[Capitán Peligroso]

Year over year prices are up 24.5% in San Francisco, 23.3% in Las Vegas, and 20.6% in Phoenix, compared to a 12.2% average of the 20 cities surveyed.

Part of the reason for the boom is highly capitalized private equity firms, hedge funds, and real estate investment trusts coming in and buying large numbers of houses, 100,000 in the last two years, according to the article.

Full article from Investors Business Daily here.

More information from HuffingtonPost (take with large grain of salt) here. Discuss.

[Capitán Peligroso]

One key stat from the article is that 60% of all homes bought in Las Vegas in June were paid for in cash.

[zwyjibo]

I've written about this before: There are a ton of vacant properties (think 50-60k) in Las Vegas and I don't think the gains over the last year are real. I don't think the market is going to collapse, but you could see a muddle-through situation where there's little to no growth in prices for the next several years. But the price jumps and cash purchases in Vegas are corroborated with what I've seen on the ground. There were some good deals at the beginning of the year - now I'm not so sure.

Out of the three cities you named, I think SF is probably the most sustainable. Cash out the IPO shares once the restrictions end and buy a house with cash money. The tech scene seems less volatile than whatever is driving the price increases in Vegas, which I think is mostly bargain shopping.

[samsamsam]

(10-25-2013 04:48 PM)jdevoy Wrote:  

I've written about this before: There are a ton of vacant properties (think 50-60k) in Las Vegas and I don't think the gains over the last year are real. I don't think the market is going to collapse, but you could see a muddle-through situation where there's little to no growth in prices for the next several years. But the price jumps and cash purchases in Vegas are corroborated with what I've seen on the ground. There were some good deals at the beginning of the year - now I'm not so sure.

Out of the three cities you named, I think SF is probably the most sustainable. Cash out the IPO shares once the restrictions end and buy a house with cash money. The tech scene seems less volatile than whatever is driving the price increases in Vegas, which I think is mostly bargain shopping.

May I ask are those Vegas houses in decent/good areas? Like 3 bed 2 bath sort of thing?

[zwyjibo]

(10-25-2013 05:25 PM)samsamsam Wrote:  

(10-25-2013 04:48 PM)jdevoy Wrote:  

I've written about this before: There are a ton of vacant properties (think 50-60k) in Las Vegas and I don't think the gains over the last year are real. I don't think the market is going to collapse, but you could see a muddle-through situation where there's little to no growth in prices for the next several years. But the price jumps and cash purchases in Vegas are corroborated with what I've seen on the ground. There were some good deals at the beginning of the year - now I'm not so sure.

Out of the three cities you named, I think SF is probably the most sustainable. Cash out the IPO shares once the restrictions end and buy a house with cash money. The tech scene seems less volatile than whatever is driving the price increases in Vegas, which I think is mostly bargain shopping.

May I ask are those Vegas houses in decent/good areas? Like 3 bed 2 bath sort of thing?

Hard question to answer - I don't have MLS access and haven't been looking because I'm not in the market.

From what I gather there are abandoned places in nice neighborhoods, but the ones that aren't bank-owned and priced under 1-1.5M are getting snapped up, if they haven't been already. I have no idea about the dodgier parts of town (except that rents in downtown high rises are rising precipitously because of Zappos.com's move there) or more unique RE like condos on the strip.

This is unscientific and based on what I've seen myself and through people who recently purchased houses. I don't know a good residential RE guy in Vegas (commercial is a different story and in my experience those agents are far better than the residential ones). If you want to buy residential RE in Vegas and be aggressive, you're going to have to be making a lot of your own calls, aggressively scheduling visits, and pushing the ball forward by showing up unannounced at people's offices on your own. I have not observed or heard of any particularly motivated residential RE agents in town. If I find one, I'd definitely refer them.

[KingJamesXXIII]

Hedge Funds are buying the properties and they are empty, just check your local furniture stores...are they packed? Case Closed.
My buddy just sold 118 houses to a hedge fund at 120k each, he bought em at 40k each in Fall 2008/Spring 2009 after the crash. He bought the bottom and SOLD the top (Summer 2013). Roflmfao..its not that hard people.

[Dusty]

Breaking it down in terms of supply and demand.

Demand factors: 1. Hedge funds buying houses for rental yields in AZ, NV, SOCAL, etc. 2. Low mortgage rates. 3. Job growth (albeit slow). 4. Population growth.

Supply factors: 1. Construction of new houses slowed to a trickle in the past 5 years. 2. A lot of mortgages are under water in these areas, and most people won't sell their house if they have to come up with money to pay off their mortgage.

As far as the hedge funds, they are making good yields off these rental units. If they were sell these houses, they would have to find another replacement investment with similar yields or else their income goes down. It's hard to find those type of yields in this low rate environment.

I think the recovery is sustainable.

[WestIndianArchie]

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