Economy & Real Estate Updates

A Map of the United States

What a year 2020 turned out to be! The COVID pandemic coupled with an uncertain economy contributed to where people moved to around the country. Additionally, with many companies offering remote work, this allowed many to move to less densely populated areas or where the cost of living was significantly less. So, where did Americans move to during 2020?

Top Inbound States:

  1. Idaho
  2. South Carolina
  3. Oregon
  4. South Dakota
  5. Arizona
  6. North Carolina
  7. Tennessee
  8. Alabama
  9. Florida
  10. Arkansas

Top Outbound States:

  1. New Jersey
  2. New York
  3. Illinois
  4. Connecticut
  5. California
  6. Kansas
  7. North Dakota
  8. Massachusetts
  9. Ohio
  10. Maryland

What were the main reasons for moving? According to United Van Lines, which has tracked migration patterns for many years, the top reasons were: family reasons, being closer to family, employment change and lifestyle change.

How will 2021 shape up to be? With similar circumstances surrounding all of us, we may find this year to be very similar to last year. Of course, much will depend on how contained the pandemic will be and what part of the country the economy improves and job growth occurs.

Information Source: United Van Lines (https://www.unitedvanlines.com/newsroom/movers-study-2020)

Las Vegas skyline

Though it appears much of 2021 will resemble 2020 due to the COVID pandemic, higher unemployment and limitations on many businesses, certain sectors are actually booming within the valley! Real estate development is one of them. While housing is in demand and supply is low, other sectors of real estate are also moving forward – specifically new development. Here are a few we can look forward to during 2021:

NEW HOUSING DEVELOPMENTS

New home builders have been busy building new communities throughout the prior year and we expect them to continue throughout this year. With resale inventory is way below average and interest rates setting new record lows, many buyers are interested in purchasing a home. Granted, the median price of a new home in the Las Vegas valley is considerably higher than the median resale home. However, this is not deterring prospective buyers. We anticipate more new developments throughout 2021.

RESORTS WORLD

Still under construction, the new Resorts World on the north end of the Las Vegas strip is planned to open during Summer 2021. The 59 story hotel with some 3500 rooms will feature some modern tech, including a 100,000 sqft LED screen.

VIRGIN HOTEL LAS VEGAS

On the site of the former Hard Rock Hotel, Virgin Hotel – part of the Virgin group owned by Richard Branson – was expected to open January 15, 2021 but has since been delayed. Reports indicate that the current COVID situation may be to blame. However, with nearly a full year ahead of us, we anticipate the hotel to open its doors sometime this year.

These main projects do not include the many commercial, industrial and apartment developments currently under construction within Las Vegas. Other large projects were planned, however, due to the ongoing pandemic and disruption in supply chains, many have been put on hold, such as the Drew Las Vegas and MSG Sphere.

As the situation improves in the coming months, we look forward to seeing these unique projects once again move forward.

A young family standing in front of their home

The eviction moratorium has been lifted in Nevada effective October 15, 2020. As a result, late payment notices and 7 day pay or quit notices are starting to be served. Of course, for Landlords experiencing a lack of rent, this is news they have been waiting for. For tenants behind on payments due to financial hardship, this is less than ideal. So, what solution can be offered?

Negotiation. Having a meeting of the mind is key. This is an opportunity for landlords and tenants to work together. The situation we all are facing is far from ideal and it is bringing on hardships that we haven’t seen in a long time for both tenants and Landlords. So, perhaps coming up with a mutual solution is the answer.

As a tenant behind on your rent, are you able to come up with a reasonable, monthly re-payment plan that would be agreeable to your Landlord? Since rent is not forgiven, it will eventually be owed. Perhaps coming up with a plan to make your Landlord whole is the answer. Don’t forget! Many landlords have mortgages that have to be paid and a lack of income can put a financial pinch on their monthly obligations. Or they may rely on the rental home you are living in as retirement income.

As a Landlord, are you able to negotiate with your tenant for a monthly re-payment plan? Perhaps writing up a promissory note that you and your tenant can agree to will make it a real possibility. As a Landlord, if your tenant has a financial hardship, are you able to work with them? While rent is not forgiven, are you able to settle for an amount? That, of course, depends on your personal situation and decision.

When negotiation happens, especially in this instance, late payments and evictions can be avoided. Of course, every situation is different and calls for its own solution. In the end, we all hope that this situation will ease soon and a sense of normal is restored.

The Las Vegas real estate market continues to be on fire amidst a pandemic. Buyers are willing to pay more for a home as inventory remains tight and interest rates low. The average sold price of a single family home during August 2020 was $335,000 while condo’s averaged $185,000, another new record for the Las Vegas area (source: Las Vegas Realtors)

Though unemployment remains high and the economy slow in recovering, with many directives in place to mitigate the spread of the coronavirus but restricting economic growth, demand from individuals with savings and stable employment is keeping the real estate market alive and thriving. This scenario also goes to show market stability. How long will this trend continue? That is difficult to predict, as many factors go into keeping real estate alive and healthy. However, economic recovery from pandemic restrictions will be key.

