Mesquite Market

First time home buyers, not really first time, just not in the past three years, home buyers tax credit “free money”, likely to be extended even expanded. They are raising the income level for those who qualify to expand the program.

A generation of people of the United States is willing to tap into, possibly bankrupt their grand children’s financial future to prop up the value of their own assets, their homes. We as a society seem to continue to refuse to accept responsibility for the housing bubble.

First time home buyers tax credit of $8,000 will be extended and most likely expanded in a desperate attempt to put a floor under home prices. Those dollars they are printing and handing out will have to be paid back by the children of today and tomorrow.

You hear plenty of grumbling about government spending and waste. Many people complain about bank bailouts and stimulus frivolous programs. Washington DC is fighting to prevent private corporations from paying top executives too much in compensation.

It seems all you hear these days is how much money the current administration is spending and wasting. They now own banks, auto companies, and some insurance companies.

Yet when it comes to individuals and their own home values anything goes. If it will save the price of my home from falling further, then go for it. Extend those credits, give that money away. Greed at its most despicable level, at the expense of our children.

For the most part improved sales have only been at the lower end of the price ranges. The mid and upper range home values continue to fall. What most consumers pushing to extend these credits do not seem to understand is that we are pulling sales from next year, extending the pain.

The other growing issue is the fact that most of the mortgages being made to people receiving these tax credits, and I will say it again “free money from the government”

are high loan to value government guaranteed loans. The buyers have almost none of their own money in the game, no equity. No reason to stick around if the going gets rough.

The market values went up because of this type of funny money and mindless speculation. We are now going to use our children’s future hard earned tax dollars to protect those values based in our own mistakes and greed. We should be ashamed.  

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

When most people think of farm land and ranch property, they think open ranges, hay fields, cattle and cowboys riding horses.

Wall Street seems like a far off place in another world. A fast paced place driven by profit and greed.

It seems the classic contradiction, slower paced, straight talking, down to earth folks making their living off the land verses the Bernie Madoff and George Soros types.

Truth is, the story I am about to tell you just may be a little sad, because Wall Street is buying up the farm. Over the past few years investment power houses like BlackRock, and retirement plan giants like TIAA-CREF has been plowing money into farmland. In Nevada farm land generally means land with water rights, due to the arid climate.

These are smart people who are motivated by money and profit.

Here is the deal; the fundamentals are in place for a long term boom in prices for everything AG-related. Consider this; in 1960 there were 1.1 acres of arable farmland per person globally, according to data from the United Nations. By 2000 that number had fallen to .6 acres. Over the next 40 years the world population is projected to grow from 6 billion to 9 billion.

According to Joachim von Braun, director general of the International Food Policy Research Institute, “Land is scarce and will become scarcer as the world has to double food output to satisfy increased demand by 2050”. “With limited land and water resources, this will automatically lead to increased valuations of productive land.” Von Braun goes on to say, “It goes hand in hand with water, Water scarcity will probably increase even more than land.”

Water in Nevada is today in short supply and clearly demand will outpace supply as they continue to close basins to new permits. Water rights in Nevada have another issue facing the dwindling supply, the demographic shift of the baby boomers to the more tax favorable warmer climate. Choices, decisions, are being made today, do we use the water for agriculture and food production, or do we pipe to Las Vegas for culinary use.

Farmers and ranchers want to stay in the business, but millions of dollars waved under their noses make it tough to say no to the sale. Many will stay on and lease to continue to live the lifestyle they love. These lease payments are cash flow on the investments. Could it be a win-win situation?

Commodities guru Jim Rogers says, “I’m convinced that farmland is going to be one of the best investments of our time.” 

Meanwhile, B.L. Harris, acting director of the Texas Water Resource Institute, knows well the problems of the Ogallala system. “The one big issue with regard to the Ogallala is the fact that the annual recharge is much, much lower than the extraction rate that we are putting on the aquifer at the present time. The aquifer is over-drafted to a substantial extent.” The Ogallala is one of the world’s largest aquifers covering 174,000 square miles; it runs from South Dakota to Texas. Some estimates say it will dry up in as little as 25 years.

Farmers are smart and they talk, they may wear overalls and talk funny, but farming is older than Wall Street. Water and food are the sources of life for the planet, demand is guaranteed to grow. There are few guarantees on Wall Street. Farming is a difficult business, but it is a fine tuned machine, executed right it is a profit opportunity.

