2020 Las Vegas Economic Outlook and Affects on Real Estate

It’s a great time to buy, and sell, but unfortunately we still have a distressed market. So many people are ready to be over with this distressed era; just a few more years.
 
Take an in-depth look from 1900 to 2020 within the Las Vegas (Clark County) real estate market and economy; this study reviews and analyzes inventory, sales, currency, population, employment, developments, distressed properties, and realty.

2020 Economic Real Estate Outlook
Facts and Trends; 2002-2013 Sales and Inventory
The Clark County Nevada Distressed Properties Era
1971-2013 30-Year Fixed-Rate Mortgage Interest Rates
Population and State
City and Corporate Developments
Sales and Inventory Tabled Analysis

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2020 Economic Outlook

Positive Outlook for Real Estate Ownership
Now is the time to buy and hold. Inflation is expected, and during inflation housing prices tend to rise. Your money is more valuable invested in real estate and land, where you will own an appreciating asset; investors occupying homes with tenants generate valuable income, which is a bonus during an inflation period.
 
If you finance(d) with a fixed-rate-mortgage, not only are the interest rates historically low right now, as inflation occurs you’ll be paying less on your mortgage payment than when you took out the mortgage.
 
Again, expect home prices to go up. If inflation is high and supply is high, our home prices could still go down. But, our demand is significantly greater than demand, at historical rates, as you can see in the graphs throughout this post.

Reserve Currency Graph
Reserve Currency GraphSince 1944, the current currency of the international financial system is the United States dollar, and it’s backed by US Gold.

 
As more money is printed without an increase in gold, each dollar is worth less than it was prior printing and release of new dollars. Everything you purchase will go up in cost. Check out the graph to the left, it’ll be difficult to remove the US as the worlds currency anchor.
Revenues and Outlays as percent GDP
For a stabilized economy, we need to see equilibrium here, and positivity Revenues versus Outlays, which is possible and was achieved by the Bill Clinton administration in the late 1990, quickly destroyed by President Bush’ era.

Revenues and Outlays as percent GDP

Facts and Trends; 2002-2013 Sales and Inventory

From a near 5,000 population in 1940 to 500,000 in 1980 and a whopping 2 million people by 2010 (see Population Growth), and still growing, we can expect to see a continual drop in inventory of resale homes and new homes, and in return with an increasing demand and economic inflation, we can expect a continual rise in cost of purchasing real estate.
 
Here, you can see these trends and percentage changes for Inventory Sold, Average Sales Prices, and Comparison charts, for Clark County single family homes:

 
2002-2013 Las Vegas Real Estate Inventory Trends and Growth Graph
2002-2013 Las Vegas Real Estate Inventory Trends and Growth Graph
 
2002-2013 Las Vegas Real Estate Sales Trends and Growth Graph
2002-2013 Las Vegas Real Estate Sales Trends and Growth Graph

 
 

The Clark County Nevada Distressed Properties Era

Are you ready for a final wave of foreclosures? Some say, be prepared for a new wave of foreclosures! More incoming money for government, more taxes for the people.
 
It’s very clear to understand; let’s see what’s happening and why, foreclosures are coming back.
 
Foreclosures laws have changed
 
Assembly Bill Number 300 (AB 300) is an act, which is a revision of AB 284, clarifying the banks right and requirements to foreclose on a defaulting mortgage. This clarifies the foreclosure process, allowing banks to continue foreclosing comfortably. Here’s one of the primary points, where the bank prevents liabilities:
 
After a mortgage holder files a Notice of Default, they must automatically enroll the homeowner facing foreclosure into the Nevada Foreclosure Mediation Program (FMP), effective October 1. Establish 2009, FMP provides trained mediators to discuss and help the homeowner pursue alternatives to foreclosure. Minimum 2 contact attempts via certified mail, and first class mailing, and likely phone calls, and other methods of contact.
 
In simple language: if your not making your mortgage payments, your mortgage holder will record a notice of default on your property, then your mortgage holder will mail and contact you to discuss alternatives to foreclosure, and will require some action on your part to prevent them from foreclosing on you, and then if you continue to default or not complete an alternative, they will… foreclose on you. And you will lose your home.
 
