2011 Annual Real Estate Report

8/3/2019 2011 Annual Real Estate Report

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2011 Hihlihin heReidenil Rel Ee Mrke r 2011

Las VEgas REaL EstatE REpoRt


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While 2011 i nw in ur rer view mirrr, we believe i my hve mrked urnin in in everl key re,

includin huin, he lcl ecnmy nd leilin. L Ve i driven chiey by urim nd viir vlume, key ue lcl ecnmic helh, which h nw recrded weny rih mnh yer-ver-yer incree

thi i llwed by mulile mnh recrded in in min revenue, hel ccuncie nd revenue er rm

severl emlymen ecr hve l recrded reeed in, welcme chne rm he -crh lwdwn

h hi he Vlley hrd.

In 2011, Cldwell Bnker premier Rely (CBpR) lunched i Neihbrhd awrene Cmin (NaC),

erie inrminl rundble dicuin cheduled in mulile re hruhu he Vlley. Wih nerly 75%

hmewner wih mre everely underwer, he ure he NaC i educe nd inrm hmewner

bu he curren rel ee mrke nd heir mny in. tic include hr le (where he vlue he

hme i le hn he mun wed) nd he nd lel cnequence reled direed huin in L Vethe NaC include n eenive quein nd nwer ein where hmewner cn chieve reer underndin

he in vilble. the NaC i inin mmenum nd in 2012 CBpR will be wrkin wih hmewner

ciin, emlyer, municiliie nd her rnizin i hmewner nvie he chllene mny

hem ce dily. Wih he eirin he Mre Deb nd Relie ac lmin n 12/31/12, he ene

urency i hih ke dvne he vin hi c rvide.

2011 l w he in new Nevd leilin (aembly Bill 284), which require lender rduce very

ecifc dcumenin hwin h hey hve rih recle n hme. I i erly r he ull imc

hi leilin ye we hve lredy een dric decline in Nice Deul, n erly e in he reclure

rce. the cnequence hi lw re likely be berved ler in 2012 nd in 2013.

our eecin r 2012 re brih. We hve rwn very cuiu ver he everl yer rerdin he

rbune ny iive ecnmic new bu we cn y wih cnvicin h we believe L Ve huin nw

mrk enerinl runiy. 2011 w mniein hi me ide, wih bh wner ccuied buyer

nd inver drivin ne he m vibrn rele mrke n recrd nd r ur ulin, ne he m

dynmic mrke in he cunry. Emiricl nd necdl evidence ue h he recniin undervlued

L Ve huin will cninue drive demnd in 2012 nd beynd.

Las VEgas VaLLEY LooKINg BaCK at 2011.

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the eiin hme mrke eerienced ne i be yer ever. When ked wheher r n L Ve huin

h bmed, i relly w-ld nwer. Fr le vlume, we cn cncluively y h ye, huin

bmed in le 2007 we hve clerly ne rm mive veruly irly rericed invenry le

hn hree mnh invenry recen le re (6 mnh invenry i en cnidered nrml).

a bm in ricin h ye ully mnie, hwever, iven h rice re dilyin mre mild dwnwrd

bi, buyer hve hwn le cncern wih ner-

erm decline nd re endin cu n ln-run

reciin nd he ch w rm renl reurn.

Fr buyer inendin ccuy hme rimry

reidence, heir rimry cncern i he rde

beween wnin nd renin nd hw ln hey

ln live in he re. Fr mny re wn, i

i cheer buy hn ren n equivlen hme.

thi i he drivin rce behind mny urche bymilie inendin eblih r in L Ve.

SINGLE FAMILY DAYS ON MARKET CONDO-TOWNHOME DAYS ON MARKET

2011 2010 2011 2010

HOME RESALES (LESS THAN $1M) 2002 THROUGH 2011

2010 2011

ExIstINg HoME saLEs

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the reinl Cldwell Bnker premier Rely re eer wihin he rel ee indury nd cnnly

educe hemelve rvide heir clien wih he m ccure inrmin mke well- inrmed deciin

the rel ee mrke i very uid nd dynmic nd yin curren n rend, leilive chne nd

ecnmic cr i necery in rvidin ur clien wih he ervice hey deerve, crein lyly nd ru.

a rciiner heir chen rein, CBpR en hve lid rck recrd ricin nd mrkein

hme. Hme ld by en CBpR cled r n vere 102% heir lied rice in 2011. o heehme, 67% ld r bve heir lied rice wih 49% ellin bve. CBpR h n rry rery

ecili r cnumer lkin ell r urche iece L Ve includin bnk wned (REo), hr

le, luury, hih-rie, inver nd cmmercil.

