Scott writes:
The Grass is Always Greener….
Not if you’re looking to buy or invest in Las Vegas right now! The grass is definitely greener on your side of the fence. If you’re trying to sell your property right now, trust me, you’re feeling the pain – at the very least you are frustrated. While this manifests as doom and gloom in the press, it can be the opportunity of a lifetime if you can filter out the noise.
What is the noise? It is record numbers of foreclosures, short sales, limited financing availability, bank owned properties and a number of other things that are alarming to the market in general. These are the things that the media is focusing on. You don’t hear much about the buyers of properties that are 10, 20, even 30% below what was paid for them less than two years ago!
How can a house drop in value that fast and not be afraid of it? First off, there is a very mechanical process that happens during the foreclosure process now – elimination of the second mortgage. With all of the 100% financing that was going on, the bulk of those transactions had a 20% second mortgage in place to eliminate PMI. When the foreclosure becomes final and the property becomes bank owned (REO), the second mortgage is effectively eliminated – overnight drop in value of 20%! This is causing a real problem for those who are looking to sell their properties in a traditional manner. It is this problem that is being focused on in the media, doom and gloom.
Why shouldn’t I be afraid of this type of property? Simply because others’ pain is your gain. Look back at some of my past market reports (if you can’t find them, contact me and I’ll get them to you) and you’ll have my clear opinion on what the Vegas economy is setting itself up to do. When the local market strengthens it is those that had the foresight to buy when everything was on sale (right now!) that will be left holding the bag of money.
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