State and federal policies that were supposed to support home ownership have backfired and become anti-homeowner. The policies have locked out future Las Vegas homeowners.
AB 284, enacted in 2011, had good intentions, but the results have been disastrous for the Las Vegas real estate market. Most bank servicers have not been able to file notices of default since October of 2011. This has created an artificial shortage that is unprecedented.
There are now 380 bank-owned homes available on the market,466 short sales on the market and 2,290 traditional sales. These traditional sales are mostly flips and investors unloading near the peak. Fifty-nine percent of mortgages are still underwater in Southern Nevada.
What’s so astonishing about those figures is there is no real shortage. There are 50,000 vacant homes in the valley and average owner-occupants have slim to no chance of winning their offers.
After the passage of AB 284, many homeowners realized they could live for free for long periods. Thousands of homeowners are on years three and four without making a mortgage payment. Lender Processing Services reported a few months ago that the average person who stopped paying has been in his home more than 24 months.
The banks were slow to foreclose before AB 284. Now, it has come to a virtual standstill. The mortgage bankers association report showed that more than 74,000 homeowners were 30 days late or more. According to a recent report from the Federal Reserve out of Atlanta, laws that delay the foreclosure process actually decrease successful loan modifications and short sales because “Homeowners find it more lucrative to live for free for years than participate in a program.” This is why the short sale figures have begun to fall and strategic defaults are increasing.
It’s quite obvious the state law has artificially reduced the supply. Now we can add something else to the mix: Major hedge funds have swept into Las Vegas with cash to buy as many homes priced below $250,000 as possible and rent them out, stomping on any owner-occupant offer in their path. Traditional residential real-estate had no interest from Wall Street, but because of the extremely low interest rates engineered by the Federal Reserve, investors are starving for a return on their money. The cash flow from rentals are filling a void that the low-interest environment has created.
The ironic part of this policy is the Fed pushed down rates intending to promote home ownership by allowing homeowners affordable mortgages. Instead the policy has fueled the major hedge funds to purchase homes with cash above current market value. Then the funds will rent the home to the same people who were trying to buy the home. The result is renters pay twice what their mortgage payment would be if they had access to inventory.
There is no hurry to fix this problem anytime soon.
The flip side of the coin? Las Vegas is enjoying a miniboom again. Having close to 80,000 homeowners not paying their mortgages has given a big boost to our local economy. Approximately 80,000 x $1,200 (average rent or mortgage) = $100 million a month going into our economy. This money ordinarily would not be disposable income. That’s $1.2 billion a year being pumped into our economy, and that is far more efficient than any government stimulus. It goes directly to retail, new cars, restaurants, etc. No red tape in the way.
Ninety days after AB 284 became law, retail sales were up 13 percent, even with a slightly smaller job base than 90 days previous. That shows the boost in spending from locals that stopped paying. Builders’ sales doubled six months after AB 284 and values have shot up, a la 2005.
It’s not rocket science to predict what will happen next. We will see another 20 percent appreciation in prices over the next nine months. AB 284 will be amended, the national settlement servicers will have sold most of their loans to new servicers who don’t have to follow the same guidelines. Vacant homes and delinquent loans will be converted to available inventory in the second half of 2014. The second bubble pop in less than a decade will begin.
And what of those hedge funds that are buying up homes with cheap money? Well, with tens of thousands of homes being converted to rentals, rents will drop, making the rent-to-price ratio fall. Housing yield will become far less attractive. The funds will find the homes are not generating the cash flow they had told their investors they would. The next step will be to sell off quickly and cash in on the higher price and 40 percent capital appreciation. Nobody wants to be holding the last bag when the sell button is hit.
If that all sounds familiar, it should. The mortgage-backed securities exaggerated the borrowers’ income during the first bubble. This time the rents on the homes are being exaggerated. Just as there was a fire sale on the mortgage-backed securities to get top dollar before they dropped, so it will be with the homes. In fact, most funds are predicting to sell in 18 to 45 months.
Nevada has an opportunity to capitalize on the great California Exodus. This is a once-in-a-generation event. Companies are fleeing California to Arizona and Texas. This is happening now. Nevada has taken itself out of the selection process. The lack of available housing is a top factor in corporations relocating, and we finish last in that category.
