Mesquite Market

Banks like Citigroup plan to renegotiate loans for those not yet behind.

Countrywide said today wait to contact us until you are three months behind.

During my most recent conversation regarding a listed short sale Countrywide said “we don’t want any involvement until you have an offer” with no discussion of pricing the property.

The Tarp plan has changed directions and no one understands where it is going or who it will help. As the de-leveraging continues and prices fall, foreclosures and defaults increase and it remains impossible to know the full extent of the losses or how long this will continue. Unemployment is a looming nasty wildcard. Banks vow to help millions of families, but can they really make those high dollar mortgages affordable or will they just prolong the pain and postpone the inevitable? Renegotiating much of the secondary market paper will be impossible.

Some banks continue to take weeks to respond to offers, and list REO properties at above market value prices. No one knows for sure who is holding all the bad assets or how bad they will become. Some banks will just write off the losses while others plan to pursue collection efforts and default judgments after short sales and foreclosures. Many second position lenders and PMI companies are exposed to (100%) loses. Wall Street is clearly worried along with the economies around the entire world.

Prices are coming down dramatically on some properties, and yet some cash buyers continue to pay 2006 prices on other properties. It must be either; buyers who are completely uninformed about the market and unrepresented or else they found the only home that fits their exact needs and makes them feel the best. With such erratic prices dual agency for agents will become far more dangerous.

Many properties will have to be sold now to raise cash. All this uncertainty is paralyzing most buyers at a time when they should be laying out their plan to take advantage of the margin call properties going on sale.

The one thing that does make sense right now is that the lenders do have money to lend at very favorable rates for those with a down payment, good credit, and the ability to repay. 

Chris W. Miller

ERA Brokers Consolidated

Mesquite NV  89027

702- 346-7200

435-862-5951

Mesquite Market

chris@mesquitemarket.com

Lincoln County Land Market

Nevada Ranch Properties 

39 total single family homes closed with an average sales price of $271,986 or $151 per square foot, 26 of these were existing homes at an average price of $263,968 or $153 per foot. The balance of 13 was listed as new homes and averaged $288,023 or $146 per foot. The builders have taken out 303 building permits year to date, while Mesquite MLS shows less than 150 homes sold and closed. Inventory of all property types remains at historic highs.

10 condominium units closed and 9 town home units closed during the quarter. No single family lots sold. No commercial lots sold. No vacant land parcels sold. One commercial building sold to the City of Mesquite. It appears there is roughly 200,000 square feet of vacant office/retail/light industrial warehouse type space available all over town as builders continue to add to the supply. The number of total pending units as listed in the Mesquite MLS was around 13 at the end of the third quarter; during 2005 and 2006 it was averaging around 100 at any given time.

58 Notice of defaults were filed with Clark County, representing every property type in the city, from small condo units to large luxury golf front homes and whole subdivisions. Banks are not putting this inventory into the market at any where near the pace they are getting it back, and asking prices do not reflect true write downs, yet! The rental market remains soft as vacancy rates remain high and rents come down on all property types.

Looking forward buyer sentiment will be the key; it is tough to put a value on personal financial security. Many retiring buyers are reluctant to make large financial commitments or mortgage their futures. While nationally the ratio of income to home price reached 3.6 times last year, Mesquite was 5 to 7 times local median income on the average home. I expect nationally this number will drop back below 3, as underwriting standards tighten and buyers realize they must live within their means. Every trend line points to lower future prices across the board.

Please remember to call me when planning a visit to Mesquite. I will give you a current market update and a tour, Thanks Chris

Chris W. Miller

ERA Brokers Consolidated

Mesquite NV  89027

702- 346-7200

435-862-5951

Mesquite Market

chris@mesquitemarket.com

Lincoln County Land Market

Nevada Ranch Properties 

Real Estate, Wall Street, Washington DC, Capitalism, Free Markets, Families, and Business.

All are caught up in the current market crisis and all are made up of individuals.  

What foundations do they all stand on? What can we really count on, for sure?

The Boy Scouts Oath says “On my honor, I will do my best  To do my duty to God and my country and to obey the Scout law; To help other people at all times; To keep myself physically strong, mentally awake, and morally straight”.

Scouts Law says; “A Scout is Trustworthy, Loyal, Helpful, Friendly, Courteous, Kind, Obedient, Cheerful, Thrifty, Brave, Clean, and Reverent”.

As the financial crisis deepens the greed turns to fear, creating real pain, and hopeless individuals.  Information and miss-information travel at the speed of light. The world has become a very complicated, fast moving, scary place.

We may be headed into challenges that could bring us to our knees. There are few places worse than being hopeless. Right now it is tough to be honest because things look bad, uncertain, and fearful. So many fronts, so many issues, so much of the bad in men, the bible is clear about these things. 

Our strength and future as a Nation and as a World can be nothing more than the strength and future of us all collectively, each individual is responsible. Every company employs individuals, each company is run by individuals, Washington and the government is made up of individuals. The Boy Scouts take it personally as individuals.

