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Las Vegas Housing: 8% Of Single Family Homes Vacant, Yet New Construction Permits Up 50%

Tyler Durden's picture




 

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

If there is any market that demonstrates the complete and total misallocation of capital that results from Banana Ben Bernanke’s money printing and artificially low interest rate policy, it the latest phony American housing bubble. With a record numbers of citizens on the food stamp electronic breadline, with unemployment stubbornly high no matter what data you use, billionaire financial oligarchs are running around bidding up “homes for rent” and pricing out the random average person that actually has the capacity or desire to bid. I just read an excellent article that demonstrates the degree of insanity that has now been unleashed upon the streets of Las Vegas.

As the title of the post mentions, a study from the University of Nevada at Las Vegas show some 40,000 homes are vacant, or 8% of the metropolitan area’s single-family housing stock.  So it would seem that this would provide plenty of good deals for investors right?  Certainly there doesn’t seem to be a need for new home construction.  Well think again!  In their QE-forever induced delirium, homebuilders have gone Chinese and in Las Vegas “permits for new home construction are up 50 percent, twice the national average.”

My favorite line in the entire article comes at the end when a prospective buyer explains what happens when an actual citizen attempts to purchase a home to actually live in:

“We know there is a minute chance we get anything,” she says. “The most frustrating part of all this is how home prices keep going up and up, yet you have so many empty homes.”

Oh and it seems Oaktree has followed Och Ziff’s lead and pulled back from the “buy to rent” insanity.  Soon all that will be left are the dumb money and homebuilders, who should start thinking about what kind of bailout they will lobby for when this entire thing unravels.  From Reuters:

These big investors and a handful of others have bought at least 55,000 single-family homes across the U.S. in the past year. In the Vegas area alone, they have accounted for at least 10 percent of the homes sold since January 2012, according to a Reuters analysis of housing transactions.

 

That added firepower helps explain why home prices in this metropolitan area of 2 million people are up 30 percent over a year ago, far more than the national average of 10 percent. Permits for new home construction are up 50 percent, twice the national average.

 

Las Vegas would seem a highly unlikely locale for a new housing bubble. There are at least 20,000 homes in some stage of foreclosure, and the jobless rate hovers near 10 percent, some two points above the U.S. average. A healthy housing market depends on people having good-paying jobs so they can accumulate down payments and finance their mortgages.

Healthy markets?  That’s so last century!

Cracks are showing in Vegas and beyond. Here, rents on single-family homes were down an average of 1.9 percent in March from a year ago. In other regions targeted by institutional buyers, such as Phoenix, Southern California, Atlanta and Florida, rents are either falling or flat, according to online real estate service Trulia.

 

Industry insiders estimate that roughly half of the more than 55,000 homes acquired by institutions over the past year in the U.S. have yet to be rented.

In Oceania, that is a market signal for build more homes.

The combination of rising acquisition costs, prolonged rental lead times and declining rental income is disrupting the spread-sheet analysis behind Wall Street’s bet. That could pose problems for what once seemed like a slam dunk. It could also give pause to stock-market investors as some players list their shares. American Homes 4 Rent, based in Malibu, Calif., has said it expects to file soon for an initial public offering.

Taking bets as to how soon after its IPO America Homes 4 Rent will go BK.

Early last year, Oaktree Capital Management agreed to provide up to $450 million in equity to real estate investment firm Carrington Capital Management for its foreclosed-home acquisition program. Carrington was projecting an internal rate of return of 25 percent over a three-year period for its portfolio of single-family homes in several cities, according to a marketing document.

 

Oaktree is now reluctant to commit more money to the trade after souring on the buy-to-rent strategy, said people familiar with the firms. Oaktree saw returns on rents compress and no longer is comfortable with Carrington’s initial heady yield projections, they said.

 

The Vegas market has unsteady legs. Statistics compiled by the University of Nevada at Las Vegas show some 40,000 homes are largely vacant – 8 percent of the metropolitan area’s single-family housing stock. Housing research firm RealtyTrac estimates there are 20,000 single-family homes in the metro area either owned by a bank or in some stage of foreclosure.

 

“We know there is a minute chance we get anything,” she says. “The most frustrating part of all this is how home prices keep going up and up, yet you have so many empty homes.”

Thanks Ben.

Full article here.

 

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Sat, 05/04/2013 - 19:29 | 3530668 Jay Gould Esq.
Jay Gould Esq.'s picture

But, Larry Yun says we are in recovery ?

Sat, 05/04/2013 - 23:19 | 3531100 Dingleberry
Dingleberry's picture

Went looking at houses. Market is bifurcated. If it is decent and in a good hood, it will sell for probably 10% more than at beginning of the year.  

If it is in a decling hood, forget about getting asking price if anything at all.

 

3% interest rates can jack up some home prices. How long can it last this time around?

