"An increase in the general price level usually attributed to an increase in the volume of money and credit relative to available homes and land."
Versus
"An increase in value of property due to either a positive improvement of the area or the elimination of some negative factor, a change has occurred."
Guess which is the definition for inflation and which is appreciation.
The definition of value used by U.S. regulated lending institutions contains these words "assuming the price is not affected by undue stimulus". Back to original question, inflation is caused by money supply, the first one. Appreciation occurs over time based on changes in the market place.
Have we all been fooled into believing that what has happened to home prices over the past few years has been appreciation? Is it really nothing more than cost of living (housing) inflation? Caused by the over supply and illusion of low cost or even free money? Do you owe more money today than you did twenty years ago? We do as a nation.
Now if the over supply of money creates inflation, how will adding $700 billion more dollars help? I know it will save the banks and Wall Street, it will allow them to lend more money.
Henry Paulson said just today the plan is not designed to help homeowners with falling home values, it is not designed to help homeowners in danger of losing their homes, it is designed to help the financial system (institutions). Furthermore, the proposal includes this "Decisions by the secretary pursuant to the authority of this act are non reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency".
This is not an RTC plan, they sold off real estate, this plan does not sell any real estate. This plan will buy highly leveraged mortgage backed securities with tax dollars and hold them. This plan pumps more money into the system, into the hands of the bankers and Wall Street, no wonder it is supported by the financial cheerleaders.
Bond guru Bill Gross has already said they will be back for another $500 billion before it is over. The FDIC likely will need an additional $150 billion. These combined will double the amount being discussed.
Tens of thousands of Americans have stood up and said wait, enough is enough. The money they are spending belongs to your grandchildren, for me the reward better equal the risk. Albert Einstein said "The most powerful force in the universe is compound interest." When do we face it, when do we deal with the debt, are we as a nation going to compound it to our future generations? Compounding this debt and interest to our children and grandchildren?
Lets get back to appreciation and inflation, if in fact what we have seen in home prices is nothing more than cost of living inflation driven by the huge supply of funny money, then it is the enemy! If you could cut the price of gas back to a dollar a gallon, would you? The market may be about to cut the price of homes!
Tough choices, tough issues, maybe tougher consequences ahead.
Chris W. Miller
ERA Brokers Consolidated
Mesquite NV 89027
702- 346-7200
435-862-5951
Demand driven by what looked like free money for everyone who asked for it drove home prices to new highs at a historic pace. These prices led many to a euphoric high and false sense of financial security. Leading many to go on consumer spending sprees, this new found wealth became available through equity lines of credit and refinancing, in a word taking on more "debt". Backed by the "asset value", that is those inflated home prices. Are they immune from personal responsibility?
Today as those homes sit on the market with prices going lower by the day, you hear that term "asset value", mostly in the context that no one actually knows what it is, or it is difficult to determine. Many banks are holding homes in their portfolio to avoid this discussion. They are not placing the foreclosed homes back on the market, they are holding them and waiting. Waiting for a bail out? Waiting to tell the truth about real asset value to avoid reporting losses? Waiting, possibly paralyzed by the fear of what the truth will do to stock prices or even worse, facing seizure by the fed regulators?
As foreclosures continue to rise and banks hold and hide real asset values it is no wonder they are not loaning any more money. The idea that we can not determine asset values in real estate is complete nonsense. Homes sell based on supply and demand, prices are determined by the same principle. Today we have two levels of supply, there are the active listings, then there are the homes owned but not actively for sale, sitting vacant and waiting. The asset value is clearly based on the recent comparable homes sold, but they don't like the looks of those numbers. They are hoping for miracles. There are the home owners, mostly speculators holding homes just because default is fundamentally against their personal principles, because they don't walk away from personal commitments, and there are those bank owned homes. It is a shell game of deception and denial.
If the problem was created by excessive borrowing and speculation, will increased borrowing and lending help fix those asset values? Lending standards are based traditionally on one of two things, cash flow, and ability to repay. Ability to repay requires debt to income ratios, 28 and 36% were the standards for many years. This measure can be used to figure asset values as well. Look at the median income calculate 28% of the gross, use this figure as the payment (PITI), calculate the mortgage amount, the median home value for that market. Again, they don't like the looks of those numbers, but no one wants to talk about affordable housing anyway. Income on residential real estate generally won't cash flow, rents are not high enough to cover payments. Investors plan for this by putting more down or feeding the investment, taking the tax breaks and betting on future appreciation.
Back to the question, how will borrowing more money, 700 billion dollars change the fundamentals of good and prudent lending and borrowing standards? How does it affect those asset values? Are they looking to recreate the frenzy that drove those prices in the first place? Do we really need more "debt"? Those fundamental principles won't change.
Maybe they could give the $700 billion to all of us in the form of a pay raise, and then we could make those higher house payments. Actually when you look at it that way, it clearly is not nearly enough money to fix the problem of those over valued assets. This doesn't look all that good for those asset values going forward.