Unlike eiin hme le, which rckeed uwrd in 2011, new hme le cninue be in rlned

lum. thi i n uneeced, ince he eiin invenry er me eremely cmeiive hme nd heVlley verll huin ck i relively yun. Currenly, new hme buildin rereen niche mrke, bu

ne h we believe i very rrie.

Builder re n cmein urely n rice er-qure bi becue hey re erin mre hn ju

hue; hey re erin n runiy wn mdern hme. New hme include ll he ec mdern

livin includin he le in rchiecurl dein wih r ln h er cnneciviy wih he enry, kichen

nd rimry livin re. M hme builder er enery efcien hme h rely reduce erin c

nd imrve he livin envirnmen. Fr mny milie, hey imly wn new hme h f heir lieyle nd

here re everl re erin in vriey ubdiviin hruhu he Vlley. We hve recenly berved

rducin hme ricedrm $60 er qure-

u $200 er qure-

r mre luury

inle mily erin.

I he rele invenry

cninue decline

we eerienced in le

2011, new hme my be

ne he beer inin 2012. New hme

rncin re yiclly

hle-ree, vin buyer

ime nd rvidin

defniive ime line

ln heir mve.

NUMBER

OFCLOSINGS/PERMITS

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

NEW HOME CLOSINGS, PERMITS & EXISTING HOME SALES

JAN-04

APR-04

JUL-04

OCT-04

JAN-05

APR-05

JUL-05

OCT-05

JAN-06

APR-06

JUL-06

OCT-06

JAN-07

APR-07

JUL-07

OCT-07

JAN-08

APR-08

JUL-08

OCT-08

JAN-09

APR-09

JUL-09

OCT-09

JAN-10

APR-10

JUL-10

OCT-10

JAN-11

APR-11

JUL-11

OCT-11

NEW HOME CLOSINGS NEW HOME PERMITS EXISTING HOME SALES

LasVEgasHoMEs.CoM

sELLINg YoUR HoME

NEW HoME saLEs


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sle rice hve lrely ened in 2011, wih mild dwnwrd bi. a he ree rice level, we

cninue eerience yer-ver-yer decline. Hwever, rel ee i lcl nd he level rice decline i

n unirm cr he vlley wih ew ubdiviin eeriencin mild rice incree (me due quliy

dierence nd her inuencer) rm l yer.

L Ve i well knwn bein ne he ciie h eerienced rel ee bubble. a dy vlue, ne

culd ume we hve eerienced n ni-bubble, wih rice llin r belw ln-run rend nd undmenl

vlue, berved by rice--ren nd rice--incme ri. We hve been meurin hi undervlued

cndiin r everl yer, bu nw i i becmin minrem nd buyer re recin. addiinlly, reerch

dermen uch gldmn sch eime h curren rice in L Ve devie rm equilibrium rice

by 50%, menin h he L Ve mrke i he m undervlued. 1 oher frm hve imilr emen

includin IHs glbl Inih nd Lcl Mrke Mnir.2 thi i n n yicl eure -bubble mrke

nd i culd ke me ime reurn rend r equilibrium vlue, hwever m reurce indice h

i n incredibly runiic ime buy.

Mny buyer re cmmeninh curren rice rereen

enerinl runiy

nd ibly ne he

be ime inve in rel

ee h ur cunry h

ever wineed. sme Vlley

hme cn be urched

1990 er ricin nd ne

cn quickly ee he level

rdbiliy inheren in

dy mrke. In c, L

Ve nw rnk he be

lce buy v. ren bed

n udy by truli.cm3.

Fr emle, cmmn

hme in dy mrke

bein, 1,800 qure ee

riced $130,000, wuld

hve mre ymen rimely $660 (rincil nd inere). When includin inurnce, end hmewner ciin ee, he l mnhly uly huld ill be le hn $900, imilr lrer

rmen lee re. thi me inle mily hme wuld likely ren r bu $1,300. I i cryl cler

h i ne ln mke L Ve heir hme, wnin i very licl riin.

