Mesquite Market Quarterly Report/Re-Branding
Mesquite MLS recorded 20% less total sales volume from the second quarter of 2008, contrast to Las Vegas where sales volumes are hitting all time records. Average asking prices for single family homes in Mesquite have not dropped much if at all, still around $348,000. While Las Vegas Median resale home price dropped to $125,000 for June 2009.
Notice of defaults, those falling behind on their home payments continue to increase as do foreclosures. Mesquite is unique in the sense that much of the housing in Mesquite was built and sold in the past ten to twelve years. Given the fact that much of the distressed property is selling for prices close to those of ten to twelve years ago, that puts virtually every buyer during the dozen or so booming years under water, those who paid more than they can now sell for at today’s values. Many markets you hear about on the nightly news have owners who have been in their homes for twenty or more years, they can still sell at a profit. Mesquite has few owners with that luxury.
Not a single commercial property closed during this past quarter through Mesquite MLS. Did you know that one of the only two commercial sales in the past two years in Mesquite, was to The City of Mesquite, and they paid $118 per square foot or $3,858,000 (97.7% of asking price) and the building does not have a single tenant improvement. This struck me as odd since the City of Mesquite is a rather large land owner.
In planning and developing Mesquite, The City of Mesquite, builders, developers, and consumers have completely ignored any solar application, our greatest resource. Not a single builder offers solar applications, not a single subdivision has been designed for proper solar orientation, not a single incentive or example coming from The City of Mesquite in areas of sustainable energy efficiency. When it comes to recycling, drive the neighborhoods looking for the blue recycle bins, it is joke. These programs require promotion and examples starting at the top.
The number of retirees willing to mortgage their financial future and emotional well being for a larger home in a more prestigious gated expensive neighborhood is shrinking fast. The real demand appears to be trending to smaller, less ostentatious, more cost efficient, financially sustainable housing. This trend is likely to intensify. Studies indicate the peak birth year for the baby boomer generation was 1960; they will turn 50 next year. These of course are the Mesquite housing market target for years to come. Based on current statistics, studies also indicate this group will not be retiring wealthy, they will be lucky if they have a pension, their social security income benefits are in question, and relatively few have much of an IRA if at all. They currently are faced with kids in college, and aging elderly parents in need of assistance including financial needs. That home equity they have been counting on for years as a nest egg is now all but gone.
Today in the broader market of retirees, they are counting every penny and planning, purchase price is only one consideration. They are carefully evaluating costs of future property taxes, HOA dues and what the reserves must cover, ie: repaving streets, etc, SIDS special improvement districts, (basically bonds approved by the city to allow the developers to pass on to the consumers the costs of developing the neighborhood). Then they have fears of the great unknowns, health care, medical expense, inflation in the cost of living, etc. They are nervous about the security of their financial futures.
Everyday they become more keenly aware that more leverage (debt) is not the solution. This target market is going to demand, require, and accept housing that is smaller, comfortable, efficient, financially sustainable, and within their means.
Remember the small two bedroom one bath homes built in town across America after World War II? They raised families in those homes; we are talking about retired couples here.
The Rich, Rewarding, Wealthy, Palm Springs pitch of the recent past, which was interpreted by many as elite wealthy snobs living in an unaffordable over priced community is now going to be replaced with “The Nations Sports Destination”. The City of Mesquite, council, and administration have opened escrow on a deal to sell around 900 acres of city land. They had to down zone it to be allowed to settle on the near give away price, and the re-branding term “The nations sports destination” shall become the new focus. What happened to the retirees?
Sports Center or not Mesquite’s future depends on reaching out to and offering the average financially conservative retiree a truly sustainable and affordable place to call home.
Right now Mesquite has all the tools to create an opportunity to meet the needs of the future for this mass of retirees. We have the land, water, sunshine, location, amenities, and tax structure. The 900 acres could be used to develop affordable green retirement homes. The re-branding could be “The nation’s most affordable green retirement community”.
What Mesquite is missing is leadership, a sense of direction, a real plan and a commitment to follow it through. The City of Mesquite can only position the city to meet the needs and financial constraints of the retirees with planning and leadership today. Today’s leadership must be held accountable for the decisions being made today, accountable to the citizens of Mesquite. They must be held accountable for the disposition of the city owned lands including the price tag, and the planned use of that land. They must be held accountable today for the future direction and success of Mesquite.
Re-branding an entire town, changing direction mid stream warrants public input. Changing the direction of Mesquite deserves understanding, transparency and consensus of a large majority of the current population. While elected officials and their administrations will be long gone, the citizens will still be here living with the consequences of today’s decisions.
The decisions being made today by the current City of Mesquite powers that be appear to me to be based upon desperation and fear. They say the sports complex on the 900 or so acres of our land will be developed with a half billion dollars, are those funds committed? They say it will bring people and jobs. That is the pitch to justify selling the land so cheap, remember that is our land. How many of those jobs will offer incomes to people who can actually afford to live in Mesquite at today’s prices? How can this complex possibly cash flow, with a half billion dollar investment? What is the real motivation? Mesquite citizens deserve more transparency on this transaction.
Mesquite’s undeveloped acres could be developed as a model green affordable community that could gain national attention and build on the current city plan and image. Mesquite could gain national attention as a green affordable, financially sustainable place to retire. This could be the collective brain child of city planners, local engineers, local builders, local suppliers, and local realtors, on and on. Bringing with it positive national attention, jobs, and retirees. Re-branding that is in line with Mesquite’s current plan and past efforts that will pay dividends forever.
If The City of Mesquite can sell 900 acres for the price being offered to the sports complex developers, then we can develop very affordable retirement homes on that same land. Homes that could sell for well below $100,000.
There will plenty who will say it can’t be done, remember they told Columbus he would fall off the edge of the earth, don’t you believe them. This country this built on ideas that people said couldn’t be done. It may require everyone working on smaller profit margins, builders, and contractors working on cost plus margins, but those are still jobs. It may require ideas and technology involving living spaces that some will say are unacceptable, but the future of retirement housing is going to look different. Open minds and very affordable pricing will open doors we never even knew existed.
Chris W. Miller
ERA Brokers Consolidated
Mesquite NV 89027