Sun, 05/05/2013 - 03:17 | 3531505 Boris Alatovkrap
Boris Alatovkrap's picture

Is damn right! Market is bifurcating - bifurcating beyond all recognition as old marine is to say.

Sun, 05/05/2013 - 10:54 | 3531955 redpill
redpill's picture

Builders are pulling permits because typical home buyers can't get a resale before it gets snapped up in cash by an investor fund so they have to buy new. Still, new homes are a small fraction of the entire market so the numbers aren't massive, and investors stay away from new homes bcause they don't want to deal with putting in a yard, window coverings, etc., or pay the premium and HOAs that come with a new neighborhood. The scary thing is when the investor portion of the resale market evaporates, the people that bought new homes won't be spared.

Sun, 05/05/2013 - 12:46 | 3532141 markmotive
markmotive's picture

Also, Las Vegas home prices up 22% over the past year. Try to make sense of that!?!

http://www.planbeconomics.com/2013/05/which-us-cities-saw-housing-prices...

Sun, 05/05/2013 - 16:55 | 3532696 jbvtme
jbvtme's picture

why is this any different than the chinese ghost cities?

Sun, 05/05/2013 - 15:42 | 3532569 Sokhmate
Sokhmate's picture

I familar with say. Is call BUBAR.

Sun, 05/05/2013 - 18:27 | 3532816 Son of Loki
Son of Loki's picture

There is a flood of houses hitting the market now mostly bought 2009-2010 .... listing prices way too high but final sales (when you dig it up) about 30% lower then list price.

 

My son's realtor advised him make an offer 40% lower then list and think about buying for 30% off list price. This is for Central Texas where he plans to live for 5-10 years then move on since he says it's too hot to live there forever (110 degrees in summer).

Sat, 05/04/2013 - 19:31 | 3530671 jepicza
jepicza's picture

"Knock it off with them negative waves. Why don't you dig how beautiful it is out here? Why don't you say ..."

Sat, 05/04/2013 - 19:31 | 3530672 Big Corked Boots
Big Corked Boots's picture

The pickup trucks used to have bumper stickers in my neighborhood: "New Construction Feeds My Family."

Build MOAR, bitchez. What's good for Krugman is good for Amerika.

 

Sat, 05/04/2013 - 19:36 | 3530681 Pure Evil
Pure Evil's picture

We should really start thinking about building a new Hyper-Mall somewhere in the middle of Death Valley to rival the largest mall in the world currently located in China.

Ghost cities are the coolest.

Sat, 05/04/2013 - 20:48 | 3530783 RebelDevil
RebelDevil's picture

Hey, at least ghost cities are a great hedge against overpopulation.

Sun, 05/05/2013 - 03:19 | 3531510 Boris Alatovkrap
Boris Alatovkrap's picture

So single-family is 8% vacant, but Las Vegas is home for quick wedding chapel. Problem fixed, no!?

Sat, 05/04/2013 - 21:53 | 3530931 cynicalskeptic
cynicalskeptic's picture

Vegas is gonna be a ghost city soon.  Running out of water, Hoover won;t produce electricity to run the AC when the water level gets too low.  The big spenders are foreign and NOT going to Vegas anymore and teh US proles are sorely lacking in disposable income.   Brillliand concept - an economy based on people LOSING money in a place they have to FLY or DRIVE to in the middle of a deserrt.

Have family there - one is a nurse and wants to go back to NY because the schools are so godawful - exhusband is a Vegas cop - BIG gang problem (shhhhh, don't scare the tourists) the trunk of his patrol car has a streetsweeper and more firepower than many small town departments......

As for the building boom - TONS of places in foreclosure but Nobody wants to buy THOSE.  People who own a place that's underwater are buying another house - exactly the same as what they have but for $100,000 less then walking away from the first one.  But they only want 'new' - no foreclosure for them..... totally screwed up system.  Banks write loans to build in a market with ridiculous vacancy rates and are giving mortgages to people who are walking away from their current house.

Sun, 05/05/2013 - 10:01 | 3531856 Agstacker
Agstacker's picture

Makes me want to play Fallout, new Vegas...

Sat, 05/04/2013 - 19:31 | 3530673 Seasmoke
Seasmoke's picture

buy-to-rent barely got out of the starting gate........how do these new houses even get started ?????

Sat, 05/04/2013 - 21:47 | 3530920 otto skorzeny
otto skorzeny's picture

the govt is making the banks keep the BKs off the market so that property values don't plunge and real estate tax revenue doesn't dry up so your local jackbooted donut-eater doesn't lose his job so he can waste your ass when the SHTF-comprende?

Sat, 05/04/2013 - 19:36 | 3530682 dolph9
dolph9's picture

Americans won't be satisfied until they turn the entire country into an unlivable wasteland of sprawl and concrete.