INDEXVA

LUE(YEAR

2000=100)

300

250

200

150

100

50

0

STANDARD & POORS / CASE-SHILLER HOME PRICE INDICES

LAS VEGAS

JAN-93

JUN-93

NOV-93

APR-94

SEP-94

FEB-95

JUL-95

DEC-95

MAY-96

OCT-96

MAR-97

AUG-97

JAN-98

JUN-98

NOV-98

APR-99

SEP-99

FEB-00

JUL-00

DEC-00

MAY-01

OCT-01

MAR-02

AUG-02

JAN-03

JUN-03

NOV-03

APR-04

SEP-04

FEB-05

JUL-05

DEC-05

MAY-06

OCT-06

MAR-07

AUG-07

JAN-08

JUN-08

NOV-08

APR-09

SEP-09

FEB-10

JUL-10

DEC-10

MAY-11

LOW TIER (UNDER $108683) MIDDLE TIER ($108683$167868) HIGH TIER (OVER $167868

1 US Economics Analyst Issue No:11/48 December 2, 2011. Goldman Sachs Global ECS Research.2 http://money.cnn.com/2011/01/10/real_estate/overvalued_housing_markets/index.htm

3 http://info.trulia.com/index.php?s=43&item=123

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saLEs pRICEs


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Freclure cninue be lre cmnen L Ve Vlley hme le. Freclure, r Rel Ee

owned (REo) hey re nw cmmnly clled, mde u nerly 50% 2011 clin i did in 2010.

REo re uh er by bh inver nd wner-ccuyin buyer nd mny cninue receive mulile

er. REo l end be riced liquide quickly nd n vere, hve mrkein ime le hn hr

le r equiy eller.

the wve invenry h mny eeced ver he everl yer h n cme. Ined, bnk wned

invenrie hve been n he decline, drin by nerly 57% rm December 2010 December 2011. Bnkwned invenry lied r le (nd n under cnrc) w nly bu 2,000 hme he end December

2011. thi rereen ubnil decline nd by cnr, in le 2008 nd 2009, here were nerly 9,000.

the remenined lw h we dicued, aB 284 i likely ecerbe he invenry rblem we

re cunin r ewer nice deul (n erly e in he reclure rce). Ulimely, hi culd

led invenry hre in rwrd. a curren brin re REo hme, nly bu ne

mnh uly ei.

FoRECLosUREs



We hve lked everl iece evidence h ue h renl huin deerve n incluin in bh

ernl nd iniuinl rli. over he everl yer, hme vlue hve llen ubnilly. pr

hi decline i nurl cnequence bubble, which uhed rice r bve undmenl vlue (r innce,

renl reurn culd n cver deb ervice). the decline er be rm n verll dwndr in diiin

emlymen, reul mlinvemen rm he bm yer nd rm deleverin. anher cmnen er

be bed n enimen nd cce fnncin. Currenly, we believe h hme in L Ve re undervluedbed n rice/ren ri (currenly bu 7 ime r nnul ren) nd he level reurn we re eein rm

renl rel ee. Lner-erm, we eec me cilizin re (ne erin incme divided by urche

rice) cmrein wih m cmin rm he e vlue ide, hruh rice incree, rher hn wekenin

ren. Recen ren meuremen hve demnred renhenin renl mrke.

Fr everl yer, wih he ecein me ier, inver hunned reidenil invemen. In he

w yer, we hve niced reverl hi enimen wih ch rncin cninuin be he lre

inle mehd binin rerie. We hve ied mulile inver, bh rein nd dmeic, in heir

que bin ch-rducin rerie. I i ur belie h her inver huld cnider wnin renl

rerie due he re cilizin re we re bervin. thi my be eecilly rcive me ivenhe cmbinin lw yield nd hih vliliie bein eerienced in her invemen.

there i n uch hin he be invemen, ju bke invemen h wrk r every individul. Ech

invemen h i wn rewrd nd chllene. In equiie, dy--dy vliliy cn be u wrenchin. on he

iive ide, here i en l liquidiy nd i i ey nd relively ineenive buy nd ell. Rel ee

reen dieren e iue, ne bein he lck liquidiy. I ricin hme cler he vere le

he mrke, ne cn eec he hme be mrkeed r everl mnh bere ellin, clin ecrw nd

bein ble wlk wy wih und. Neverhele, i he lck liquidiy i n cncern, rel ee cn led

iive ch-w nd lid reurn. In ddiin, i yu hre ur view h hme re undervlued, lner-erm

reciin mih be renble cnjecure.

