Cash is King for Las Vegas real estate
ReviewJournal.com – Business – Speculators come back.
On this site I have been writing about the recent signs of recovery for the Las Vegas and Sacramento real estate markets. These two regions were among the hottest during the real estate run up and hardest hit when the bubble burst. The article linked above from the Las Vegas Review Journal gives a highly anecdotal account of investors coming back into the Vegas market. I think the best way to get a feel of the article is selected quotes:
As a poker dealer at The Orleans, John Hill talks to players almost every day who have come to Las Vegas from faraway states and foreign countries. They’re not all here for the card game. That’s just something to pass time when they’re not out scouring Las Vegas for a good investment home.
Many of them are cash buyers, Realtor Robin Camacho of Top10Real EstateValues.com said…..“I’m working with so many buyers, it’s unbelievable,” Camacho said. “It’s been tough getting offers accepted lately, even offers for well over list price. Right now, I’m working with at least seven or eight serious, well-qualified buyers — some strictly cash — at the same time, which is incredible, even in a good market.”
A report from Credit Suisse on the Las Vegas housing market said buyers are back and looking for deals.
Local resident Wendy Reese was able to snag a foreclosure home in northwest Las Vegas….“I had been doing my research and every time I found a home and ran to it, it was like, ‘We have 12 offers.’ Some were cash deals. It’s definitely a buyer’s market.”
Most of the loans that Patrick McNaught sees as president of Greystone Financial Group in Las Vegas are primary residents who’ve been “sitting on the sidelines,” priced out of the housing market and renting in the meantime. They’re buying with Federal Housing Administration financing and 3 percent down, he said.
I repeat, this is primarily anecdotal evidence and prices have not yet stabilized, but it appears that the large number of properties that have been taken from imprudent mortgagees are being sucked up by buyers sensing a bottom of the market. Primary home buyers are starting to come off the sidelines and get into a well priced home with 3% down and FHA mortgages. These will be buyers who have steady jobs, fixed mortgage payments and in for the long term. The investment side comes from buyers who can pay cash or put down a large cash down payment. I would define cash buyers as “smart money” at this point in the cycle just from the fact they have the cash to make these types of investments. Las Vegas especially has a long term appeal to investors with a net inflow of 5,000 to 6,000 new residents per month.
Next up: Have prices bottomed in Sacramento?
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