Here’s the thing… we know our options: traditional sales (breaking even or selling with equity), short sales, loan modifications, and deed in lieu of foreclosure.
 
If you’re making an average income, you haven’t been paying your mortgage for 6 months, and you’ve recieved a notice of default, your going to get contacted to pursue these options.
 
Which option do you take? Do you qualify for a loan modification? Are you ready to take a short sale to prevent foreclosure? When the short sale is approved, are you ready to deal with owing the government money? Should’ve short sold in 2013…
 
You may also waive mediation; which, will result in the FMP issuing a Certificate of foreclosure.
 
Well, what about Short Sales?
 
Short Sales may become expensive: there’s a 1% chance that Obama signs an extension for Mortgage Debt Forgiveness Act (MDFA), extending it through 2015. Currently, the MDFA is only effective until 2013, this act allows home sellers in a short sale status to be forgiven on the difference between outstanding mortgage and the sales price, which would otherwise be considered taxable income. If this Act is not extended, any persons short selling their home may be taxed on the debt forgiven similar to income tax; for example, you may owe the government $30,000 if $100,000 in debt is forgiven via short sale, depending on your tax bracket (which may change based on this forgiven debt being treated as income). Essentially, if this act isn’t re-enacted it may significantly lower the number of short sales.
 
 
2002-2013 National Inventory Trends by Type: New Homes, Traditional, Short Sales, and Foreclosures
2000-2013 New Home Sales Trends, Homes Sales by Price Tier, Distressed Sales as a Percentage, and Existing Home versus New Home versus REO versus Short Sale Graph
 
With the surge of cash purchases and new lending guidelines, loan modifications, and short sales, distressed properties are on the verge of being rare.

 
Unlike resale, the median new home sales price is still as high as it was in 2006, while the volume of new home sales are at record lows. Purchasing and holding real estate is the greatest long-term investment you can invest in, today.
 
 

1971-2013 30-Year Fixed-Rate Mortgage Interest Rates

As you can clearly see, it’s a great time to get a mortgage. In the last several years mortgage rates have been historically low. Though they are not as low as they were let’s say 1 year ago, it’s still an amazing interest rate if you qualify, it’s like free money.
30-Year Fixed-Rate Mortgages Since 1971 Graph

 
 

Population, Employment, and Tourism

Employment versus Unemployment is moving toward equilibrium compared to national averages and history.

What’s impressive is… from a near 5,000 population in 1940 to 500,000 in 1980 and a whopping 2 million people by 2010, and we’re continuing to grow.
 
Clark County has created close to 1.8 million jobs, more than half of those being in the last 25 years. That’s impressive. Our unemployment rates is currently below 10% (according to collected unemployment benefits). And there are plenty of jobs available, just check out job websites!
 
With such a boom in population, expect us to continue to develop as one of the modern cities. Attracting residents and tourists from around the world, our developing social-cultures are unique and connected.
 
Las Vegas Population Growth
Las Vegas Population Growth Chart
 
Las Vegas Visitors Per Year
Las Vegas Visitors Per Year Chart
 
County Gaming Revenue per Year
Las Vegas Gaming Revenue Per Year Chart
 
Unemployment Rate per Year
Las Vegas Unemployment Rate Per Year Chart

 
 

City and Corporate Developments in Las Vegas

We're ready to help you with future developmentsWant to be involved with city developments?
We have available and recommended investments, including boutique hotel/casinos, business parks selling individual units, and multi-units. For qualified persons/groups, short term financing is available up to $2m or $10m+. And at a lower price point, single family homes and condos make great investments. We promote long term investment and planning.
 
Ready to help Las Vegas grow? Maybe you want to bring your Industry to Las Vegas?
Contact us today for a free consultation.