We errmed everl wh-i

cenri r uure renl reurn nd

hme vlue. one he imulin i

hwn belw. thi imulin cnider

n $86,000 hme h recenly ld.

the imulin ume cninued

decline in he mrke rice he hme

hruh 2013 wih erid rm

mid-2013 mid-2014. thi i llwedwih mdere, hen mre reive

reciin re. Finlly, wrd

he end he imulin (10-yer)

he rice incree lw dwn we

mve bck wrd ur ln-run, re-

bubble rend. thi riculr rery

currenly ren r $995 nd rduce

INVEstoRs

ASSETVALUEA

ND

COMULATIVENETINCOME

$110,000

$100,000

$90,000

$80,000

$70,000

$60,000

$50,000

$40,000

$30,000

$20,000

$10,000

$0

-$10,000

HOME PRICE & RENTAL RETURN SIMULATION

NOV-11

MAR-12

JUL-12

NOV-12

MAR-13

JUL-13

NOV-13

MAR-14

JUL-14

NOV-14

MAR-15

JUL-15

NOV-15

MAR-16

JUL-16

NOV-16

MAR-17

JUL-17

NOV-17

MAR-18

JUL-18

NOV-18

MAR-19

JUL-19

NOV-19

MAR-20

JUL-20

NOV-20

MAR-21

JUL-21

NOV-21

Source: Clark County, Coldwell Banker Premier Realty. Note: Single Family Data.

TOTAL GAIN LOSS / GAIN IN ASSET VALUE CUMULATIVE NET INCOME



7.2% cilizin re (ch-n-ch in n unlevered cenri). In hi imulin, wih he ecein

vcncy durin he iniil lee-u erid, he rery i ch-w iive. the rchein eec in he

cumulive incme curve i due vcncie nd bic reurbihin. Ren re ecled by 1% 2% er yer

wih he ecein he fr w yer, which re held . one cn ee h deie emrry decline in

he e vlue, he invemen i ill ne iive hruh mjriy he hld erid. a he end en yer,

wih l ureen mnh vcncie nd bic minennce, he rery ill mned rduce$54,850. the rery recied by $33,222 r l reurn 102% r 10.2% er yer. thi w ne

ur mdere cenri.

given hi cenri, ln wih reurn he cnce buy lw, ell hih, we believe h renl huin,

includin he inle mily ecr, reen nice runiy r everl ye inver. there re me

imrn hin cnider bere yu bein yur erch r rerie. I yu d n ln mne he

rerie yurel, i i imrn hire lid rery mnemen frm. Furher, be rered r he lck

liquidiy wih he invemen nd llce ccrdinly. Finlly, i i imrn hve rel ee en h

undernd he ubmrke nd

h cce everl e urce inddiin mulile liin ervice.

Fr iniuinl inver, he biliy

cquire enuh rerie my be

chllene. While me inver

eec bulk dicun, he reliy i

bulk cke my require mewh

remium, imilr he kever

remium cquirin frm en y.

Furher, mny he lredy embledcke hve l he iniil

wrk cmleed. thi my include lien

y nd rehb, ln wih fndin

qulifed enn.

INVEstoRs (CoNtINUED)

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

$1.00

$0.90

$0.80

$0.70

$0.60

$0.50

$0.40

$0.30

$0.20

$0.10

$0.00

SINGLE FAMILY SALES PRICE PER-SQUARE-FOOT &RENTAL PER-SQUARE FOOT

10/1/2001

2/1/2002

6/1/2002

10/1/2002

2/1/2003

6/1/2003

10/1/2003

2/1/2004

6/1/2004

10/1/2004

2/1/2005

6/1/2005

10/1/2005

2/1/2006

6/1/2006

10/1/2006

2/1/2007

6/1/2007

10/1/2007

2/1/2008

6/1/2008

10/1/2008

2/1/2009

6/1/2009

10/1/2009

2/1/2010

6/1/2010

10/1/2010

2/1/2011

6/1/2011

10/1/2011

SALE PRICE / SQ. FT. RENT / SQ. FT.

Stabilizing Rents

Source: Clark County, Coldwell Banker Premier Realty. Note: Single Family Data. Non-inflation adjusted.



Luury hme re beinnin ee rebund in civiy er ereme lw in 2009 nd 2010.