How can people be so dumb is my question.  Do Americans have a burning desire to live in ugliness?  Is it something we grow up with, and then decide it's normal and we want more of it?

Sat, 05/04/2013 - 19:46 | 3530697 nmewn
nmewn's picture

lol...

"Americans won't be satisfied until they turn the entire country into an unlivable wasteland of sprawl and concrete."

Shovel ready jobs baby ;-)

We now need to turn our attention to installation of new asphalt bike paths, parking lots and ADA ramps & sidewalks through our National Parks! Its for the less fortunate and...of course...the children!!!

Forward!

Sat, 05/04/2013 - 22:04 | 3530954 cynicalskeptic
cynicalskeptic's picture

National Parks are really sad.  99% of those visiting never go more than 100 yards from a road or paved path.   AND they're idiots.  Yeah. go feed the bear, go climb on the wet rocks at the top of the waterfalls......  got to love the clueless tourists in Death Valley - on high clearance 4WD roads in some subcompact without water, maps or any idea of what they're doing....   they recently found the skeletosn of a German family missing for 5 years - shredded the tires ion their minivan backcountry and tried to walk out.        Got to love the 'back to nature crowd' that thinks taking that hike up a mountain is a REAL good idea in flip flops, without any water food or change of clothes, playing games on their phone instead of watching the trail......  Most of the kids are whiney brats who want to be at Disney World instead.

Headed up Logan Pass in Glacier when it was 65 and clear, when we came back it was in the high 30's and hailing. No big deal, had more clothes adn rain gear with us in backpacks.  Spectacular seeing that front come in so fast.  But most were whining and running back - in t-shirts and shorts, soaking wet.  There's something to that 'Be Prepared' thing.

The good thing about National Parks is that you CAN escape the masses easily - the bad thing is you have to deal with them before getting away from them.

Sat, 05/04/2013 - 22:23 | 3530987 Binko
Binko's picture

I liked your post. Here in suburbia just outside the SF Bay Area there are great masses of cars, fat people, more cars, loud people, pick-up trucks, obese people on little little powered tricycles and more cars. And everything is a butt ugly sprawl of fast food, auto repair and smoke shops mostly.

But just five miles away there is a cool local park with tons of trails that wind up through rock formations. The local trail bike clubs maintain the trails and you'll see a few bike riders and some hikers. But if I get off the main trails and hike in the hot part of the day I will often not see a soul. Just miles from a major freeway and I can find relative solitude just because I'm hiking up and down hills which virtually nobody these days wants to do.

Sun, 05/05/2013 - 05:29 | 3531582 cynicalskeptic
cynicalskeptic's picture

Contrast that with Camelback in Scottsdale.....  10th highest rescue site in the US.  You have this mountain in the middle of Suburban AZ sprawl surrounded by resorts.  They actually have a ranger at the beginning of the trail WARNING people about the hike ahead and you STILL have daily rescues.

It's not a particularly bad hike - but not an easy one.  Bad stretches of slickrock with pipe railings to grab - that or scramble on all fours.  Saw two people literally freeze on the rails (blocking others).  Too many people don't bring enough water or wear the right footgear.  Heavily eroded trails with loose rock make for easy falls and sprains.

But you still had the morons in sandals and flip-flops with little kids they'd be carrying after a half mile.  Nevermind the retirees who think they're in great shape because they can make it through 18 holes (though golf cartds don't do mountain trails).

 

Have spent some great times in NP's - try to avoid peak times and go early or late summer if stuck dealing with school schedules - better yet is off seasdon completely.  But the outright stupidity of people astounds me.  Driving and stopping dead to look at some critter, or trying to cope with an RV when they can't drice a regular car.  Even those you think should know better can be real asses.  Passed a BSA Troop on the way to Angel's Landing in Zion.  The worst behaved, most obnoxious group you'd ever meet.  OUR Scoutmaster would've had a fit and pulled them off the trail.  But this was an LDS unit - leaders are appointed by the church and boys HAVE to participate.  This was the same summer a bunch of kids died - allfrom stupid things... a rafting trip where tehy missed their take-off and hit class 5 rapids - flipped a raft and a kid 'lost' his PFD (how in the hell did a lifejacket 'come off'?.... another drowned in the Yellowstone river - found later in his sneakers....wtf?  'sneakers' not hiking boots and how did he 'fall in ' the river?...  My kids ahev done SewaBase and Philmont - impressed the hell out of the Philmont guides with our last crew.  Had to cut the tripback to 75 miles from 100 but still... not bad for suburban New Yorkers... 

Sun, 05/05/2013 - 10:27 | 3531901 AldousHuxley
AldousHuxley's picture

There are giant cacti in camelback. Bring a machete and a straw for cacti juice

There were McMansions all around that nature spot. Who the hell needs 10,000sqft in the desert?

