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Is another real estate bubble coming to the Sun Belt?
10-25-2013, 04:30 PM
One key stat from the article is that 60% of all homes bought in Las Vegas in June were paid for in cash.
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Is another real estate bubble coming to the Sun Belt?
10-25-2013, 04:48 PM
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.
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Is another real estate bubble coming to the Sun Belt?
10-26-2013, 12:50 AM
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.
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Is another real estate bubble coming to the Sun Belt?
10-26-2013, 01:06 PM
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.
Take care of those titties for me.