The real estate cycle will settle down, this cycle will hurt the largest number of people by the largest amount of money ever, for at least a few years, around the entire Globe. It was driven by greed and fueled by money supply. Real estate values were clearly inflated in value by fed policy, risky speculative investing, and leverage. Consumers waded deep into debt believing it was real estate appreciation and that it would never end. Excessive everything has become perceived as a necessity. The price tag will be high.

It is estimated we need to add at least a million homes per year to the supply just to keep up with new demand each year. The markets will absorb the supply. The money lenders will come back into the free market and find the fair market of the time value of money. There are plenty of dollars around the world that need to be put to work. 

We regularly see natural disasters that literally take everything from families, and there is a world of people who literally have nothing. Some will say, nothing is far better than the debt Americans are faced with today. The up coming election is about spending our money as much as it is any other issue.

We as individuals must accept personal responsibility for our debt, both personally and as a nation.  It is OUR country, OUR national debt, and OUR future.

Perspective about the worth we place on things like our cars, and homes. Do we value them as shelter and transportation?  Do we covet them for other reasons?  Is appearance more important than prudence?

Values in the Boy Scouts are about character. Values in our lives are not about dollars or gold, they are about taking it personally. If the market is getting you down or the world is scaring you, take heart the Boy Scouts are here.  

We may disagree on many things, but few can disagree with living our lives individually based on sound values, one and all.  They can not legislate our personal values, it is an individual thing.  Washington, DC and clearly Wall Street seem to suffer from a lack of personal values.

The alcoholic prays “God grant me the serenity to accept the things I can not change, the courage to change the things I can, and the wisdom to know the difference”. They take it personally, they knew hopeless.

Many of the families facing foreclosure and bankruptcy were bathing in the excesses not long ago. Many more innocent people are caught up in this mess. The market and the news surrounding it, is likely going to get worse.

Perspective is needed on values, what is really important, valuable, necessary, and required to be happy and productive.  A page from the Scouts, being helpful to others and humility will help us all.

The world can be a better place, we can solve the problems, and we can all do a better job at living our lives by our own values. Children can be taught personal values. We have faced much bigger challenges.

If you are feeling hopeless, count your blessings and go find someone who needs a hand. 

Chris W. Miller

ERA Brokers Consolidated

Mesquite NV  89027

702- 346-7200

435-862-5951

Mesquite Market

chris@mesquitemarket.com

Lincoln County Land Market 

Water for sale in bottles has become as common as soda pop. If you stop in at the corner convenience store you will pay around $2 for a quart of plain old water. That is $8 a gallon, and we thought gas was expensive!

Nevada water rights are currently available for sale at around $6000 per acre foot, an acre foot is 325,829 gallons per year.

For more information about water rights in Nevada and the opportunity to own this limited resource, which is selling for more than oil already at the convenience store, contact me!

Chris W. Miller

ERA Brokers Consolidated

Mesquite NV  89027

702- 346-7200

435-862-5951

Mesquite Market

chris@mesquitemarket.com

Lincoln County Land Market 

“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.

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? Should they be forced to liquidate these assets and take the hit?

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 income, use this figure as the payment (PITI), calculate the mortgage amount, this would be 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

Mesquite Market

chris@mesquitemarket.com

Lincoln County Land Market

Nevada Ranch Properties 

Many people today are asking this question, “Where is the bottom?” 

The media continues to be blamed for pushing out negative news, as if the news agencies made all those nasty loans! Many of the industries related to real estate and the current crisis emphasize;

“Look for the positives; it is a great time to buy”. 

June 2006, a local real estate broker adamantly said to me, “Stop talking that way about Mesquite, this is Mesquite and the prices WILL NOT COME DOWN IN MESQUITE!” Interestingly that broker still has many of the same properties listed for sale (2 years later) and is sticking to that story, no price reductions, also NO SALES! Now, those properties don’t just look over priced, but grossly, ridiculously over priced. Is this being positive? What ever! 

So let’s talk about a bottom, will the bottom be in terms of improved numbers of; 

Number of properties listed?

Number of properties vacant but not currently listed?

Number of vacant properties as a whole?

Number of closings per month?

Number of contracts going into pending monthly?

Number of households falling behind on the mortgage payments?

Number of NOD’s being filed?

Number of bank owned inventory (REO’s) for sale?

Number of bank owned property actually selling and closing?

Number of foreclosure proceedings pending or actually being completed?

Number of month’s inventory out there?

How about consumer confidence or sentiment?

How about the number of new home building permits being issued?

How about the number of whole subdivisions going into foreclosure? 

We have reached and past one bottom, “Easy to obtain mortgage money”, actually we passed that bottom some months back, and that is going to make getting past the rest more difficult, in the near term it will only get tougher to borrow money! 

For most people the term “Bottom” means when will  their home value quit falling, level off and then begin to appreciate again. This definition of the bottom will likely only arrive when most, if not all the other trends turn around and begin to make progress in the right direction. Most of these other trends could be called neutral at best today, and many continue to go the wrong direction. It appears to me, it is going to be some time before the “Bottom” for most actually arrives. Even then, we may be talking about homes that are worth two thirds of what they were two or three years ago. For some, the term “bottom” represents prices rising back to those old numbers! 

