$4500 dollars in free money to anyone who will trade in a perfectly good car that gets less than 18 miles per gallon. Most of these new car buyers will borrow most of the additional money needed to purchase one of these new more efficient cars. So far so good, more efficient cleaner cars on the road, more auto sales have to be good for the car makers and therefore jobs and the banks get to make more loans.
Of course the $4500 isn't exactly free, at least not to all of us as a collective group; we are the ones giving it away through our government.
Since when do I care about cars or government giveaways? I write about real estate.
New car loans will reduce the number of people we can sell homes to over the next few years. More consumer debt is and has been the problem.
Under the newer existing and newer yet to be completed financial consumer protection rules, underwriting standards for home mortgages are getting tighter.
Consumer debt to income ratios affect their ability to take out a new mortgage. Mortgage lenders will count the new car payment loan against the borrower. For some of the cash for clunkers buyers that will be taking on a new car payment, that additional debt will push their debt to income ratio too high to qualify for a new mortgage.
In order for the housing market to really open up, consumers must reduce debt, not increase it.The $8,000 first time homebuyer's tax credit and the cash for clunkers are two of the most direct to the consumer stimulus funding programs. Both will help get money moving again.
If you plan to use both programs, buy the house first. Let me repeat that, buy the house first. The auto lender will in general view home ownership as a positive thing. While the mortgage lender may use the new car loan as a reason to deny you a new mortgage.
Whether you qualify for the $8,000 first time home buyers credit or not, if you think you may want to jump into homeownership in the next couple of years. Take the time to talk to a mortgage lender about your debt to income ratio and what a new car payment will do to your ability to get a mortgage. Please do this before you run out and test drive that new car.
Chris W. Miller
ERA Brokers Consolidated
Mesquite NV 89027
702- 346-7200
435-862-5951
Mesquite MLS recorded 20% less total sales volume from the second quarter of 2008, contrast to Las Vegas where sales volumes are hitting all time records. Average asking prices for single family homes in Mesquite have not dropped much if at all, still around $348,000. While Las Vegas Median resale home price dropped to $125,000 for June 2009.
Notice of defaults, those falling behind on their home payments continue to increase as do foreclosures. Mesquite is unique in the sense that much of the housing in Mesquite was built and sold in the past ten to twelve years. Given the fact that much of the distressed property is selling for prices close to those of ten to twelve years ago, that puts virtually every buyer during the dozen or so booming years under water, those who paid more than they can now sell for at today's values. Many markets you hear about on the nightly news have owners who have been in their homes for twenty or more years, they can still sell at a profit. Mesquite has few owners with that luxury.
Not a single commercial property closed during this past quarter through Mesquite MLS. Did you know that one of the only two commercial sales in the past two years in Mesquite, was to The City of Mesquite, and they paid $118 per square foot or $3,858,000 (97.7% of asking price) and the building does not have a single tenant improvement. This struck me as odd since the City of Mesquite is a rather large land owner.
In planning and developing Mesquite, The City of Mesquite, builders, developers, and consumers have completely ignored any solar application, our greatest resource. Not a single builder offers solar applications, not a single subdivision has been designed for proper solar orientation, not a single incentive or example coming from The City of Mesquite in areas of sustainable energy efficiency. When it comes to recycling, drive the neighborhoods looking for the blue recycle bins, it is joke. These programs require promotion and examples starting at the top.
The number of retirees willing to mortgage their financial future and emotional well being for a larger home in a more prestigious gated expensive neighborhood is shrinking fast. The real demand appears to be trending to smaller, less ostentatious, more cost efficient, financially sustainable housing. This trend is likely to intensify. Studies indicate the peak birth year for the baby boomer generation was 1960; they will turn 50 next year. These of course are the Mesquite housing market target for years to come. Based on current statistics, studies also indicate this group will not be retiring wealthy, they will be lucky if they have a pension, their social security income benefits are in question, and relatively few have much of an IRA if at all. They currently are faced with kids in college, and aging elderly parents in need of assistance including financial needs. That home equity they have been counting on for years as a nest egg is now all but gone.
Today in the broader market of retirees, they are counting every penny and planning, purchase price is only one consideration. They are carefully evaluating costs of future property taxes, HOA dues and what the reserves must cover, ie: repaving streets, etc, SIDS special improvement districts, (basically bonds approved by the city to allow the developers to pass on to the consumers the costs of developing the neighborhood). Then they have fears of the great unknowns, health care, medical expense, inflation in the cost of living, etc. They are nervous about the security of their financial futures.
Everyday they become more keenly aware that more leverage (debt) is not the solution. This target market is going to demand, require, and accept housing that is smaller, comfortable, efficient, financially sustainable, and within their means.
Remember the small two bedroom one bath homes built in town across America after World War II? They raised families in those homes; we are talking about retired couples here.