The first step in this process is to open the closed housing market. Release the 50,000-plus vacant homes now. Make housing available to the average American again. Allow Nevada to diversify, and unleash the state’s pent-up economic capacity before it’s too late.
Steve Hawks is owner of Platinum Real Estate Professionals in Henderson. He can be reached at 702-458-3999 or email@example.com. A version of this column was presented as a speech to the Certified Commercial Investment Event on Feb. 27 at The Orleans.
The message here is simple, the government is not releasing homes, there are no banks to work with, people are still in there homes up to 4 years not paying there rent…What??? Holy cow!!! There must be some seriously dirty tile and grout I will be seeing soon…I can’t imagine 1 years without Professional Tile and Grout Cleaning Service, can you imagine 4 or even 5 years w/filthy grout? (Trust me, these people aren’t putting a nickel into there house while living for free) You’ll need our service…
As soon as you secure your new home, gladly call us, I guarantee you’ll be happy you did! Never mind the aesthetics, it’s the funk (health issue) on the floors…Most would say GROSS!!!
God Bless Las Vegas, NV
Professional Tile and Grout Cleaning Is the most effective and efficient service in order to make your floors recover back to 85-95% (or even 100%) back to its original color. Small owner/operated companies are your best shot, as they typically take pride in what they do, and charge more than a fair/reasonable price in doing so. Most jobs set-up to break down should take approximately 1.5-2 hours per 1000 square feet and your back in your home or office back to normal fast. Some furniture should be put back in a few hours, and area rugs and carpets maybe put back that evening. Sure does beat being on your hands and knees for the whole day, and Professional Tile and Grout Cleaning Companies like Las Vegas Tile and Grout Cleaning welcome you in observing instantaneous results! We are their to earn your business respectfully!
Las Vegas Tile and Grout Cleaning is an Owner/Operated Local Company owned by Michael Marcus. Michael has been a resident of Las Vegas, NV for over 25 years. Over 6000 Local Las Vegas jobs completed since 2001.Family man of 6 looking to earn your business respectfully.
Las Vegas Tile and Grout Cleaning cleans floors, counter tops, shower stalls, or any hard surface that may cross our path. Some common materials we clean are Porcelain, Ceramic, Travertine, Marble, Mexican, Saltillo, Granite, and more surfaces. Typically the tile and the grout is dirty, however, the grout is the job we are their to earn our business with the most! We take grout back to 85-95% OF IT’S ORIGINAL COLOR/CONDITION WHEN FIRST LAID!
Las Vegas Tile and Grout Cleaning brings approximately $100,000 worth of equipment to your residence or place of business and can reach up to 300 feet to your deepest part of your house or space. When called for service, your are scheduled right away with no delay. I see you as soon as your ready! Typically the day we are their for estimate/quote, we are set-up and ready to go forward with the work immediately.
Las Vegas Tile and Grout Cleaning when called for your first service, you are scheduled right away with no delay. I see you as soon as your ready! Possibly the day you call! Typically the day we are their for estimate/quote, we are set-up and ready to go forward with the work immediately. Typically, 1000-1500 square feet cleaned and sealed 2 hours set-up to breakdown. Very effective and efficient!
Las Vegas Tile and Grout cleans your tile and grout with high powered machinery, (safe indoor)alkaline based chemicals made for tile and grout cleaning, bristled brushes, floor buffers, specially designed grout cleaning attachment tool, plus physical hands and knees hard work especially in the kitchen and most traveled areas. When cleaning process is completed, clear water based sealer (DuPont) will be applied throughout.We are start to finish business which means no breaks (typically) and meant to be effective and efficient.
Kitchen tile and grout is most definitely the dirtiest in the entire house…Main reason, TRAFFIC that includes, cooking, cleaning, eating, washing, and much more. It is inevitable to find food and debris on any kitchen floor period! This makes your floor (grout) dirty fast from what your cleaning your floors with to what your wearing on your feet. Visit us today to find out what’s the best to keep your floors clean, as well as what you should be walking around in your house with on your feet. Professional tile and grout cleaning company! Can you tell the original color of the tile and the grout in this picture?
