Mesquite Market

Five short sale listings and some statistics; all listed at current fair market value, all are investor/speculator owners. Total amount currently owed to lenders on these is around $1,635,000.

 

Based on current fair market value estimates the net proceeds to the banks at close of escrow on the sale of these will be $900,000. That is five residential properties listed as short sales with an unrealized loss of $735,000.

 

Do you think the banks are holding these properties on their books with the asset value at what is owed, or what is likely to be reality, the actual net proceeds number based on current value and likely sales price?

 

They know how many properties they are holding currently, but they may not know the extent of future unrealized losses. They may not want to know reality. They may not want anyone to know.

 

Locally 62% of the active listed residential inventory is vacant. It is very difficult to know how large the number of unlisted institution owned properties currently is but it is clear that number is growing. The banks are holding many properties today.

 

As one agent and five properties with $735,000 in unrealized losses, who knows the magnitude of yet to be realized bank losses? We have given these same banks billions in tax payer dollars.

 

I believe we are headed to an all time historic high in institutionally owned residential real estate, and the commercial properties are next. Institutions like Fannie Mae and Freddie Mac are essentially government owned.

 

Many of the major banks are carrying very large and growing inventories of real estate and yet to be realized losses. The manner in which this inventory comes back into the market not only has the potential to have a huge negative impact on property values, but also in lost tax payer dollars. 

 

From my view and from my personal experiences dealing with these institutions, they get an F for efficiency at every level.  I get the distinct impression that the institutions do not really want to sell these properties right now. Keep in mind when they do sell they must take the loss, for real.

 

They are working through a small percentage, but at this rate the distressed properties are by far out pacing any efforts to clear the market, the numbers of bank owned properties are growing.

 

As the commercial paper market cracks and defaults, the foreclosures will rise and lead to more bank owned real estate, and more unrealized losses.

 

This deleveraging process appears to me to have some long legs to run on. When the dust finally settles, it will be those tax payer dollars, our money that will have to deal with reality.

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

 

 

The State of Nevada just got a little drier, which is tough news for many since it is already the most arid state in the nation.

 

The $550,000 cloud seeding program that produces as much as 65,000 acre feet of additional precipitation annually has been cut from the state budget. That is about enough water to supply 130,000 households per year.

 

The real pain will be felt by the rangelands, farmers, and wildlife who will suffer from less water. The cattlemen’s association, Nevada Farm Bureau, and Elko County Commission have urged law makers to save the program.

 

On average Nevada receives about 9.5 inches in annual precipitation. The decision is also at odds with the current weather pattern, as Nevada is suffering from drought conditions already.

 

Hay farmers will benefit as a result of less grassy rangelands, farmers will be forced to buy more hay. The hay farmers deserve a break this year anyway.

 

Irrigated farm land with water rights will benefit. Many basins are closed to additional allocations for ground water permits. For the supply side of this irrigated land our food chain supply land will see huge increases in value as time goes on.

 

Demand for water in Nevada goes well beyond agriculture in much of Nevada. Future population shift projections threaten to eventually strain the supply to the breaking point.

 

I currently have numerous parcels of irrigated land for sale with ground water rights. While agents across the nation tell their clients to lower the prices on all types of properties from residential properties to commercial centers, I am advising that it may time to raise the price of irrigated farm land with water rights in Nevada.

 

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

$4500 dollars in free money to anyone who will trade in a perfectly good car that gets less than 18 miles per gallon. Most of these new car buyers will borrow most of the additional money needed to purchase one of these new more efficient cars. So far so good, more efficient cleaner cars on the road, more auto sales have to be good for the car makers and therefore jobs and the banks get to make more loans.

 

Of course the $4500 isn’t exactly free, at least not to all of us as a collective group; we are the ones giving it away through our government.

 

Since when do I care about cars or government giveaways? I write about real estate.

 

New car loans will reduce the number of people we can sell homes to over the next few years. More consumer debt is and has been the problem.

 

Under the newer existing and newer yet to be completed financial consumer protection rules, underwriting standards for home mortgages are getting tighter.

 

Consumer debt to income ratios affect their ability to take out a new mortgage. Mortgage lenders will count the new car payment loan against the borrower. For some of the cash for clunkers buyers that will be taking on a new car payment, that additional debt will push their debt to income ratio too high to qualify for a new mortgage.

 

In order for the housing market to really open up, consumers must reduce debt, not increase it.