Re-Branding Mesquite
The Rich, Rewarding, Wealthy, Palm Springs pitch of the recent past, which was interpreted by many as elite wealthy snobs living in an unaffordable over priced community is now going to be replaced with "The Nations Sports Destination". The City of Mesquite, council, and administration have opened escrow on a deal to sell around 900 acres of city land. They had to down zone it to be allowed to settle on the near give away price, and the re-branding term "The nations sports destination" shall become the new focus. What happened to the retirees?
Sports Center or not Mesquite's future depends on reaching out to and offering the average financially conservative retiree a truly sustainable and affordable place to call home.
Right now Mesquite has all the tools to create an opportunity to meet the needs of the future for this mass of retirees. We have the land, water, sunshine, location, amenities, and tax structure. The 900 acres could be used to develop affordable green retirement homes. The re-branding could be "The nation's most affordable green retirement community".
What Mesquite is missing is leadership, a sense of direction, a real plan and a commitment to follow it through. The City of Mesquite can only position the city to meet the needs and financial constraints of the retirees with planning and leadership today. Today's leadership must be held accountable for the decisions being made today, accountable to the citizens of Mesquite. They must be held accountable for the disposition of the city owned lands including the price tag, and the planned use of that land. They must be held accountable today for the future direction and success of Mesquite.
Re-branding an entire town, changing direction mid stream warrants public input. Changing the direction of Mesquite deserves understanding, transparency and consensus of a large majority of the current population. While elected officials and their administrations will be long gone, the citizens will still be here living with the consequences of today's decisions.
The decisions being made today by the current City of Mesquite powers that be appear to me to be based upon desperation and fear. They say the sports complex on the 900 or so acres of our land will be developed with a half billion dollars, are those funds committed? They say it will bring people and jobs. That is the pitch to justify selling the land so cheap, remember that is our land. How many of those jobs will offer incomes to people who can actually afford to live in Mesquite at today's prices? How can this complex possibly cash flow, with a half billion dollar investment? What is the real motivation? Mesquite citizens deserve more transparency on this transaction.
Mesquite's undeveloped acres could be developed as a model green affordable community that could gain national attention and build on the current city plan and image. Mesquite could gain national attention as a green affordable, financially sustainable place to retire. This could be the collective brain child of city planners, local engineers, local builders, local suppliers, and local realtors, on and on. Bringing with it positive national attention, jobs, and retirees. Re-branding that is in line with Mesquite's current plan and past efforts that will pay dividends forever.
If The City of Mesquite can sell 900 acres for the price being offered to the sports complex developers, then we can develop very affordable retirement homes on that same land. Homes that could sell for well below $100,000.
There will plenty who will say it can't be done, remember they told Columbus he would fall off the edge of the earth, don't you believe them. This country this built on ideas that people said couldn't be done. It may require everyone working on smaller profit margins, builders, and contractors working on cost plus margins, but those are still jobs. It may require ideas and technology involving living spaces that some will say are unacceptable, but the future of retirement housing is going to look different. Open minds and very affordable pricing will open doors we never even knew existed.
Chris W. Miller
ERA Brokers Consolidated
Mesquite NV 89027
702- 346-7200
435-862-5951
Today in Mesquite Nevada real estate there are a record number of institution owned properties, a record number of notice of defaults being filed, and a record number of foreclosures taking place. This year has steadily recorded monthly records for failed listings, and the new record grows each month. All those failed listings are all still out there and will eventually need to be sold.
Never in the history of Mesquite real estate has the market seen distressed numbers even close to what is taking place right now. Sales prices conitnue to drop.
The number of listed vacant properties is close to 60% of the total listings. Property management companies are reporting record vacancy rates for the properties they manage, and rents are dropping.
The institutions (BANKS) seem to be holding inventory back off the market. No one knows the motivation for hoarding vacant deteriorating real estate, but it sure looks like that is exactly what they are doing.
While some agents will spin the market and push the "buy now or risk missing out" pitch, the truth appears to be quite the contrary. No wonder consumers view our industry with distrust and contempt.
Now is a great time to buy if; it fits your needs, budget, time frame, and you have done your homework.
Tomorrow will also be a great time to buy. When the institutions do start dumping that inventory, it might even be a better time to buy. If you plan to buy but are not ready yet, relax.
Find yourself an agent that will talk to you about the market honestly, learn the market numbers yourself, paying particular attention to prices per square foot.
For the buyers the best is likely yet to come.
Chris W. Miller
ERA Brokers Consolidated
Mesquite NV 89027
702- 346-7200
435-862-5951
As the baby boomers consider their future and their options, some are going back to the basics. The idea that they can be independent is very appealing to many. They recall the days when their grandparents lived closer to the land.
A slower time when sipping tea on the porch in a rocking chair was an afternoon ritual. Raising a garden for the fresh vegetables, having a small orchard that produces bushels of fresh fruits, and chickens that lay farm fresh eggs daily.
Nevada land is available to build the dream and lifestyle. Nevada offers an excellent moderate climate, and no state income taxes.
For many future retirees, a monthly trip to town for supplies will be all the traffic they will face. Some will raise a few cows, for fun and food. Some may raise a hog or have a flock of peacocks, guinea hens, or geese.