How to make your GROUT recover back to new? – Professional Tile and Grout Cleaning is the answer! In Las Vegas, NV Las Vegas Tile and Grout Cleaning has been tile cleaning and grout sealing for over 13 years as “it’s all we do“. Just about every job recovers somewhere between 85-95% every time with professional tile and grout cleaning. This service is highly specialized and requires special tools and chemicals to achieve superior results. Our average job time on 1000 square feet is 2 hours setup to breakdown. What are you waiting for? Every house or office experiences the same impossible dirty grout problems hourly, daily, weekly, etc…
If your looking to make someone really happy, call us here in Las Vegas @ 702-595-8178 or visit our website (resume) http://www.lasvegastileandgroutcleaning.com
We are at your property respectfully requesting the opportunity in earning your business.
What makes it worth to have Professional Tile and Grout Cleaning? About 1 week ago we finished a job where a new client of mine bought a new home, the home had freshly laid tile (a lot of it) as the client wished to have it sealed… Approximately 1 week later I get a call from the same client saying “I think we got taken over the coals” I said Mrs Jones what seems to be the problem? Well we just paid you $850 for 1.5 hours work…I said does it look good? Yes, But Michael you did it so fast…I said next time I’ll take a few more hours and in exchange spoil your whole day…(Did not say that!)
In reality think about what your willing to pay for which is a whole lot more $$$…Here is a small list:
Your Health and Well Being…Ever tried to clean Hard Surfaces before? Ever made more a mess than good? I meet these people daily!
Big Screen TV’s
Plumbers, Electricians, Etc.
Here’s a small list of what Professional Tile and Grout Cleaning people have to offer:
Effective and Efficient service…1000 square feet cleaned and sealed in approximately 2 Hours or less…
Floors being brought back to new 85-95% back to new that look Aesthetically new and Healthy Fresh from sickness and disease.
Approximately $100,000 worth of specialty Tile and Grout Cleaning Equipment designed to be safe in your home…Designed for tile and grout cleaning only.
Insurance and Licensing to make sure guidelines and safety is addressed for your protection.
Typical Tile and Grout Cleaning plus Sealing is above .60 a square foot for both services, this is a skilled position which requires experience both on the job and in the classroom.
Here’s a company with over 6000 residential and commercial jobs completed by ONE man and a helper…Las Vegas Tile and Grout Cleaning We respectfully request to earn your business TODAY!
Las Vegas Tile and Grout Cleaning – Got Dirty Black Feet is one of the many complaints that we hear when the first call for tile cleaning service is requested. Many reasons for “black feet” are due to the following events:
Bare Feet on multiple surfaces (tile,carpet, wood, concrete, grass, you name it!)
Shoes IE: slippers, flip-flops, heels, booties, house shoes, etc.
Cleaning chemical and tool your cleaning your floors with! Stay away from everything you see on the retail shelves.
Steam mops…They really make your floors dirtier…
Swiffer Mops…Nevermind the pad they use, how about the chemical your squirting down that builds up as layers of film…
Want cleaner feet? Keep clean cotton socks on all interior spaces on, no bare feet and shoes, and use proper cleaning method like “micro fiber padded mop” and blue dawn to clean than rinse in 10’x10′ sections…There really is no easier way.
Call 702-595-8178 or visit Las Vegas Tile and Grout Cleaning (Lucky if you live in Vegas!) for once a year professional tile and grout cleaning service or like service in your area.
How to clean Tile and Grout, especially if you tried everything! Got a phone (702)595-8178? Tile and Grout cleaning can be accomplished very fast and returning your floors back to new (85%-95%) in a matter of two hours or less…CALL your local tile and grout cleaning company, one that specializes in nothing but tile and grout cleaning…It’s usually in the name…These folks carry specialized equipment designed to effectively remove grout grime, dirt, blackness, and more from your floors. The difference is “night and day”. Watch video demo for yourself, then pray you live in Las Vegas, NV for a 12 year veteran of tile and grout cleaning. Look forward in seeing ya!