Irvine Housing Blog

I’m still scratching my eyes looking at the picture of the featured house.  Did TIC really think it was a good idea to cram a couple more houses into this development instead of having a GD sidewalk in front of the house.  This is a sign of the times.  I love the older neighborhoods with sidewalks and a nice parkway between the sidewalk and street.  I guess they weren’t running out of land or developers weren’t quite as greedy 40 years ago.

Yes, the presentations are PM. I obtain comparable rents directly from the MLS. I don’t know of a good website to get this history. You can infer a lot from asking prices on the MLS and Craigslist.

also, it is a freakin pain the move with a family. Simple as that. No dollar amount plug in is going to show what a pain that is. These are where people live. This isn’t some financial instrument that is easy to value.

Moving around apts for “move in specials” year to year gets old really fast.

Try renting a SFR home under a 7 year lease agreement. Let’s see what kind of annual rental increases they will price in. Even at 3%, rents will be 22% higher by the end of the lease.

Also, in NV, there is no personal income tax. So rental parity will always be be lower than CA because the net after tax cost of owning a house is higher in NV while the after tax returns are higher for investors. Just a different type of market. Homes there should always in theory be closer to the “financial modeling” rental parity because of this skewing.

The weaknesses you point out are true for any aggregate analysis. The special circumstance properties are always undervalued in Zillow or epraisal or other automated valuation models because those models can’t pick up the unique character of the property.

“That is because what a renter prefers is different than an owner.”

That is only true to a point. Renters like nice properties like owners do, but renters are often not willing to pay what owners are willing to pay to obtain the niceties. Owners over-improve their properties all the time and add little value. Renters may discount these improvements more than other owners, but it isn’t discounted to zero.

Renters will pay more rent for corner lots with greater privacy or granite counter tops and other amenities.

The vacancy rates in Las Vegas are bad. However, when you think about vacancy, the problems tend to be concentrated at the bottom of the housing ladder. A property that rents for $1,200 per month can always find a renter by lowering the rent. A property that rents for $700 per month may not be able to find a warm body with a job no matter how much the rent is lowered. The key to investing in Las Vegas is to stay away from anything renting for less than $850 per month. I prefer SFDs to condos for this reason.

In Turtle Rock $2500 to $2800 seems like a sweet point for renting a 3 bedroom condo with additional study room (2000 sf to 2700 sf).  The size varies alot.  For $1700 to $2200 seems to be a sweet spot for a 2 bedroom (900 sf to 2100 sf).  Single family houses seems to rent for more, and apt building for less.  Seems like the apt building in NPB are better value without factoring in the schools.

I believe prices will decline for another year or two in Las Vegas, and appreciation will be slow for another year or two after that; however, once the supply problems abate, I believe the market will see a significant rebound appreciation up to rental parity levels.

Right now, the only reason more investors are not buying these properties is because they fear values will drop. Once it is widely believed the bottom is in, the 10%+ cap rates will be very attractive. Further, in 3 to 5 years, many people who walked away from their mortgages will be able to buy again. Between the investors who aren’t worried about continued declines, and the owner occupants who are re-entering the buyer pool, I believe prices will go up steeply for several years. Also, once the market has had a year or two of double-digit appreciation, then the kool aid buyers will be participating in full force.

I want to have all the properties I want before the crazies come bid the prices back up again.