Chris W. Miller is Nevada irrigated farm and ranch land specialist with ERA Brokers Consolidated. Chris has Nevada farms as small as 266 acres with ground water rights, to Nevada cattle ranches as large as 34,000 acres including rangeland leases, listed and available for sale. For information about Nevada farm and ranch land with water rights call Chris today 702-346-7200 or 435-862-5951

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

Fortune magazine, June 22, 2009 issue has a good article on “Why Farm Land is Hot”. Why ETF’s are investing today for the long haul on the food and water shortages in our future. From 1960 to 2000 the world went from over one acre of arable land per person to just over a half acre of arable land per person.

Growing populations and the shrinking supply of arable land will be a key focus of humanity as millions starve in the not too distant future. Water in many locations is the key to food production.

Water rights in Nevada are our most valuable resource. Irrigated agricultural land is available and the prices are increasing. Many basins in Nevada are closed to any future additional water rights; the supply side is very limited and will not increase. While demand continues to grow, with or without future housing developments.

We have cattle ranches with live springs filling stock tanks to water the cattle, and the ranch owns those water rights. We have sections of land with irrigation pivots watering grains like wheat and barley, as well as potatoes, and alfalfa. These irrigation pivots are fed from wells on the land and the farmers own those water rights.

Many farmers are willing to pay handsome lease payments to farm this ground, offering good rates of return to investors. You can own a half full strip mall with falling rents and potential future higher vacancy rates, or farm land with water rights.

If you have the means and are still not sure of the future demand, check out what the executives from some the nation’s largest agricultural companies have to say about the future demand.

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

Sales are up and prices are down and falling!

Beware of pending home sales numbers, the conversion rate from pending to actually closed transactions is falling daily as deals blow up. Pending short sales in general are not closing. When you hear pending home sales, it is a misleading indicator. 

In Mesquite we actually closed:

                                  Median Price                $ Per Square foot

39 Resale Homes         $192,400                         $113

13 New Homes             $208,984                        $125

15  Condos                    $87,500                          $77

29 Town Homes           $130,000                         $88

Total 93 closed sales     $150,900                         $99

43 of the total 93 were distressed properties.

229 listings went out of the active inventory as failed. Active available listed residential property remained stable at around 400 with over 60% vacant.

221 new listings were added to active and 85 of those were distressed properties, either short sales or bank owned (REO) foreclosures. Notice of defaults continues to increase.

2 vacant lots sold in Calais and averaged $125,000.

No commercial transactions closed. Vacancy remains at historic high rate in all categories

The market is averaging around twenty active resale listings at Sun City, but you would never know it since they do not allow signs, period, even inside your own window.

Over 50% of the current pending transactions are distressed properties. The banks are holding more and more real estate as defaults rise and individuals realize they are stuck as well. Unrealized bank losses are mounting as wealth evaporates.

The amount of shadow inventory is impossible to calculate. Based on unlisted bank owned property, defaults and failed listings, the number is far larger than the 400 active listings, maybe double.

Given the future uncertainty in taxation, health care costs, income, asset value growth, cost of living inflation, and home values retiring buyers have become increasingly cautious. The market is mainly being supported by high loan to value government backed FHA loans, and interest rate risk appears far greater than home price increases. Prices continue to fall.

There are seemingly good values available…….Buyer Beware!

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

Mesquite Nevada Real Estate Market Still on Life Support

If the Mesquite, Nevada real estate market were a patient in the hospital, it is still in ICU. The market remains on life support, plagued by high vacancy, defaults, foreclosures, existing, and new home supply. Builders continue to put downward price pressure on existing home sales with lower pricing and incentives.

Then there is the shadow inventory. The picture is clouded by the bank owned REO properties as the banks fumble with unrealized losses, those toxic assets. Clearing of this segment of the market will be a pivotal point, but it remains unclear as to how many are out there and at what price will they be liquidated. As the banks push these properties into the market prices continue to fall.

The main support in the market is coming from your tax dollars in the form of first time home buyers tax credit, and high loan to value government backed loans. Cash buyers and investors are nibbling around the edges, but remain tight fisted and cautious.

The next few quarters will bring more competitive pressure to the market from banks, builders, distressed sellers, and short sales. Prices should get even better for buyers willing to be patient.

Recovery will be hampered by new tighter lending regulations being developed and implemented at this time. It appears excessive leverage of debt will not be allowed.

Clearly there has been a shift within the consumers and the world as to how they view leverage and debt. Affordability will be high on the radar screen of all.

Remember the market cheer leaders have their own motives and agenda.

Buyer beware continues to be the smart buyers maxim.

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