Symphony Park, City of Las Vegas, $50+ million, plus private developments
Symphony Park is a beautiful local city development, with a harmonious blend of diverse developments which, together, are creating the first modern-day city neighborhood in Las Vegas. The site estimates 10 million square-feet of diverse mixed uses, including office, medical, residential, non-gaming and gaming hotels, and retail. Already open and active: the Center for Brain Health, the Smith Center for the Performing Arts, the Reynolds Hall Carillon Bell Tower, the Discovery Children’s Museum, and private hotels and high-rises.
Downtown Project, by Tony Hsieh, $350m
A group of passionate people committed to helping to transform Downtown Las Vegas into the most community-focused large city in the world. Stimulating new business ventures, schooling, and a whole new world of a vibrant connected urban core.
New Sports and Entertainment Arena, MGM, $350 million
MGM and AEG announced the 2016 privately funded 20,000-seat indoor sports and entertainment arena on the Las Vegas Strip will begin construction in summer of 2014.Though no professional sports teams are confirmed, the opportunity is available.
Genting Resorts World, $2-$7 Billion
Soon to be the only Asian hotel and casino on the strip, Genting is bringing near 15,000 jobs to Vegas, with panda habitats, tea gardens and red pagodas. Sin City is about to get it’s first mega-casino since 2008. Breaking ground 2014, taking over stalled site for Echelon.
The LINQ: Worlds Tallest Observation Wheel, Caesar’s, $550 million
Caesars is redefining the Las Vegas skyline; open-air retail, dining and entertainment, anchored by the world’s tallest observation wheel: The High Roller. Highest point is 550 feet up diameter is 520 feet. 28 glass enclosed cabins take 30 sweet minutes to show off the entire city, right from the heart. Oh, and it eclipses both the London Eye and Singapore Flyer. Debuting late 2013.
SLS Hotel, $415 million
In 2014, this mixed-use resort and casino will feature an approachable experience that will feature SBE’s acclaimed restaurants, The Bazaar by José Andrés, Katsuya by Starck, multiple unparalleled nightlife offerings, and retail by Fred Segal and additional brands currently in development. Boasting 1,600+ guest rooms and suites, and 30,000 square feet of flexible meeting space.
Gansevoort Hotel and Drai’s, $185 million
Gansevoort hotels rate in the top 50 Hottest Hotels in the World, and is called out on having the World’s Sexiest Rooftop Pools. Comfortable enough to serve as a second home, Gansevoort provides its own ecosystem of guest services, from a lavish and relaxing therapy session to blow-out parties at Drai’s, they ensure that guests will be entertained.
First Las Vegas corporate solar project, MGM Resorts, 6.2MwNevada’s sustainable energy initiative gained momentum during 2010, and clean energy is now the fastest-growing industry in the State. Our renewable energy standard is one of the most aggressive in the nation; by the year 2025 at least 25% of energy sold to consumers must be from renewable sources with at least 6% from solar by 2016.
Las Vegas Features Modern Road Structures
Vegas hosts one of the newest road structures in the Nation, promoting safety and preventing gridlock and deteriorating air standards. And, city wide public transportation and bicycle lanes are readily available.


 
 

Sales and Inventory Tabled Analysis, 2002 to 2013

Status
Count Total Price Avg Price Median Price
Currently Listed Available 6,208 $2,511,768,761 $379,666 $264,900
Currently Under Contract 8,617 $1,694,135,417 $213,742 $170,000
Sold Sep ’12 – Sep ’13 33,430 $6,717,711,634 $200,949 $161,000
Sold Jan ’02 – Sep ’12 335,005 $80,380,690,270 $239,939 $197,000
Temporarily Off The Market 212 $70,061,983 $330,481 $188,500
Withdrawn Unconditional 2,800 $736,946,925 $263,195 $169,900
Withdrawn Conditional 958 $253,649,073 $264,769 $178,298
Expired 75,660 $21,231,418,961 $280,616 $159,900
SqFt
List Price
LP/SqFt
Sale Price
SP/SqFt [w/cents]
SP/LP
SpOlp
DOM
High
31,000 $70,000,000 $180,000 $17,375,000 $172,500 6500000% 17875000% 2,652
Average
2,022 249,465 $117 $236,396 $118 117% 461% 56
Median
1,780 187,500 $100 $192,000 $103 100% 98% 31

 

Table of Contents

2020 Economic Real Estate Outlook
Facts and Trends; 2002-2013 Sales and Inventory
The Clark County Nevada Distressed Properties Era
1971-2013 30-Year Fixed-Rate Mortgage Interest Rates
Population and State
City and Corporate Developments
Sales and Inventory Tabled Analysis