 

The $8,000 first time homebuyer’s tax credit and the cash for clunkers are two of the most direct to the consumer stimulus funding programs. Both will help get money moving again.

 

If you plan to use both programs, buy the house first. Let me repeat that, buy the house first. The auto lender will in general view home ownership as a positive thing. While the mortgage lender may use the new car loan as a reason to deny you a new mortgage.

 

Whether you qualify for the $8,000 first time home buyers credit or not, if you think you may want to jump into homeownership in the next couple of years. Take the time to talk to a mortgage lender about your debt to income ratio and what a new car payment will do to your ability to get a mortgage. Please do this before you run out and test drive that new car.

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

 

Affordable housing is about living life with financial options.

 

For some the home they live in is everything, it defines who they are and it is their primary investment. For others their home is a place to live. People have a diverse view on what the house they live in means to them, and people have different priorities.

 

We all have limited resources, from the federal government, to state budgets to Bill Gates and Warren Buffet. Typical retirees have fixed incomes and limited ability to increase net worth. Broad spectrums with one thing in common, limited resources.

 

It has been said “Money is good for the good it can do”. Money has time value, at 6% you pay $6000 per year to borrow it or get $6000 per year to lend it, time value.

 

Based on the fundamental principles of limited resources and time value of money, affordable housing is about personal priorities and the option of discretionary spending.

 

As an example using 6%, a good historical average $300,000 has a time value of $18,000 per year, while $100,000 has an annual time value of $6000 per year. Whether owned out right or mortgaged, you are either losing interest income or paying to borrow.

 

Sustainably Affordable housing offers the opportunity to those who chose to live in the $100,000 home to take the $12,000 per year difference and do as they wish in retirement. They may want the extra money to travel, spend on the grandchildren, or contribute to charities. The list is as diverse as people are.

 

There are those who would like to paint sustainably affordable housing into a “those people” class war. They like to use terms like workforce, subsidized, and low income, emotional charged stigmatized words.

 

Future retirees will come to view sustainably affordable housing as smart, prudent, comfortable, conservative, and emotionally satisfying. They will view their home as a place that meets their needs to live comfortably.

 

They will take the money they save and use it to enjoy life. As people grow to appreciate “house is a home” as a concept, rather than as an investment or measure of personal worth. Excess will be viewed as insecure arrogance, wasteful, and just plain stupid.

 

Government spending, industry bailouts, cap and trade, crumbling infrastructure, an aging population, escalating health and energy costs, and taxes, all point to one thing, we will contribute more and receive less, each and everyone of us, its guaranteed. 

 

Eventually proper solar exposure and appropriate overhangs will define modern homes like indoor plumbing and electricity once did. I know you laugh now, but when you go outside in July in Mesquite, do you seek the shade, or in winter a warm sunny wall, it is intuitive and it is the future of housing. Sustainable affordable housing is basically energy efficiency combined with proper solar orientation.

 

Sadly many Mesquite retirees did not have affordable housing as an option. They have bought large expensive homes and in the process given up many of those discretionary spending options. This of course is really what affordable housing is all about, personal financial options. The City of Mesquite has avoided any earnest discussion about affordable housing for years now.

 

Given a clear picture of retirement goals and options, many well healed retirees will chose sustainably affordable housing. Not because they can not afford to spend more but because they have other things in their lives that are far more important. Life is short and priorities are important. Status and image are fleeting and hollow at best.

 

Sustainably affordable housing has been given a bum rap, a bad image, although this has come mostly from those concerned with status and image.

 

Mesquite has an opportunity to shape the future; sustainably affordable housing is achievable here. It will require bold leadership with commitment and action today. The future will be here before we know it.

 

Many future retirees who can spend $300,000 will come to Mesquite to buy those $100,000 green sustainably affordable homes. The reason is simple, they want to spend that extra $12,000 a year having fun, rather than an extra 1000 square feet to heat and cool.

 

$1000 a month extra spending money for the average future retiree will change their lives dramatically. It would be very good for local businesses as well.

 

Interest rates have been historically and artificially low, this will not last forever. The average conservative retiree will not take out a mortgage more than about 2 to 2.5 times their annual gross income. This points to a greater urgency today to address tomorrow’s sustainably affordable retirement housing.

 

Mesquite’s future depends on decisions made today by the current leadership and administration. They need to hear your thoughts on affordable housing in Mesquite.

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