The leveraged derivatives that came out of the brokerage firms that are now dropping like flies are the really scary part of this for those looking for solutions. Talk about unknown value, those levered investments were sold to the entire world's investment accounts. Main streets 401k's, possibly your IRA account, state governments, municipalities, private pensions, foreign governments, on and on.
Don't they actually mean house prices when they say unknown asset values?
Chris W. Miller
ERA Brokers Consolidated
Mesquite NV 89027
702- 346-7200
435-862-5951
Humboldt County, Nevada
4.5 sections with 18 quarter section circle irrigation pivots and 17 wells. The water rights allow for a total diversion of 39.84 cfs or 9,070.4 acre feet per year. The priority dates are primarily from August 1976. This parcel has 2,294.4 acres of water rights from 18 different certificates. Typically the property has three cuttings per year, yielding 11,000 tons of alfalfa. Water is near 110 feet, pumping from approximately 280 feet. The land is located at 5200 feet in elevation, north of the historic Humboldt River Valley.
Wall Street is now referring to farm land like Eden Valley as "Food Stocks".
This Property offers a total of 2877 acres, with 2294 irrigated acres. Each of the eighteen circle pivots irrigates one 160 acre quarter section. The ground is mostly considered to be cultivated first class 4+ tons Alfalfa, typically allows for three cuttings per year. Other plantings have included wheat and barley. Average annual harvest is around 11,000 tons Alfalfa.
These four and half sections are surrounded by BLM land, accessed by county road with power to the property. Located in T39N, R41E, M.D.B.&M.
Accurate climate data for the specific area of the subject property is limited, but Winnemucca records provide a good indication of weather history. Average annual precipitation is about 8 ¼ inches, including about 24 inches of snowfall. Summers are normally dry. Temperatures vary each year, but the average temperature is approximately 50 degrees F with the average summer temperatures being 93 degrees for the high and 51 degrees for the low.
Seed crops are typically shipped to Boise ID, Orovada, or Lovelock for cleaning, and then marketed to various seed companies. Quality alfalfa hay is generally exported to California. Lesser quality alfalfa hay is often marketed locally to beef producers. Freight rail service is available in Winnemucca. The elevation is approximately 5200 feet.
Irrigated farmland, once granted, water rights in Nevada have the standing of both personal and real property- meaning they are conveyed as an appurtenance to real property unless they are specifically excluded in the deed of conveyance. It is possible to change the water's point of diversion, manner of use and place of use by filing the appropriate application with the state engineer.
Appropriative Water Right [Nevada]- Nevada's water law is based on statutes enacted in 1903 and 1905 and are founded on the principal of Prior Appropriation. Unlike some other states, Nevada has a statewide system for the administration of both ground water and surface water. Appropriative water rights are based on the concept of applying water to Beneficial Use and "First in Time, First in Right." Appropriative water rights can be lost through nonuse and they may be sold or transferred apart from the land. Due in large part to the relative scarcity of water in Nevada and numerous competing uses, Nevada has had a thriving market for water transfers for a number of years.
Eden Valley Farm is available for sale, for more information about this and other farm and ranch property with water rights in Nevada Contact.
Chris W. Miller
ERA Brokers Consolidated
Mesquite NV 89027
702- 346-7200
435-862-5951
The Mesquite Nevada real estate market for Homes and Town Homes in Sunset Greens, Mesquite, Nevada continues to show good strength in spite of the competition from Sun City Mesquite. There are currently 13 active properties listed in the Mesquite Nevada MLS, they range from $219,900 to $329,900, with an average asking price of $161 per square foot.
The View, looking south across the driving range and Golf course.
During 2008 closed sales in Sunset Greens, Mesquite Nevada have totaled 10 homes with an average price of $244,780 or $162 per square foot. This gated community is surrounded by the Casa Blanca Golf course and homeowner receive discounts to play this beautiful course year around. Offers two association pools, Owners RV storage, many Golf front homes, gated entrance, and a very well run and stable HOA. These closed prices represent a higher average price per square foot than the over all Mesquite Nevada market has posted over the past thirty days, and indicate to me that at least some buyers are choosing Sunset Greens over the slightly less and new Sun City Mesquite.
There are some very distinct differences, Sunset Greens does not have any SID costs, no parent HOA to pay, very reasonable golf rates, and the course is playable today. If you are considering Mesquite Nevada real estate market as a place to land, be sure to check out Sunset Greens.
Chris W. Miller
ERA Brokers Consolidated
Mesquite NV 89027
702 346-7200
435-862-5951
Sunset Greens in Mesquite NV is a gated community of town homes and single family detached homes. Surrounded by the Casa Blanca golf course, community members receive regular golf discounts to play the beautiful 18 hole course.
Sunset Greens, Mesquite NV offers, two association pools, resident RV storage.
1190 Indian Wells offers rare quality, condition and location. Upgraded throughout, completely remodeled. Move in ready, no additional expenses like landscaping , window treatments, or deferred maintenance.
Upgraded lighting, plumbing fixtures, Kitchen aid stainless steel superba appliances, maple cabinets throughout, tile shower and floors. You won't get these upgrades at any base price. Covered rear patio with stained concrete floor and mister system.
Don't buy new until you seen this one! Take a Virtual Tour!
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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