8/2/2019 Investor IQ One-page Report - 1

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61

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3640

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DaysonMarket

C ond om ini um Si ngl e Fam il y

54.9%

57.8%

54.8%

59.5%

64.3%

55.1%

56.4%

56.9%

60.8%

62.5%

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2011 Percentage of Inbound Shipments

2010 Percentage of Inbound Shipments

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-5%

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$ 0 $ 50 ,0 00 $ 10 0,0 00 $ 15 0,0 00 $ 20 0,0 00 $ 25 0,0 00 $ 30 0,0 00 $3 50 ,0 00 $ 40 0,0 00 $ 45 0,0 00 $ 50 0,0 00 $ 55 0,0 00 $ 60 0,0 00

CapRate

Sale Price

CAP RATESALES PRICE RELATIONSHIPSINGLE FAMILY Q4 2011

Case-Shiller Home Price IndexLas Vegas, NV

0.0

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CapRate

Capitalization Rates, Sale & Rent Prices (Indexed)

Cap Rate Rent Index Sale Index

CAPITALIZATION RATES, RENTS AND SALE PRICES (indexed)

Rental Days on Market

United Van Lines & Atlas Inbound/Outbound Moves 2011 Property Example

LAS VEGAS RESIDENTIAL INVESTOR IQJanuary 2012

It is well known that home prices in Las Vegas have fallen substantially. After an unprece-

dented bubble in the early and mid-2000s, the subsequent crash has pushed prices below

its long-run, pre-bubble trend. Based on the prior trend and metrics such as price/rent and

price/income ratios, we believe that Las Vegas is in a severe undervalued condition.

Capitalization rates, or cash-on-cash returns (in the absence of leverage), have grown

significantly in the post-bubble environment. This is largely a function of asset price

declines rather than rent increases. Rents experienced a mild decline before stabilizing

2010 and 2011. In some areas we are actually measuring rent increases. As a result,

returns are exceeding many other asset classes with possible returns above 7%.

Capitalization rates tend to be maximized at the lower end of the home pr ice spectrum. The

home prices are a function of age, location and other variables, however rents tend to not

reflect these at the same level the asset value does. So, while much of the depreciat ion of

the home is built into the asset value, rents remain fairly stable. Further, some of the lower

priced homes do not have association or special improvement fees which cut into operation

income. The graph above illustrates the typical tradeoff between sa le prices and returns.

Buyers of rental property should have an idea of their probable lease-up period. The ch

above illustrates days on market for condominiums and single family homes. Single fa

marketing times have been on a gradual downtrend s ince 2009, with condominium ma

ing times declining from mid-2010. In Q4, 2011, single family homes leased-up within

average slightly more than 1 month, while condominiums took nearly 50 days. When

developing a pro-forma for a property, one should take these values into consideration

Employment and household formation are the two requirements for absorbing housing

supply. Employment in the Las Vegas Valley was greatly impacted by the recession. In the

past several quarters, we have been measuring a gradual firming in the labor market, a

strong positive for housing. Additionally, United Van Lines and Atlas Moving provide

surveys of household moves throughout the country. In 2011, Nevada was considered

balanced (with slightly more inbound migration in the UVL survey). Recent third fourth

data on new residents and electric meters suggests a likely return to inbound migration.

50% of Saleto Investor

Find out why thecoming to Las V

how you canadvantage

phenomenal invopportunit

Approx. 1,800 transactimonth during 2010-201are cash)

Source: Atlas Source: United Van Lines.

Indicator Q4 , 2011

Change

Year Ago

New Residents (Drivers License Count) 13,882 11.4%

Active Residential Electric Meter Count 741,220 1.5%

Actual Sale Sample 11949 Fairfax Ridge St

Previous Sale Date Sep-05

Previous Sale Price $284,204

Recent Sale Date Dec-11

Recent Sale Price $96,000

Decrease in Price -66%

Current Rent (Mo)* $1,150

Current Capitalization Rate 9.5%

*Existing rent per MLS. Tenant occ upied at time of Sale.

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

Banker Premier Realty makes no representation as to the accuracy or completeness of such information.