We hope to see the pandemic get under control soon and as a result, positive developments in the economic sector.

Its no secret – the complaints are out there! Both homeowners and tenants agree – HOA violations can be a hassle, especially when they seem to arrive consistently for an endless amount of reasons; trash cans left out, a weed in a yard, paint that is faded, items left outside and more! It can be exhausting and even nerve wrecking to see a letter in the mail from your homeowner’s association. You can sense it’s another violation. So, what should you know and what can you do?

Here’s what to know: When a neighborhood is first planned and developed, with the intention of having rules and regulations, documents are created to establish the community rules through the builder / developer. The builder will eventually relinquish control to the community itself. Elected board of directors are established (through a vote of homeowners) and a HOA management company is typically hired to enforce the rules and regulations. That’s how it all starts at the beginning.

So, the rules for the community are established well in advance. As a result, when you get an HOA violation for, as an example, weeds in your yard, this rule was most likely established by the builder! Now it is enforced by the HOA management company, who is hired for…rule and regulation enforcement. Of course, the diligence to enforce the rules by one HOA management company compared to another will vary some. While the board of directors can alter the rules or add new ones, most stay fairly intact.

As a homeowner, prior to purchasing a home, you are presented with the community rules and regulations during your due diligence period in order to review them to see if they are acceptable to you. If they are accepted, then the rules will pertain to you and your property.

If you begin to receive violations, there are a few things you can do – depending on the situation.

  • First, if the violation is for a basic infraction, it would be in your best interest to resolve it quickly. Unresolved HOA violations can lead to a second notice and fines! Respond back to the HOA that it was resolved and even present photo proof.
  • If the violation seems to be mistaken, be sure to respond to the HOA as well. Indicate your position to the HOA violation and even present a photo to show you are in compliance.
  • If the violation is for a costly improvement, such as faded exterior paint and repainting the home is the cure, communicate with the HOA if you need extra time or experiencing a financial difficulty. Communication is key to having a good working relationship.
  • Finally, if a matter is serious, you have the option of discussing it with the board of directors during one of their meetings. Be sure to communicate with the HOA management company in that regard.

While HOA violations can be perceived as a nuisance, they are designed to protect property values and maintain the appearance of a neighborhood. In the end, they were established beforehand and are now simply being enforced. Compliance as well as communication is key to developing and maintaining a positive working relationship.

Panorama view of Las Vegas at sunset in Nevada, United States of America

As the economy has slowly re-opened in Las Vegas, due to certain restrictions lifted, so has the interest of buyers in the local market. This was clearly evident in June, as the median price of a home sold through the MLS was $325,000, a year over year increase of about 7%. This was an increase of $6,000 from the prior median sold price in March of $319,000.

These figures go to show a couple of things. First, as people returned to work, this ignited a demand for housing. It really shows how crucial the local hospitality and service industry is to the housing market. Even though real estate prices did not see a noticeable decrease between March and June, the slow down in activity was a clear indicator.

Second, with real estate values holding during an economic shut down, it really showed the stability of the Las Vegas housing market to be able to absorb a significant event, such as this. With prices appreciating at a modest rate, this prevents a bubble from forming and significant fluctuations from occurring when an economy shifts. No doubt, current low interest rates also play a role in keeping prospective buyers motivated and ready to buy.

As the economy continues to recover, with more tourists coming for a visit, we can expect the real estate market to keep thriving.

Simplifying your life can give you more time for what you enjoy

Many people dream about the day they get out of debt. The day they pay off their credit cards. The day they pay off their car. The day they pay off their house. Financial self help books abound in advice on how to get rid of debt. Yet, the truth is, Americans are consistently in debt. Why the desire to be debt free?

Most realize that having no to little debt means they can semi or completely retire, reduce their work load and spend more time with their loved ones. However, it seems with each passing year, more and more Americans acquire more debt. They trade out their nearly paid off cars for new ones. They up-size to a newer and bigger home. They make large purchases on impulse, charging them to credit cards. Even when some have cash available, they end up spending it on comforts and luxuries. While each person can make their own decisions, if your goal is to simplify your life, work less and even retire early, getting out of debt is a key piece to the puzzle. How can you do that?

First, be reasonable with your purchases. Evaluate if you actually need something. Is it a necessity or a luxury? Don’t buy on impulse. Wait a few days after thinking about a purchase to see if you still feel the same way. You might be surprised.

Second, see if you can keep that car that you have nearly paid off. If your car is still running well and you’ve been maintaining it, be weary of clever marketing tactics! Remember, a new car loan is typically for 60 months or more – yes, that’s 5 years! Some even allow for 72 or 84 months – 6 or 7 years! These are significant debts to think about carefully!

Finally, a house payment is the biggest expense that someone can take on. If you have a house payment, you can do a few things. First, see if refinancing can save you money due to lower interest rates. Can you refinance with a 15 year loan? Can you make additional principle payments to help pay your house off faster?

Remember, the more debt you have, the more you are subject to economic changes. Loss or reduction of income can seriously affect if you can meet your obligations. Additionally, if you plan on working less, retiring or simply having more time, getting out of debt is something to consider.