S. Hanciulescu

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Buyers who wait in 2008 will stand in line in 2009

03-03-08
Arina S. Hanciulescu

Las Vegas' neighborhoods are still recovering from the slump caused by overbuilding, speculation and subprime lending. Foreclosures line the streets and planned luxury high rise condos on the Las Vegas Strip are incomplete or sitting vacant. Looking ahead, changes to the job market and lending industry are about to put new pressure on Las Vegas' housing market.

Las Vegas economy is unique and has a life of itself as every impact comes from the Casino, Gambling, Entertainment and Tourism industries. History has shown the Las Vegas economy rebounds from any economic slump when the Strip goes through a building boom. Las Vegas has its own way of surviving economic downturns -- build more Strip resorts. And Las Vegas Strip goes through a building boom. To name only few of the giant projects:

  • The Fontainebleau Las Vegas is taking shape on Las Vegas Boulevard South near Sahara Avenue. The project is to open in 2010 with some 4,000 hotel rooms and condominiums.
  • Some 40,000 new hotel rooms are in phases of planning and construction along Las Vegas Boulevard that will keep a construction work force employed through 2012.
  • CityCenter development on the southern end of the Strip between Bellagio and Monte Carlo. The 77-acre site includes a 4,000-room hotel-casino, three boutique hotels that will include high-priced residential condominiums and a luxury condominium-only development. The hotels and condos will connect with a retail, entertainment and dining complex. When it opens, it is expected to provide jobs for more than 12,000 workers.
  • Trump International Hotel & Tower is expected to open on March 31st.2008, with 1,282-unit, but the project does not include a casino.

And the list can go on... The increase in Strip resort translates into employment demand not only in Casino-Gambling but more jobs in other areas: professional services, retail, commercial services -- all needed to service an increase in the Las Vegas Valley's population.

Experts are predicting that, considering all the characteristics and trends Las Vegas exhibits, at the latest end of 2009 a major shift will turn the housing industry around. So far the best time to invest in the current market will pay off later... Buyers who wait in 2008 will stand in line in 2009

Read more about what experts are projecting for Las Vegas economy, http://www.lvbusinesspress.com/articles/2008/02/05/news/iq_19267417.txt

ARINA

 

ELITE REALTY
7448 W.Sahara Ave. #106 • Las Vegas, NV 89117
Office: (702) 856-6680 • Cell: (310) 529-5360

Website: http://www.lasvegas-buyandsell-realestate.com/ • Email: arina.lv@gmail.com

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Why is the current real estate situation in Las Vegas so different...

02-09-08
Arina S. Hanciulescu
Coming across of a brilliant article "Las Vegas Housing Market: Causes of the Current Situation" by Jim Noteware prompted me to summarize the points that creates a clear picture of the uniqueness of Vegas housing market.

There is a lot of talking about Las Vegas housing market, attitudes range from confusion to denial to dismay. The real estate in apparent oversupply by itself creates a general concern and confusion. But the oversupply is not the only cause to the housing increasing decline. The correlated factor the demand is declining as well.

"When a market reaches its top, more buyers decline to purchase, and volume slows. Sellers are reluctant to acknowledge the new reality and usually refuse to reduce prices, with the exception of motivated sellers (this factor is a subject of an other analyses) Generally in a declining market no one can sell because no one will buy. In reality buyers simply do not buy at today's price if he believes that tomorrow's price will be lower." says Jim Noteware

"So, instead of supply and demand adjusting as a function of lower prices, market activity simply stops."

Three primary causes can be credited to the current real estate declining: overbuilding, media confusion, and buyer skepticism.

Overbuilding, Overbuilding is the most important factor and also the cause of the other two. Las Vegas exploded in building housing developments, all over, in an unprecedented rate. Very simply we have built too much supply for the level of demand. The builders were in an constant race for, more, bigger, better more attractive projects... they simply popped out like mushrooms over the rainy days.

