Posts tagged Vegas

I recently ran across an article (which appears below) in the Las Vegas Review Journal that discussed the drop in new construction of apartments in the Las Vegas Valley. This lack of new construction is coming in the wake of falling rents and rising vacancy rates for broad valley. At first sight, falling rents and rising vacancies may seem bad news for private investors. But consider this: There are fewer than 1,000 new apartments planned for construction in 2009 and only 148 permits were issued new home in the valley of Las Vegas in December 2008. This means that Newcomes in Las Vegas and the rush of current owners who lose their homes and seeking shelter will have to rely on existing stocks to meet their needs. So, although seizures have tripled since 2007, rising vacancy rates and rents decline as a result, these lower rents are temporary. In the coming months, the rental demand will exceed supply and rents will rise again.

It’s very good news for the savvy investor who buys investment property now at 30 cents on the dollar and the possibility of renting his unit to a level well below the current rental rate and cash flow still strong. Over time, rents increase with satisfaction, and this will eventually put the investor in an excellent position.

All Veag Las Review Journal article is reproduced below: apartment construction stalls Valley

Production is expected to fall below 1,000 units in ’09 that the decrease rents, vacancies rise

By HUBBLE SMITH LAS /> Vegas Review-Journal

Builders completed 2,670 housing units in 2008, but production is expected to fall to less than 1,000 units this year, said Michael Shaffner, associate vice president for Marcus & Millichap real estate investment services in Las Vegas.

Asking rents are expected to fall 0.2 per cent to 3 per month, while rents in effect – taking concessions – will decline by 3.2 percent to 4 months, Marcus & ; Millichap reported in its outlook for 2009 multifamily market
“What we see, on average, one month rent free lease for 13 months seems standard,” said Shaffner. “Basically, rental growth is stagnant, so it’s something that we see across the board.”

The vacancy rate increased 0.6 percentage points 8.9 percent that the stock of “shadow” rentals or single family homes for rent, begins to dissipate. Vacancy increased by 2.2 percentage points last year.

Multifamily broker Spencer Ballif of CB Richard Ellis showed vacancy to 10.96 percent in December from 9.93 percent the previous month. Vacancy was highest (11.53 percent) in Class C units, generally older and cheaper apartment complexes.

It also shows about 6,000 housing units under construction in 2009, but he is not sure what the number will in the future.

“There’s a lot under construction, because what is being built today was provided for two or three years ago because of all the hotels were to come, “Ballif said.” Certain events and others do not. “

Low monthly lease revenue decreased cap rates for investors group that once found Las Vegas to be a safe haven for their money, Marcus & Millichap regional manager John Vorsheck said. He sees more apartment properties in default and to return to lenders.

“We find that the risk of being expensive in these agreements, “he said.” People look at Vegas as a city of opportunity, they believe that prices always go up, they look at their debt and growth in rents did not rise; … Now they earn higher returns in markets they had a lot of money exchange (1031) came to Las Vegas from California. People were selling 50-unit property in Anaheim and the purchase of 100 units in Las Vegas. “

RealFacts based in San Francisco apartment rents reported an average of 8 months in Clark County for the fourth quarter, down 0.9 percent over the same period last one year. Occupancy dropped 0.3 percentage points to 92 percent for 106,400 units.

Among the states in the desert region, Nevada has the highest average rent to 5 per month compared to 4 in Utah, Arizona, 6 and 4 in New Mexico, reports RealFacts .

Vorsheck said the Las Vegas market will remain flat in the flow of this year due to lingering economic stress, but signs of recovery begin to appear.

Although several station projects of the band are at an impasse, the opening of the Palazzo and Encore added about 10,000 jobs and more workers should be hired this year to the M Resort and CityCenter.

The outlying areas in Henderson and North Las Vegas will be the highest position vacant due to competing single-family homes as rental, Vorsheck said. However, people have grown wary about renting a house that could go into foreclosure without their knowledge, “he said.

“I’m still a believer in the fundamentals of Las Vegas,” said Vorsheck. “Whether it takes 12 or 18 months, it will turn around.”

He sees the value in North Las Vegas in the coming years plans to rehabilitate old neighborhoods along Las Vegas Boulevard. Almost dollars in gentrification projects are proposed for the redevelopment area 238-acre.

RealFacts reported seven multifamily real estate transactions in 2008 worth $ 4.2 million, compared with 19 transactions worth $ 6 million in 2007.

Most investors see Las Vegas as being 12 months to 24 months away from recovery, but the real “negative” is the perception that the city is shedding many jobs, “said Sauter. In fact, total employment fell by 0 , 5 percent from a year ago.

Because of rent reductions and concessions on the rise, Las Vegas has lost two points to Marcus & Millichap’s 2009 National Apartment Index No. 16.