Sun, 05/05/2013 - 14:17 | 3532332 Jena
Jena's picture

Joshua Tree National Park.  Plenty of hiking and rock climbing for the adventurous in this 1200 sq. mile park but absolutely hazardous for the unprepared.  Daytime temps can reach 115 with humidity in the single digits in middle of summer.

Every year rock climbers have to be plucked via helicopter and transported to the local trauma center due to falls.  Some don't make it. 

Even the car club aren't safe:  A couple of years ago two people from the Netherlands planned to drive through the park.  They pulled off onto a dirt road for some reason, got stuck in a wash trying to turn around and died while trying to walk out in the mid-August heat.  They left water in the car.

But the Joshua Trees and the roadrunners are nice.

Sun, 05/05/2013 - 09:33 | 3531802 H E D G E H O G
H E D G E H O G's picture

hey, Darwins Theory of Evoluton @ work. only the strong survive, weed out the lame and halpless. where better to test his theory but @ a Natural Selection National Park. long live flip flops!

Sun, 05/05/2013 - 10:30 | 3531906 AldousHuxley
AldousHuxley's picture

It is not survival of the strongest but of the fittest.

City hipster fashion doesn't fit we'll in real green nature.

Sun, 05/05/2013 - 12:18 | 3532102 rosiescenario
rosiescenario's picture

....and the crusie industry is also doing its Darwinian best to weed out those with below average immune systems....

Sat, 05/04/2013 - 20:07 | 3530722 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

It is part of the plan, next round of new employment is going to be in dismantling all of it. Don't realize when the socialists finishing destroying this country so they can turn it into a dysfunctional oopstopia, we are all going to be living in houses owned by the state the money with the only place you can spend the money is at the company(state) store and the only jobs will be digging a giant hole during the day and the night crews job will be to fill it back in all under the watchful eye of DHS stormtroopers armed to the teeth.

 

What is going on isn't incompetence (well it is) more like malice pushing the right levers steering the incompetence to destruction.

Sun, 05/05/2013 - 10:35 | 3531914 AldousHuxley
AldousHuxley's picture

90% of housing is already owned by the state via a vehicle called Fannie and Freddie Mac

TSA is your modern day make work job for useless citizens

Real estates tax is perpetual asset tax to the state, so they own all of the land too

Big myth that US is capitalist.

Sat, 05/04/2013 - 20:14 | 3530742 Freddie
Freddie's picture

This is all easily solved by running high speed rail lines from LA and The San Fran Bay area to Las Vegas and the casinos.

Sat, 05/04/2013 - 23:45 | 3531199 kchrisc
kchrisc's picture

I don't know about a "party train" to Vegas but a train to "camps" in the desert sounds just about right.       hujel

Sat, 05/04/2013 - 22:12 | 3530970 brettd
brettd's picture

How so dumb?

Public education monopoly.

Sat, 05/04/2013 - 22:26 | 3530992 brettd
brettd's picture

double post. sorry.

 

Sat, 05/04/2013 - 19:38 | 3530687 nmewn
Sat, 05/04/2013 - 19:40 | 3530689 JustObserving
JustObserving's picture

Stock markets, bond markets, housing markets and auto markets - all are distorted by the Fed's printing and the Fed promises to print even more.  Bond yields are the lowest in 237 years and savers are desperate for yields.  All the bubbles that the Fed is blowing will burst soon enough.  And US debt and unfunded liabilities keep increasing at $8 trillion a year.  The only exit from all these bubbles is either default or hyperinflation.  The more the Fed prints, the more difficult the exit.

Sat, 05/04/2013 - 21:58 | 3530944 yogibear
yogibear's picture

You can be sure Bubble Bernanke and the Fed attempts to  print out of debt.

Bernanke, Evans, Dudley and Yellen are all addicted  money printers.

They want massive inflation, although they would deny it's occurring.

 

 

 

Sun, 05/05/2013 - 07:18 | 3531648 de3de8
de3de8's picture

You know it's close when almost every auto co providing "0" interest rates for 60 months to sell their wares.

Mon, 05/06/2013 - 09:40 | 3533949 earnulf
earnulf's picture

60 months, heck, they are offering 96 month loans now.   Sad thing is that half the cars are selling for more than I paid for my house 17 years ago!

At least I got 1200 sq ft, a yard, hot and cold running water and a kitchen with a stove and refrigerator.   All the car does is seat five, go 100 mph and has a cool bluetooth keeping track of you.

Sat, 05/04/2013 - 19:40 | 3530690 Cugel
Cugel's picture

It sounds crazy on the face of it, but the "hey, free money!" crowd is beating the tar out of the "it can't last" crowd. As one of the latter it seems my only choices are to join the party or continue enjoying my artificially low standard of living. Stack for the long run, but in the long run I, certainly, will be dead.

