Mesquite Market

Mesquite Nevada homes for sale and local builders have a new head wind, Sun City Mesquite. They are celebrating one year in the market with the announcement of construction of 41 spec homes. They were on “Talking Real Estate” yesterday and said the average base price was in the mid $130 per square foot.

During their first year here in the Mesquite market they basically only did pre-sale homes. They are changing that approach, becoming more aggressive and building homes as standing inventory. Brand new homes, finished , ready to move in, being offered with great incentives, and below $150 per square foot.

Seller’s of existing homes are not going to be able, any longer to ignore this giant standing in their backyard. The Mesquite Nevada real estate market for homes has changed forever. I remember saying that on Radiomesquite.com the day they opened, June of 2007.

This new approach by Sun City Mesquite,for our little market is like having a thousand pound gorilla in the room with you. The Mesquite Nevada homes market for existing has been selling on average above $160, this year, above $170 last year , and above $180 the year before that.

For the Mesquite Nevada homes marketthis is more than just a real estate cycle down turn, it is a new market, new competition. Pulte/ Del Webb, Sun City Mesquite also said yesterday on “Talking Real Estate” that the newest Mesquite Nevada Golf course will be open at Sun City late 2009.

Sun City Mesquite will be building new home here for many years. Based on the fact that the average asking price for existing homes listed over the past thirty days was over $175 per square foot it seems Sun City Mesquite is going to continue to do very well, and the existing home owners will have to wait.

For more information about Mesquite Nevada Real Estate.

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

If you say to a friend, “you better wear your boots and take an umbrella because it is raining outside and the weatherman says, it is going to rain for the next two days”, are you being negative?

I know, attitude is everything, PMA, lemons and lemonade, bloom where you are planted, etc.

Facts are still facts, and the consumers rely on us for information, I don’t believe HYPE is any where in the definition of information. They look to us for trends that we are in the unique position to see. If you know your market, and see the trends are headed in the wrong direction, do you just omit facts? Or do you tell the truth at the risk of being labeled negative, or a fear monger?

I for one will continue to speak the truth, good, bad or indifferent. I believe my clients deserve nothing less.

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

“Housing Market Weakens”, “Home Builders to Offer Incentives”, “Option Arms and other exotic financing options could be Hazardous to Your Financial Health”. Of course these stories are very old news, two years old. The talk of a real estate bubble started clear back in late 2004. 

Chris Miller

Mesquite GMAC Real Estate

Mesquite NV  89027

702 346-9050

Mesquite Market

chris@mesquitemarket.com

Construction starts are at the lowest since 1997, yet builders confidence this month is at the highest point in almost a year.
 
Personal saving rates have been negative for the past two years, the only other time in history we ran negative personal savings rates for two consecutive years was during the depression, yet consumer spending is strong and so is consumer confidence.
 

Homes prices locally, at least ASKING prices are at an all time high at $209 per square foot for the average single family home in Mesquite.
 

Actual sales prices on the other hand for recently closed homes are continuing a downward trend, with the average new home price year to date down to $182 per square foot, from $194 during 2006, and existing home prices are down to $173 per square foot year to date from $185 in 2006.
 

Contradictions everywhere you look, all creating great opportunities for the hyped up spin misters to fleece the uniformed consumer.
 

The term “caveat emptor” applies today in the information age as well as it did any time in our history.
 

Trust is the key, facts not feelings or opinion. Each market, even each neighborhood has its own specific numbers, each has ebbs and flows. Many factors and variables influence each market.
 

Buyers in today’s market are in particular peril. Real market knowledge, not sales hype will help keep you from making a huge financial mistake in this very confusing time.

Chris Miller

Mesquite GMAC Real Estate

Mesquite NV  89027

702 346-9050

Mesquite Market

chris@mesquitemarket.com

NAR reported homes sales dropped by 8.4% in 2006 from the frenzy of speculative buying in 2005.  This drop is the largest since 1982. Is this the only comparison we can draw between the 2006 and the 1982 real estate markets?
 
In 1982 when interest rates went above 13%, in some cases as high as 15% or even 17% on home mortgages it created the problem of affordability. With rates so high it made house payments unaffordable for many buyers. Inventory numbers went way up, and so did “days on market” for listed property. It resulted in lower prices to compensate, a much slower market, and it took the market years to bounce back. Appreciation went backwards in many markets, homes were declining in value. Whole neighborhoods of new homes looked like ghost towns of vacant homes. The ripples of the slower real estate market went out through the jobs and materials manufacturing markets.
 

In the early 80’s many builders and developers went bankrupt; they were professionals, and by nature speculators. They knew the risks involved in their business. Today the type of real estate speculator is much broader than those professionals who know the market risks. The average profile of the Mesquite market speculator over the last few years has looked much more like “Mom and Pop” type investors.
 

Today the issue is not interest rates, but it is affordability. Interest rates are at or very near forty year lows. In the 80’s they lowered rates to help ease the pain. With inflation a primary concern for the Federal Reserve board, few knowledgeable people really believe they will lower rates much anytime soon. So affordability will have to be addressed at the price level, not rates. 
 

Where does this leave the market today?
 

For average Americans homeownership is their largest investment and a very important asset in their overall financial picture. Much of the recently created wealth has already been pulled out of the property, through refinances, and equity lines of credit. More than one trillion in adjustable mortgages will reset this year bringing higher monthly payments. For many homeowners the last three years of market has felt like they just “hit the lottery”. Many more have become real estate investment guru’s equal to Donald Trump himself, just ask them. Much of the market of 2005/2006 was fueled by greed, poor judgment, uninformed decisions, and almost free money.
 

Inventories are growing along with current “days on market” for listed properties. Ultimately, supply and demand will level the playing field. Demand is always affected by affordability. Cash flow on much of the recent speculation properties will fall far short of supporting it, and will have to be made by the investor. In many cases this negative cash flow was not factored into their plan. If prices decline, given the recent increase in 100% financing, many more may find themselves up side down with no way out. Getting out could prove to be painful process; foreclosures are currently on the rise. Will the ripples go throughout the economy as they did before?
 

While many things are different and the economy appears to be strong, connecting the dots from 1982 to 2007 may be easier than many would like to believe.
 

What does this all mean to you, maybe nothing unless you work in a related industry, or are planning to buy, or trying to sell a property. For buyers it could offer you the luxury of time and real negotiation power. Sellers will sooner or later have to face the facts and price their property competitively in this new market.
 

For most of us working and earning a living in real estate in 1982, it was a year we would rather not be reminded of!

Chris Miller

Mesquite GMAC Real Estate

Mesquite NV  89027

702 346-9050

Mesquite Market

chris@mesquitemarket.com

This last week I spent considerable time negotiating for a seller, the offer we were working with was well below their asking price. After a couple of counters back and forth we came to a standoff.

During this process we talked about the current market conditions and the seller’s competition in the market. This particular property has been for sale on the market for over a year and has not received a single offer, and the seller is very frustrated.

Some sellers want to be informed, actually most do, and many consider it their responsibility. While others really don’t want to hear about the market facts, they don’t seem to be interested in the truth; they prefer to live in a dreamland of denial.