In ddiin, we hve ned mulile, eremely lre cum hme bein buil in Red Rck Cunry

Club, the Ride nd turnmen Hill. thi revel h even durin hrder ecnmic ime,

me individul nd milie cninue demnd luury.

the luury hme h ld in 2011 were cinin emle crmnhi nd enin deil

nd everl were ble minin le rice in ece $500 er qure-. thee le k lce

in ubdiviin like the Ride, peccle Rnch, suhern Hihlnd nd in everl her cum hme

re. Mny hee hme include l cure rne, hme heer, l nd , ci nd

her hih-end eure.

Luury cndminium le hve been n mild rebund rm i bm in 2009. We hve l

eerienced n end he ee decline in rice, wih everl rjec hwin increed rice biliy

rmin nerly l rend. thee bilizin rjec include allure, pnrm, Bc Rn nd me

he turnberry buildin. Mny hee rjec re d urce renl, which i l helin

brb vcn uni.

the ne hin h i cerin i h mny hme re rdin r belw relcemen c, wih me

ellin r he me iure berved in inle

mily ju ew yer . Hwever, we

hve een in he inle mily mrke, here

i n elemen h cninue rde bve

$400 er qure- in rjec uch prk

twer, one Queenride plce, CiyCener

nd in he cnd-hel buildin uch MgM

sinure nd trum. CiyCener Mndrin

orienl cninue hve le bve $1,000

er qure-.

LUxURY HoME saLEs

LUXURY SINGLE FAMILY HOME RE-SALES

2002 THROUGH 2011

LUXURY CONDOMINIUM RE-SALES

2002 THROUGH 2011

2010

2010

2011

2011



I w 32 yer when I bined my rel ee licene (bere receivin my hih chl dilm).

In he yer here hve been unbelievble hih nd lw in ur mrke. Wih ll he u nd dwn,

I m bervin he m cive nd runiic rel ee mrke in ll my 32 yer RIgHt NoW!

the curren redicin nd mrke indicr re ll inin u. McCrrn rfc i Up. gmin revenue re

Up. Hel occuncy i Up. pulin i Up. Even emlymen i (mdely) Up. thee mrke indicr led

mny redicin h we re very cle eein he bm in rery vlue, i we re n here lredy

Inerninlly reeced reurce rm Frbe Kiliner CNN-Mney nd her re enerlly hih n

rel ee nd spECIFICaLLY in L Ve he BEst lce buy, reerencin hi nce in

enerin buyin runiy.

While ur Vlley remin lued wih underwer hmewner, he runiie hed hee fnnci

burden re rely increin bnk re nw becmin urive hmewner in he hr le rce

ined hem uruin le deirble in. Wih he recen in aB-284, bnk re fndin hemelve

quie chllened iniie reclure, hu hr le hve becme tHEIR pREFERRED soLUtIoN

en yin hmewner cere nd eliminin cly defciency judmen. Bu ime i runnin

u. the Us Cnre Deb Recvery ac 2007 eire hi yer! the imlicin culd hve

hmewner yin e n ny riven deb nd my c $50,000 under yicl circumnce.

Cldwell Bnker premier Rely reinlly rined cie ecilize in helin hmewner wh

we mre n heir hme hn i wrh nd re n ure wh d. they l end inifcn mun

heir ime iin buyer wh re in he rune iin ke dvne he remendu buyin

runiie h ur mrke i reenin.

I he yu hve enjyed he welh d wihin hi cmrehenive rer nd encure yu cnc

yur sle Eecuive r ddiinl inrmin.

HaVE a gREat 2012!

Las VEgas REaL EstatEtHE Most oppoRtUNIstIC MaRKEt I HaVE EVER sEEN!

Bb Hmrick Chirmn & CEo

BobHamrick


12/12

LasVEgasHoMEs.CoM

The inormation and opinions in this report are believed to be reliable and has been obtained rom sources believed to be reliable.

Coldwell Banker Premier Realty makes no representation as to the accuracy or completeness o such inormation. The opinions expressed

in the report constitute the judgment o the authors only and may not refect the opinion o Coldwell Banker Premier Realty.

This report is provided or inormational purposes only and does not constitute investment advice.

This report may not be circulated or copied without our prior written consent. 2012 Coldwell Banker Premier Realty.

2011 Annual Real Estate Report

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Transcript of 2011 Annual Real Estate Report