Sun, 05/05/2013 - 05:38 | 3531586 cynicalskeptic
cynicalskeptic's picture

I have never ceased to be amazed by how long TPTB can keep absurd and improbable 'bubbles' going.  I expected the housing market to implode two years after rates went from over 8% with 20% down  to NINJA mortgages.   It lasted over a decade.   But what the hell, we bought at the 30 year low and bought a few levels above what we should have been able to - never did have to 'trade up' out of a too small starter house.   Still ahead on that one.

But having worked on Wall Street and seen the scheming and backstabbing that passes for 'talent' I'm dumbfounded at how the financial industry is still intact.  The guy running AIG now was the EVP of Ops for a firm I worked for... arrogant ass who got rid of anyone smarter than he was (standard tactic on Wall Street).   Which is why he FAILED completely to get a new broker system up and running.  Higher ups called him on the smoke and mirrors and made him a regional head to 'pilot' the new system.  He bailed and ended up destroying Met Life - thogh the top execs got wealthy.   The Capitalist Nomenklature....  abilty counts fo squat.  It's all about being in 'the club'.

Sat, 05/04/2013 - 19:45 | 3530699 Atomizer
Atomizer's picture

Sounds like our Chinese debt holding landlord is expanding their ghost city business model to pencil whip GDP figures.

Sat, 05/04/2013 - 20:04 | 3530724 seek
seek's picture

Same shit it happening in Phoenix. Sales up 30%+, new construction starts all over, frozen subdivisions thawed...and there's plenty of empty houses. WTF.

Sat, 05/04/2013 - 21:07 | 3530826 willwork4food
willwork4food's picture

Ditto in Hampton Roads. Construction of new homes and a new pharmacy going up all over...and things are pretty tough here economically with the military cuts.

Sat, 05/04/2013 - 20:06 | 3530729 ToNYC
ToNYC's picture

Casinos will take houses as chips to lure kept workers to sell themselves day and night after exracting the wood chips from players in global size. Mr.Potter-Time!

Sat, 05/04/2013 - 20:11 | 3530736 nbsharma
nbsharma's picture

The sad reality. Thank you for sharing. I am a first-time home buyer and can't believe the prices I see for the quality of the homes.

Sat, 05/04/2013 - 20:38 | 3530774 Cornfedbloodstool
Cornfedbloodstool's picture

I live and own a house in Vegas. 1600 sft starter home I bought in 2001. Over the past three years my wife and I started looking for something bigger and better. What a waste of time. The houses and neighborhoods in Vegas are shit. Even if your spending 500k the nieghborhoods are shit. High crime, vacant derilict houses on every block, the future Detroit. 54% high school drop out rate, highest in the country. Lake Mead is drying up, etc. Stay the fuck out of Las Vegas its a shit hole.

Sat, 05/04/2013 - 20:55 | 3530781 RebelDevil
RebelDevil's picture

Vegas.. maybe nice for a week of gambling and partying, but for employment and schooling!? - Down the fucking toliet they are. So I second your opinion Cornfed.

(Why the hell is that your username? lol)

Sat, 05/04/2013 - 20:59 | 3530792 Henry Hub
Henry Hub's picture

I thought what happens in Vegas was supposed to stay in Vegas.

Sat, 05/04/2013 - 20:56 | 3530794 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

I think you've explained why new homes are being built in markets with significant supply of vacant homes - the vacants homes are not in demand due to deficiencies in location, safety, schools, amenities, construction quality, etc

Sat, 05/04/2013 - 21:35 | 3530891 HulkHogan
HulkHogan's picture

...and we have a winner!

 

btw: That is exactly what I thought when I read the story's headline.

Sun, 05/05/2013 - 07:34 | 3531660 de3de8
de3de8's picture

In addition, during last bubble the priced out people bought at the fringe,far away from employment, those are the places in decline. Core markets will always survive, especially if supported on gov't teat like here in California east (MD). Regardless, still a lot of pain was and is still around.

Sat, 05/04/2013 - 21:19 | 3530859 algol_dog
algol_dog's picture

Vegas is definitely not what you see on the strip. You don't have to go far from it to see what it's really like. Glad to see others agreeing of what I've seen over there.

Sun, 05/05/2013 - 09:54 | 3531840 CheapBastard
CheapBastard's picture
Ritz-Carlton Lake Las Vegas to close in May [2010]
Read more: http://www.lasvegassun.com/news/2010/feb/08/ritz-carlton-lake-las-vegas/#ixzz2SQU9ZQEi true, that was 2010....but it's symbolic.....
Sun, 05/05/2013 - 04:25 | 3531551 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

Every picture I have seen of Lake Mead overr the last decade clearly shows that the water level is not being maintained and is dropping. The last one near the damn, the water was way below the intake towers.

