2011 annual real estate report
TRANSCRIPT
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2011 Hihlihin heReidenil Rel Ee Mrke r 2011
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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
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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
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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
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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.
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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
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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
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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.