A more important question is, perhaps, why did we build so much inventory? The answer is simple and has several elements:

  • First, demand was so strong for to long True, we all believe in the growth story. And even in the face of increasing in-migration (from about 4,000 people per month to about 6,500 per month this decade), we overbuilt even for this increasing level of new population!
  • The second reason is the presence of investors in the market.... And the investors showed up at the gates of Vegas in massive numbers... the land of opportunities in 2002-2004. Those investors never really expected to occupy the units they contracted to purchase, just sell them to someone else who would. For a time-a long time, actually-this worked. The investor presence in the market grew with the market.

Combining the RealtyTrac figures with data from the Clark County assessor’s office, the analysis found that 74 percent of all single-family homes in foreclosure during the past six months were owned by investors who did not live in the homes.

"In total disproportion with the real demand we accepted them as part of the actual demand. But now this condition have changed and they all are almost gone accentuating the supply on the downside of the cycle. So, we are now left with this overhang of inventory which has caused downward pressure on prices and longer times that houses remain on the market." says Jim Noteware

Media Confusion, The national media in particular - are now full of stories about Las Vegas and compare our situation to the gloom and doom of prior recessions.

We must acknowledge that the media have a special place in their heart for Las Vegas. Las Vegas is "Sin City" and much of the Strip's entertainment is based on fantasy... This gave the national press a feeling that the local industry behaved as a roulette wheel, and real estate success was a game of chance instead of the hard work and correct decisions.

With the typical rush to judgment and poor expertise in the field, the media venture all type of predictions and forecasts. One day we read that prices falling is bad news; the next day we read that Las Vegas prices have gone so high that they are now beyond anyone's ability to pay them, and that the bad news is high prices. So, which is what?

The media would argue that they base their reporting on housing's contribution to the economy, including: employment and credit.

  • Employment: For the past 10 years, housing became the biggest factor in the local economy because of its direct (construction workers) and indirect (materials and equipment) employment. As housing starts decline, not only do construction workers lose their on-site jobs, but a lot of related business: building appliances and carpets cut workers, too.
  • Credit: The media are reporting to the exhaustion stories about how foreclosures are rising in many markets, including, of course, Las Vegas. But, are these foreclosures a housing problem or a credit problem?
Many have purchased houses beyond their means through relaxed mortgage instruments (interest-only loans, negative equity loans, etc.) which also were created in part by the Federal government's backing of Fannie Mae and Freddie Mac. That stays at the core of the credit crises of today.

Buyer Skepticism, Buyer hesitancy will last until buyers conclude that conditions are turning around once again, and they should not wait because prices are once again increasing. So, far for the moment buyers seems to be stuck in a deep skepticism...

- Alexandra H - (webmaster & writing contributor)

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It's your investment; don't take chances...Did your Real Estate Agent Read Your Condo Contract?

02-03-08
Arina S. Hanciulescu
The process of buying a new Las Vegas luxury high rise Condo or Hotel Condo is different than the resale process where the seller and buyer are working with standardized contracts.
Upon requesting to buy of a high rise condo or hotel condo the developer issues a  purchase contract directly to the buyer. Usually the developer should have sent it simultaneously to the buyer and procuring real estate agent... But so many times they don't.
The buyer should discuss with their real estate agent or contact other professional services such as their legal or accounting advisers to reviews the purchase contract. After careful and well documented review the buyer accepts or rejects the purchase contract and sends it back to the developer for reexamination. Later  the buyer's procuring real estate agent receives the new contract as executed by the buyer and developer.

In order to protect the buyer's interest in the process it is very important

  • The buyer should inform their procuring Nevada real estate agent upon receiving the purchase contract.

In 2004 and 2005, many buyers were racing to get their deposits to the developer in order to not lose their purchase opportunity. Without informing their buyer’s agent they received a copy of the contract then the buyer agent has no way to participate in the contract review process with their buyer.

  • The buyer should seek professional counsel from legal and accounting advisers regarding this Las Vegas luxury condo or hotel condo purchase contract. 

In Nevada, the real estate agent cannot practice law or accounting services without a license.  That real estate agent must advise their buyer to seek the necessary professional services.