 

Sun, 05/05/2013 - 04:34 | 3531554 Bearwagon
Bearwagon's picture

Does that mean no more boating accidents on Lake Mead? Think of all the gold that would be saved ...  ;-)

Sun, 05/05/2013 - 05:40 | 3531592 cynicalskeptic
cynicalskeptic's picture

Gold lost in Vegas ends up in Pawn shops, not the bottom of lakes.

Sun, 05/05/2013 - 07:36 | 3531664 de3de8
de3de8's picture

@BearW,
But will be so much easier to recover!

Sun, 05/05/2013 - 07:39 | 3531668 Bearwagon
Bearwagon's picture

I'm not sure if that's an advantage or disadvantage ... anyways you're right.

Sat, 05/04/2013 - 20:18 | 3530748 q99x2
q99x2's picture

Its not a re-covery its a cover-up.

Sat, 05/04/2013 - 20:38 | 3530772 Offthebeach
Offthebeach's picture

I've been thinking of blue tarping out from my side door on my van down by the river. Kind of how rich retired gov skool teachers have took out awnings on the side of their diesel motor homes. Only my van doesn't go anywhere, although It's our home. Sooo.....I guess you could say we too are "building", albeit sans permit.
If the significant other gets that Dollar Store part time job, we might spring for some cheap, thin Home Depot astroturf and really lux out the crib.
Green Shoots!

Sat, 05/04/2013 - 21:12 | 3530845 willwork4food
willwork4food's picture

+10!!
LOL. Long Home Depot astroturf.

Dude, you have GOT to write more. I like your style.

Sun, 05/05/2013 - 09:39 | 3531808 H E D G E H O G
H E D G E H O G's picture

+1 probably cheaper to scrounge a couple of cans of BLUE RUSTOLEUM paint and spray your "river view patio". you could always "huff" the leftovers, and of course you'll have to put up with the Blue Noses for a bit.

Sat, 05/04/2013 - 20:41 | 3530779 RebelDevil
RebelDevil's picture

Realtors are becoming Banksters!!!! - manipulating markets and all.

Many homeless, 8% vacant, and building MOAR before the vacancies are filled!?

Misallocation of capital IS another form of poverty caused by greed.  

Sat, 05/04/2013 - 20:54 | 3530791 in4mayshun
in4mayshun's picture

Recently my landlord complained that he is having cash flow problems because of some vacant properties, and that he should not be so burdened with all the cots of maintaining his properties....

My question is how morons like this have so much money where they can pay cash for foreclosed houses??? When are these retards going to understand that you don't get to pocket all the rent money you receive from your tenants? Houses are a freaking money pit and they always need some kind of work.

ATTENTION LANDLORDS: if you receive enough rent to cover the overhead of the property and have some positive cash flow, you are doing well. SHUT UP ABOUT HAVING TO UPKEEP THE PROPERTY!

Sat, 05/04/2013 - 21:00 | 3530807 RebelDevil
RebelDevil's picture

A good recomendation you could make to your landlord is that he will have more cashflow if he lowered the rent on the vacant properties, which would attract more renters that need a lower rent (supply and demand).
It's possible that rents are high as a kite now a days because of both property tax and mortagage payments alone.

Sat, 05/04/2013 - 21:31 | 3530870 Professorlocknload
Professorlocknload's picture

Rents are pretty much controlled by Government Section 8 Rates. They set the floor under them.

Any landlord may opt for Sec 8 if the rents are falling below that level. There are long waiting lists for section 8 voucher tenants and a shortage of eligible housing units. At least in my neck of the woods.

 

 

Sat, 05/04/2013 - 21:45 | 3530918 cynicalskeptic
cynicalskeptic's picture

Section 8 is for landlords who don't care.  You don't get any damage deposit and the tennants are hard on places with a sense of entitlement (even though what they pay is minimal).   Lots of people gaming the system.   Rented half of my parents old 2 family house to a Section 8 (she sprang that on us at the last minute) - royal pain.  The multifamily down the street was sold to a new owner who ONLY rented to Section 8.  High turnover and real trailer trash behavior.  The place finally sold to a developer who put up 3 McMansions......   what a mess..... one still hasn't been sold but the town somehow passed a law that gave contractors a break on property taxes if they lived in a house they couldn't sell......wtF?   REWARDING stupidity?

Sat, 05/04/2013 - 22:09 | 3530965 yogibear
yogibear's picture

More and more sections 8's and those on Food stamps. A growing business.

More people join the government handouts, more debt, Bubble Bernanke and the Fed print more money to buy the debt.

Perpetual debt Ponzi scheme.

Sat, 05/04/2013 - 20:57 | 3530798 surf0766
surf0766's picture

How long until there is a new gov't program to build ghost cities in the U.S?

Sat, 05/04/2013 - 21:32 | 3530881 Professorlocknload
Professorlocknload's picture

It's called HUD. Just give 'em a little more time. They'll get there.