We are seeing sold and closed prices that I believe, we will look back at, and say those were near the bottom numbers but those sales are still too few and far between. The average asking prices and the consumers idea of what their home is worth today appears to remain a long way from reality or a bottom.  So for many the “Bottom” may remain an illusive concept shadowed in denial and wishful thinking. 

Footnote: If you are not planning to sell or use your home as an ATM, don’t worry about the market, eventually it will be OK!

Chris W. Miller

ERA Brokers Consolidated

Mesquite NV  89027

702- 346-7200

435-862-5951

Mesquite Market

Nevada Farm and Ranch Land

Nevada Water Rights

Lincoln County Land Market

chris@mesquitemarket.com

Eden Valley Farm

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

Mesquite Market

Nevada Farm and Ranch Land

Nevada Water Rights

Lincoln County Land Market

chris@mesquitemarket.com

Mesquite Nevada home building permits issued are still up. This should not be a surprise with Pulte/Del Webb’s Sun City Mesquite, now one year old. Most of the 209 YTD new construction permits went to Sun City. MLS verses Clark County records show buyers with agents paid slightly less per square foot, $157 on 62 sales from county records, $155 from MLS records on 23 sales. If nothing else, buyers who come out and register with an agent have the advantage of keeping Sun City on their toes; the agent can take the buyer to see the competition. You need to bring your agent (Please keep me in mind, I would like to apply for this JOB!) to Sun City on your Initial visit, or wait six months to go back, then bring me back with you to get re-registered.

The Mesquite Nevada land market is changing forever. In the past, all the land north of I-15 was controlled by just a few people. Today, with whole subdivisions going into foreclosure, the monopoly is shattered. This is very positive for the future competitive building market. You will be able to buy a lot, pick a builder, and shop the whole process. Good news for consumers. Estimates range from 10,000 to 14,000 vacant lots sitting out there in varying stages of development. Those numbers do not include the 13,300 acres (40,000 home sites estimated) with a six and a half mile border with Mesquite to the north in Lincoln County. This land is burning interest money at a scary pace, and will be brought to the market as soon as the people involved can get some things in order, like a water supply.

The re-sale home, condo, and town home markets are suffering from competition from every direction, new construction, foreclosures, old inventory of new construction that has never been sold or lived in, and desperate sellers.

You can clearly see it in the existing single family homes closed numbers, April had 29 closings at $168 per foot, May had 25 closings at $167 per foot, and JUNE had 30 closings at $140 per foot. The notice of defaults, there appears to be a wave of these coming, more foreclosures coming on the market, and the banks, well the banks are beginning to act scared. They are beginning to clear inventory at prices more like you would expect. We may not be seeing the bottom but there are some numbers coming through that make a whole lot more sense.

The highlight of the Mesquite, Nevada commercial real estate market can be summed up in a word, VACANCY. This excess inventory is going to take some time to clear. The City of Mesquite spent $80,000 on the Buxton study to promote business development in Mesquite. They have issued 56 commercial new construction permits over the last 30 months, so the builders and speculators bought into the boom anyway.

No single family lots closed. “The Chalet” sold for $550,000, and a commercial lot, actually it was a small house zoned commercial closed this quarter. No other commercial property closed through MLS.

Sun City Mesquite just announced they are building 41 spec homes; move in ready standing inventory, this is not good news for existing home sellers.

Depending on which side of the fence you are on, this market correction could be the greatest thing you have ever seen or possibly the worst.

The future for Mesquite Nevada Real Estate Market is BRIGHTER!

For your complete daily market update,  Mesquitemarket.com or tune into Radiomesquite.com for “Talking Real Estate” Saturdays at 3pm pacific time. Please feel free to contact me.

Chris W. Miller

ERA Brokers Consolidated

Mesquite NV  89027

702- 346-7200

435-862-5951

Mesquite Market

Nevada Farm and Ranch Land

Nevada Water Rights

Lincoln County Land Market

chris@mesquitemarket.com

Nevada water rights being piped to Las Vegas. Southern Nevada is a very dry place and Las Vegas is a thirsty city. The Colorado river has extreme demands currently with Arizona, California, and Nevada all drawing water from this limited resource. Agency seeks right to tap three watersheds

Investing in water rights has become the focus of many Wall street money managers and individuals like T. Boone Pickens. Would you like to learn more about Water rights for sale in Nevada? Flatnose Ranch offers both surface (Flatnose Spring) and ground water rights for sale.

Ruling grants Southern Nevada Water Authority 18,755 acre-feet annually of 34,752 acre-feet requested

How the Water rights laws work in Nevada.   More about Water Rights laws and the demand for water.

Eden Valley Farm includes water rights.

Chris W. Miller

ERA Brokers Consolidated

Mesquite NV  89027

702- 346-7200

435-862-5951

Mesquite Market

Nevada Farm and Ranch Land

Nevada Water Rights

Lincoln County Land Market

chris@mesquitemarket.com