  • The buyer should read carefully the recession period, Home Owners Association governing components, the non-refundable deposit money and default clauses.
  • Make sure that the executed purchase contract doesn't contain errors in names, spelling, procuring brokerage, amendments (if provided by the buyer’s legal counsel) and other problems or revisions are discovered. 

At that point in time, it is not an easy process to make revisions to an executed purchase contract with the developer.

  • When the buyer nears close of escrow, usually two or three years after the initial purchase contract execution, the current real estate climate, lending situation, financial status, and many other factors come into play.  In 2008, these are clearly challenging times unlike the crazy real estate world of 2004-2005.
  • The buyer's financial behavior during the two or three years it comes into account. Did they buy expensive cars, buy multiple investment properties, get into debt, have life changing situations such as divorce and experience other financially challenging situations during that period?

Many thinks can take place and life challenging stories can change the basic financial liabilities. Some troubled buyers of luxury condos or hotel condos, it appears to have some are financially challenges... Some gambled with hopes of a quick flip at closing as they couldn’t carry the condo more than a couple of months. 

2008 is going to be a challenging year for the Las Vegas Strip resale market. The resale high rise market has over corrected, it'll take some time before resale catch up with pre-construction pricing.
The Clark County tax assessor recently reported that Strip land increased in value 43% in 2007 while Sky Las Vegas' land increased 59%. Even more shocking, the land under Sky Las Vegas has increased 800% in four years.

Nevada has been renamed the fastest growing state in the country by the Census Bureau. Nevada held this title for 18 years until losing to Arizona for just one year. Analysts believe Nevada will hold the title for a long time to come due to over $40 billion worth of new mega-resorts, a booming economy, and job growth.



This is a rapidly changing market with projects and inventory changing daily, for the most up-to date information call me

Arina Hanciulescu
ELITE REALTY
7448 W.Sahara #106
Las Vegas NV.89117
702-856-6680
mailto:arina.lv@gmail.com
 http://www.lasvegas-buyandsell-realestate.com

 

 

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Monte Carlo Hotel... on fire!

01-25-08
Arina S. Hanciulescu

On Jan.25 around 11 a.m. the fire started at the Monte Carlo Hotel & Casino on Vegas Strip. The fire started on the roof of the building. The fire is burning on the west side of the hotel along the top floors sending black flames of smoke into the sky. Monte Carlo Hotel Fire in Las Vegas

Fortunatelly with less than 1.30hr. the fire was contend and reported damages are only to the exterior of the building

All drivers are being urged to avoid the resort corridor. The Las Vegas Strip as well as exit ramps off of I-15 are closed.

The MGM Mirage owns the casino. The Monte Carlo is a 3,000 room resort opened in 1996.

A live video of the whole ordeal is here.

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The art of building relationship with your clients...

01-13-08
Arina S. Hanciulescu

Buying a home (specially for the first time) is an powerful personal experience. You may never forget the agent who sold you the first property... And even down the road your real-estate agent is someone who you'll keep in your mind for long time. It is an emotional moment in life associated with the most cherished dream for many people.

Keeping good relations with clients is very important for real estate agents. If a client is satisfied with you, you have better chances of another deal with that client.
Satisfied clients also send their friends and relatives to you, which is a clear indication of the level of their satisfaction with your services.

How to establish long lasting relationship with clients:

First of all your relationship doesn't stop when a deal is closed, do not forget your clients. Like any relationship, either personal or business, needs your careful dedication. Try to stay in touch with them and do not miss any opportunity of further growing this relationship.

Create a mailing list with all your clients addresses, emails and personal informations(don't forget their birthday...) send them greeting cards for special occasions, give it a personal touch by congratulating them when their son completes his studies or their daughter moves to the first grade and keep in touch with them. Make them feel important to you and do not forget that if you are taking care of them they would not consider switching to another real estate agent.

Overwhelmingly statistic shows that satisfied clients will return to you for services and recommend to other friends, coworkers or family.

Chart according to: NATIONAL ASSOCIATION OF REALTORS® Research Division December 2007

ARINA

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