Sat, 05/04/2013 - 21:51 | 3530926 seek
seek's picture

They already are, it's just they're being distributed as pork projects sprinkled among the living, rather than centralized ghost cities.

 

Sat, 05/04/2013 - 22:01 | 3530950 Professorlocknload
Professorlocknload's picture

Agree, and HUD is another inflation indicator. They almost always spearhead the reset.

Sun, 05/05/2013 - 05:46 | 3531595 cynicalskeptic
cynicalskeptic's picture

Was driving through the boonies of Pa a year back - HUGE highway projects under construction though ther ewas no traffic on the existing roads.  Meanwhile the bridges and roads in major urban areas are so godawful bad you're blowing tires and bnending rims in potholes.  They JUST started work on a replacement for the Tappan Zee Bridge - though it was built on the cheap during Korea and had a 50 year expected life (we're a decae past the expiration date).   Seems like the roads and bridges and rail lines peopl NEED to get to work are low on the list of spending priorities - behind a few cows.

Sun, 05/05/2013 - 05:50 | 3531599 Bearwagon
Bearwagon's picture

Yes, it's a big club, and people who need to get to work shirley ain't in it.

Sat, 05/04/2013 - 21:09 | 3530832 Professorlocknload
Professorlocknload's picture

This has many hallmarks of the early stages of a massive inflationary reset.

Seems they always start it with housing and pay increases for Public and Private Unions.

House prices are on the up, and the School District here just approved nice pay hikes. Brace, maybe?

 

 

Sun, 05/05/2013 - 06:24 | 3531610 bunnyswanson
bunnyswanson's picture
2012 $1,454 -5.2% $89,760 -30.4% 2011 $1,535 -4.1% $129,000 -7.2% 2010 $1,601 -- $139,000 -4.6% 2009 $1,601 -40.8% $145,668 -25.6% 2008 $2,702 1.0% $195,791 -22.0% 2007 $2,675 113% $250,920 2% 2006 $1,259 -- $246,000 119% 2005 $1,259 -- $112,186 --

Calif single family home in central valley. 

$120,000 when built in 1980.

Sat, 05/04/2013 - 21:24 | 3530869 Big Corked Boots
Big Corked Boots's picture

Thanks, but due to an enormous trade deficit, you can get a 40' shipping container for $2750. There are thousands of empties in Newark, NJ and they would make fine (economic) refugee housing.

Sat, 05/04/2013 - 21:36 | 3530895 Professorlocknload
Professorlocknload's picture

Just move into a million dollar REO like that guy down in florida. Then maybe find a repo'ed yacht to tie out back!

Sun, 05/05/2013 - 11:39 | 3532028 andrewp111
andrewp111's picture

Shipping containers make for nice jails too.

Sat, 05/04/2013 - 22:07 | 3530953 Judge Crater
Judge Crater's picture

Before most foreclosed houses can be rented out, these houses have to be renovated.  The costs of those renovations can be very high.  The speculator hires a Mexican crew to do some of the the home repairs, but you need a licensed electrician to do the electrical work and, in Las Vegas, probably a licensed plumber to fix up the plumbing if you expect the house to pass the building code and be rentable.  Anyone who has watched the TV series "Holmes On Homes" knows that fixing up a messed-up house is costly and time consuming.  The bank would have been better off letting the foreclosed homeowner stay in the house as a renter.  That is water under the bridge.  The U.S. housing market is a wreck.   

Sat, 05/04/2013 - 22:15 | 3530977 yogibear
yogibear's picture

There is no hiding it in Detroit. Maybe it spreads to other cities.

More welfare, disability, food stamps and section 8's. It's the future for the US.

Their not counted as being unemployed.

If everyone was sucking the government tit, BLS would report record low unemployment.

The government keeps skewing the numbers claiming a recovery.

Sat, 05/04/2013 - 23:56 | 3531224 kchrisc
kchrisc's picture

"Maybe it spreads to other cities."

What ails Detroit ails the whole US due the source being the FedRes and their government puppets.

Detroit just went first, or second if one counts Youngstown.

Sidenote: Youngstown is an interesting place, economic history wise. The unions and government (their the same thing) just squeezed that lemon dry until one day the biggest employer just closed and that was the end. Springsteen sure didn't mention that in his song.                               hujel

Sun, 05/05/2013 - 04:25 | 3531552 SoCalBusted
SoCalBusted's picture

+1000 on the Youngstown reference.  Maybe toss in New Castle, PA too.  They both have more in common than Route 422.

Sun, 05/05/2013 - 05:49 | 3531598 cynicalskeptic
cynicalskeptic's picture

A huge percentage of the work force 'on the dole' - a sure sign of an Empire in decline.  

 

The US is Britain post WWII - trying to hold onto Empire but broke and unable to do so.   It's bribing the unemployed with benefits when they really want JOBS that no longer exist here.