Riding their four wheelers or horses, they will spend their days exploring the thousands of acres of public lands in Nevada. Traveling the old roads from one old west ghost town to the next old mining ghost town.
Some will take up new hobbies, adding work shops and studios to their farms for the creative side they left back in the 60's. Some will build green solar homes and have wind turbines, adding power back to the grid for a change.
Many will spend their winters relaxing in the warmth of a pellet stove.
For many of the baby boomers this new lifestyle will be a healthier, slower, more fulfilling time of their life. A time when they can relax and let the world go by. The idea of self sufficiency is not only appealing it is attainable. Nevada farm irrigated farm land with water rights.
Chris W. Miller
ERA Brokers Consolidated
Mesquite NV 89027
702- 346-7200
435-862-5951
New trends give a clear view of where the market is going.
Mesquite Nevada MLS recorded a total of 65 residential closings during the first quarter, 22 of these were bank owned or short sales 33.8%. 207 residential listings were submitted and 247 went out of the system as failed listings.
We closed a total of 41 single family homes and 13 of those were bank owned or short, the 13 distressed home sales averaged $111 per square foot. Of the 41 closed single family homes was 24 existing or resales at $122 per foot, 17 new homes at $162 per foot.
There are already 20 resale home listings available at Sun City Mesquite. The Mesquite MLS only recorded a total of 7 closings during the first quarter at the new Pulte Del Webb project, that includes new and resale homes, those 7 sales averaged $159 per foot.
8 condominiums closed at an average of $99 per foot, 15 town homes closed at an average price of $118 per square foot, and 2 vacant residential building lots sold. 3 homes sold and closed in Bunkerville and they averaged $93 per square foot.
On March 31, 2009, at the end of this past quarter 44% of the pending transactions in the Mesquite MLS were listed as distressed properties, either REO or short. Failed listings which are still out and most must be sold sooner or later exceeded pendings on a 5 to 1 basis this past quarter; many will turn to distressed properties.
Based on the past quarter sales and the current active listed properties there are 22 months of single family homes, 46 months of condos, 19 months of town homes, and years worth of building lots. It looks like there is on average about a two year supply sitting on the market, plus another year's worth of inactive and vacant.
At this time around 255 of the 430 active listings are listed as vacant, about 60% are sitting empty, no cash flow.
There are still many people living in homes they can not afford and they are under water. A wave of distressed properties, yet to come to the market.
While many agents, the government, and the media spread the rumor that the market is improving! Buyer Beware has never rang louder.
There are 13 commercial buildings and 16 commercial land parcels actively listed for sale and many more available but not listed. No commercial buildings or land closed. While it is hard to measure, it looks like there is well over 300,000 square feet of vacant commercial office/retail/industrial space sitting vacant.
The City of Mesquite building department issued 6 permits for new commercial buildings and 19 permits for residential buildings during the first quarter 2009.
The typical buyer profile coming to Mesquite today is a far more cautious and conservative retiree. They have been slapped hard with the reality that neither the stock market nor the real estate markets always go in one direction. Many have seen a huge chunk of their nest egg disappear in both markets.
The current environment has them in fear of their financial future, out living their savings. Uncertainty about government spending, bail outs, health care costs, rising cost of living (inflation), income stability and net worth are all potentially paralyzing for buyers.
There seems to be an uneasy sense with the retirees that the government is reaching too deeply into the pocket of our capitalist free enterprise system. There is little security anywhere. It is affecting consumer sentiment and confidence.
The market correction is far from over and for Mesquite it is a reality check. If we are to attract the greener more conservative baby boomers we will need to adapt.
Affordability, efficiency, and value will have to lead us out. What worked over the past ten years, business as usual will not cut it. This is not unique to Mesquite, most every business model out there is changing the way they do business or like our auto industries they will be reorganized.
After the high flying years of loose money and bad decisions, deleveraging is taking place. Asset values are falling and this will continue until the market gets back to fundamentals that work. Vacancy rates will not go down until business can afford the rents. Buyers will not buy homes they can not afford.
Debt to income ratios must get back to closer to 28% and 35%, or prices in the range of 2.5 to 3.5 times annual income. As we have seen, 5 times annual income as a purchase price generally does not work. Debt is strangling the entire economy.
This melt down of the financial system is all about excessive unmanageable debt, over leveraged, and wildly over valued assets. Consumer sentiment or confidence is not the cause; it is the artificially inflated values. Lower prices and market stagnation are the results we are seeing.
Affordability is not a concept, it is reality.
Mesquite Nevada has a bright future and the current market is beginning to create opportunities for knowledgeable buyers.
For square footage numbers in specific neighborhoods, questions, or comments
Chris W. Miller
ERA Brokers Consolidated
Mesquite NV 89027
702- 346-7200
435-862-5951
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Mesquite Nevada Real Estate, 32+ Years Real Estate, Experience you can trust. Nevada farm and ranch land with water rights, irrigated land, cattle ranches, agricultural land. Market reports available
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