http://mariaagosto.cbvegas.com/blog/archive_201805/sort_entrydatetime-desc/ May 24, 2018 Dear Ms. Sharf:Re: Forbes May 14th, 2018 – Most Overvalued Housing Market Please pause to consider some important alternate facts. Firstly, the Las Vegas unemployment is way down, not up. Secondly, our housing market is healthy again having rebounded strongly from the lows in 2009-10. Contrary to Fitch’s assertion, we see the current local market fundamentals as far different from those of the recent boom-bust. Today’s positive economics are based on conventional and sustainable value factors, namely: Demand - Las Vegas’ employment, family formation and population growth from income taxed, high home value/realty tax and long commute states are continuing to drive home sales.Supply - greatly constrained, for both new and existing homes, especially for homes priced under $300,000, will establish a floor value. New Investments - the smart money has doubled down on Las Vegas with more than $8B in new investment with delivery starting in 2019 along with new permanent employment and spin-off economic boosts yet to be accounted for in home values. ? Note: the futures contracts traded on the Case-Shiller Index, Fitch’s data source, forecast that Las Vegas should see a another 11% price growth through 2022. New Normal - the Las Vegas housing market is more likely to see normalization or at least a slowing of price appreciation due to the limitations on supply and affordability, as constrained by slow income growth and rising interest rates. Below Peak - most importantly, Las Vegas is one of just a few large metro areas in the U.S. with home values below its most recent peak – Las Vegas is 26% below, as measured by the Case-Shiller Index.The reality – strong demand, constrained supply, economic impact of billions of new investment and Case-Shiller’s own view all support the fairness of current home prices and the likely probability that there is upside potential over the foreseeable horizon. While we respect various views and recognize only the future will tell who was most accurate – had a Las Vegas home buyer heeded the similar gloomy assessment in your 2017 Forbes article and not purchased a home, at the then median price of $240,300 which is now worth $266,800, they would have lost out on $26,500 in equity or an 11% gain in just a year.  Finally and furthermore – the Vegas Golden Knights are about to compete in the NHL Stanley Cup Final, in their inaugural season; against historical precedent, 500 to 1 odds and the best experts’ predictions.  Though not on our list of alternate facts, this phenomenon has got to justify at least a couple percentage points in home value appreciation! DON’T BET AGAINST VEGAS!!  Yours truly, Robert Hamrick Chairman and CEO Coldwell Banker Premier RealtyLas Vegas, Nevada  Data Contact: John McClelland Vice President,Research Coldwell Banker Premier RealtyLas Vegas, Nevada702.938.1375 Please see the referenced Forbes articles for the last three years below:2018,2017,2016 To view all Las Vegas homes for sale, visit LasVegasHomes.com http://mariaagosto.cbvegas.com/blog/21071/is-las-vegas-overvalued?-we-dare-say/ Thu, 24 May 2018 12:00:00 -0800 Currently, there is some debate as to the sustainability of home prices in Las Vegas and other areas. Strong price increases alone do not indicate overpricing. Instead, we have to look at the market as a composite of events, including rents, potential drivers of employment and importantly, supply.We took a look at some fundamental measures of values, prices relative to rents and prices relative to incomes. Prices and rents have been rising meaningfully in the last couple of years, however, prices have been outrunning rents and a large portion of this is driven by lower supply against improving demand. This has served to push the ratio back to early 2000’s levels and depicts a scenario very unlike the bubble period. So on a price-rent basis, the Las Vegas market seems appropriately priced. Incomes on the other hand, have not kept up with price increases and we appear to be above trend. This is a concern, despite a downtrend in unemployment and some rising wages. If we consider front-end ratios that lenders often use, monthly housing expenses as a percent of monthly income, we are slightly higher than the 28%-32% lenders often consider normal, when using median values. We are heading into the mid-30% range when we consider median household incomes and median home prices. But this doesn’t tell the whole story. Due to challenges in finding inventory on the lower-end of the market, some marginal buyers are simply priced out, landing once again in the rental market. We are seeing that some stronger buyers continue to buy homes less than they could theoretically qualify for, so they are essentially the opposite type of buyer.In general, our concern remains low inventory, and we cannot find compelling reasons to believe levels will amplify anytime soon. Therefore, we may continue to see challenges in the first-time buyer segment. As such, when we make comparisons between medians, they can be useful but we have to be careful to understand that buyers are moving between price ranges and potentially between single family and attached homes, so generically, making broad conclusions about the state of the market is challenging. Further, with low inventory and little respite in sight, prices can become out-of-line with incomes for an extended period. For long-term buyers and investors, it often doesn’t matter a lot unless measured against some alternative sector with high returns, a challenge in today’s investment environment. They would either be relinquishing equity to rents or foregoing positive yields in a reasonably strong rental market.When prices are moving out of line with incomes, we can't look at one region as if it were in a vacuum. Instead, we have to look at relative values or relative affordability. Despite prices rising faster than incomes, Las Vegas remains much more affordable than most other western markets. The exhibit below illustrates estimates of how many hours one has to work to pay a mortgage. Las Vegas real estate remains far more attainable than the neighboring California market.To all of the homes in the Las Vegas Valley for sale visit www.lasvegashomes.comFor some academic background on price-rent ratios, see Krainer (2004).References:https://www.frbsf.org/economic-research/publications/economic-letter/2004/october/house-prices-and-fundamental-value/          http://mariaagosto.cbvegas.com/blog/21069/home-prices-across-the-country-continue-to-increase/ Fri, 18 May 2018 12:00:00 -0800