Sat, 05/04/2013 - 23:06 | 3531062 Son of Loki
Son of Loki's picture

Tons of empty houses where I live yet I read last week over 6,000 new boxes going to be built.....

 

I guess they expect lots of those NAR Aliens.....

Sat, 05/04/2013 - 23:27 | 3531135 Savyindallas
Savyindallas's picture

Someone tell me where I am wrong  -- If the Fed is buying $45 billion a month in mortgage backed securities  -the banksters can fund as many homes as they want -with ZERO risk, because Ben will buy them all. Eventaully when it all implodes, the banksters take not losses, because they have sold all the bundled up mortgages to the Fed  - Now the Fed should take enormous losses when it all implodes as clearly the collateral(the physical homes)  will not be sufficient to to recover the loans on the mortgages - Any other lender  ( i.e Danny Faulker and Don Dixon in the 80's ) would go bankrupt and would go to jail ) -  But with the Fed-no Problemo -they have staggering losses, but all they have to do is print more money. When all these enormous losses occur, they have forcelosed and own the actual physical homes. He who has the most gold (or other physical assets -i.e. homes) rules. When hyper inflation eventually comes their deficiencies are wiped away, as they simply print money and write off the debt. The fed (or their surrogate designees) now own everything. They are the landlords (the Masters) and everyone else are the tenants (the serfs) 

This scenario to me appears to be the BIg Conspiracy  -or a part of the Master plan for the feudal enslavement of America. Any comments? Where am I wrong?

Sun, 05/05/2013 - 09:39 | 3531809 TrulyStupid
TrulyStupid's picture

I think its more of an attempt to fleece the upper middle class private investors who are doing the buying. They will have to put up real equity against their mortgages which won't save them from eventual losses, but should isolate the lenders from catastrophic defaults.

The exisitng empty homes will be allowed to degrade... the mortages backing them have been effectively written off as soon as they hit the Fed's balance sheet.

It is dead money in reality and will have zero velocity going forward.. that is why the mortgage buying binge by the Fed has not been inflationary.

Sat, 05/04/2013 - 23:40 | 3531181 Stuck on Zero
Stuck on Zero's picture

There's nothing wrong with having 8% empty home in a city and be building new homes.  It happens everywhere.  People don't want the empty homes because they don't like them.  They do like the new homes, however, so they build more.

 

Sun, 05/05/2013 - 00:41 | 3531326 Fix It Again Timmy
Fix It Again Timmy's picture

Keep printing money and ALL problems will go away - people won't get old and shit won't stink.....

Sun, 05/05/2013 - 03:34 | 3531524 lasvegaspersona
lasvegaspersona's picture

Lots of new 2500 to 4000 sq ft homes going up in the NW part of the Vegas valley. It has struck me as crazy but knowing that Ben is behind it kind of explains things. 

I'll take a drive tomorrow and see if they are inhabited.

Just N of us is a high density area of small single family homes. It was hit hard in 2008 as they were way overpriced. Now mostly Sec 8. The local schools are greatly impacted.

When SHTF day comes it will get ugly. I doubt these kids have  much home support.

Sun, 05/05/2013 - 05:04 | 3531567 zipit
zipit's picture

Coming soon: Return of the NINJA!

Sun, 05/05/2013 - 11:36 | 3532023 andrewp111
andrewp111's picture

You will know it is near the endgame when you cats can sign mortgage documents with pawprints again.

Sun, 05/05/2013 - 05:24 | 3531577 SmittyinLA
SmittyinLA's picture

What's really crazy is Vegas is more than 50% cheaper than the worst parts of LA 

 

Sun, 05/05/2013 - 08:43 | 3531729 overmedicatedun...
overmedicatedundersexed's picture

the dust blows thru empty homes, the bleached white bones of America

Sun, 05/05/2013 - 09:52 | 3531835 yogibear
yogibear's picture

Bankster housing bubble #2, or echo bubble.  Bernanke and the Fed's attempt to reflate housing and stocks while grinding down the rest of the economy. 

Larger and larger school loans.

In the meantime $9.65/lb ribeye steaks at Wal-Mart, while filling up with $4.15/gal gas.

Nice job of Bernanke, Evans, Dudley and Yellen's transitory inflation.

Impoverish many for the sake of a few.

Mon, 05/06/2013 - 09:25 | 3533890 homepricefutures
homepricefutures's picture

Traders can play Las Vegas home prices with Case Shiller futures that are (infrequently) traded on the CME.  Front contract futures prices rose from 90 to 107 over the last year (consistent with cash prices).  Now the Nov 2014 contract is priced 118 bid/ 124 offer (versus current index of 105.7) for further increases of 11-17%.  Anyone think that prices (indices, actually) will be outside that range?  www.homepricefutures.com

Do NOT follow this link or you will be banned from the site!