Spring Has Sprung!

 

www.thebrazillteam.com

Spring is in the air and as temperatures rise, all segments of the Las Vegas real estate market continue to heat up!

While numbers have held relatively steady over the last six months, supply is dwindling, further driving up prices in the residential market. Properties priced correctly in Summerlin, Southwest, and Henderson are garnering multiple offers.  North Las Vegas properties are selling much faster as well, as a result of the buzz regarding Faraday and other companies moving into Apex. Good luck finding any properties under 200K in good areas!

Having a Mayor that is committed to the recovery and success of the City is also assisting with the strong market.

If you are on the fence about purchasing, now is the time to make a move as interest rates are still well below historic averages and we are still a year or so away from the top of the market.

Single Family Rental market

Currently, there is a 3 week supply of single family rentals on the market, today. This lack of supply is not only driving up rent prices and but also decreasing overall vacancy. We expect these rental rates to peak relatively soon as affordability declines. It will be interesting to see what happens when 6,000 multifamily apartment units hit the market in the southwest part of town. New apartment rents per sq ft are up to $1.60 to $2.00 psf, which is much higher psf than single family dwellings.

Residential Sales

There is a 2.77 months supply on all single family homes in Clark County. Homes under 300K have a 1.74 months supply. A normal market is 6 months. The median price excluding new homes for single family is 209K. At the top of the market it was 319K.

Where Are We Now and Where Are We Headed?

Currently, we are still 20% below the top of the market on homes under the FHA limit of 287K. Homes priced over 300K should remain flat, depending on location. These forecasts, however, are dependent on the global market and interest rates.

We are still in expansion mode, until supply rises along with vacancies. While we believe we are a year or so out from the top of the market, there are many factors that could change the current landscape. 2016 is an election year and I don’t anticipate too much of an impact this year but if the new administration raises capital gains taxes, it could have a negative impact on real estate. Interest rate hikes and the global economy are the only other factors that could negatively affect the market.

Commercial Real Estate

Land prices continue to slightly increase as demand grows for residential, multifamily, industrial, and retail. Office zoned land is the only segment that is lagging behind as we are still absorbing existing space and not seeing much new development. The last BLM auction in April netted the highest sales volume in years, with 846 acres sold for a little over 95MM.

Multifamily continues to strive with several notable deals trading in the first quarter; most notable was the Camden portfolio for 630MM for 4,918 units. This was one of the largest transactions for apartments in the history of Las Vegas. Lyric Apartments also traded for 65MM which was $173,803 per unit.

In the first quarter, the industrial market absorbed over 916,804 sq ft of space, while vacancy rates dropped to 6% from 6.5%, last year. In prime areas, industrial land prices have soared to over 500k per acre and several projects are currently under construction.

Similar trends were seen in both the office and retail markets.  During the first quarter of 2016, the office segment absorbed 169,000 sq ft  and vacancy rates dropped to 18.4% from 19% in late 2015.  Retail absorbed 406,173 sq ft, with Q1 2016 vacancy at 8.2%, down from 8.7% in Q4 2015.

For more specific analysis or for a free Brokers Price Opinion on your property, please contact Antone Brazill at 702.434.0091 or visit Brazill Team Real Estate.

Thank you for your business and have a great summer!
Antone Brazill

Advertisements

Las Vegas Real Estate Market Snapshot, January 2016

www.thebrazillteam.com

Happy New Year! Thank you for making 2015 another record year for Brazill Team Real Estate!  We appreciate you and your business.

We are optimistic that 2016 is going to be another stellar year! Based on the transactional volume the last few months and what is currently in the pipeline, we believe this will be another strong year for our market.  While real estate generally tends to slowdown in the months January and February, this does not appear to be the case this year.  In fact, the current market is reminiscent of 2005 and 2006 as construction is booming, unemployment is down, and the economic indicators for Las Vegas are up. Hopefully we do not soon forget what happened in 2008 and can take a responsible approach on lending and spending.

In the final quarter of 2015, numbers in the residential real estate market remained relatively flat, with the exception of average days on market which now is at 113 days, a slight increase from the 90 days reported last quarter. The median list price is $270k (flat) and average asking price per sq. ft. is $127, a slight increase.  While it is a sellers’ market, we believe pricing is a little optimistic, as thirty five percent (35%) of the sellers have had to reduce their price to get offers.

The median sales price of existing homes is $220k, a 6% increase over last year.  As such, the difference between the list price and sales price is $50k. The median sales price for new Las Vegas homes is $316k, a 40% difference than resale value, the highest difference in the nation. Based on these numbers, we anticipate either resale prices will increase or new home prices will decrease, as the normal spread is 15%.

Overall, the residential market is continuing to improve, a trend that will likely continue through 2016. The commercial market, however, remains in recovery in all segments -with apartments leading the way.

For more information about the current state of the Las Vegas real estate market, or to discuss buying or selling your real estate, please contact Stacy or Antone Brazill via phone, 702-278-3886, or visit The Brazill Team online at www.thebrazillteam.com.

This Las Vegas Real Estate Market Report was compiled by Stacy and Antone Brazill, The Brazill Team.  This report was developed using data from various industry reports as well as the Brazill’s vast knowledge of the local marketplace.  Stacy and Antone Brazill have worked in the Las Vegas real estate market for decades and their agency is deeply experienced in all facets of traditional and investment real estate including Multi-family, Land, Office, Retail, Industrial, Residential and Development. 

For questions regarding this report, or to obtain additional information about current Las Vegas real estate opportunities, please contact The Brazill Team at 702-278-3886 or visit their website, www.thebrazillteam.com.

Las Vegas Real Estate Market Report, September 2015

 

www.thebrazillteam.com

As we officially enter the final month of Q3, 2015, the Las Vegas real estate market continues to show signs of improvement!

Indicators across all four major segments, including single family residences, investment and rental properties, commercial real estate, and industrial, reflect the continued growth and rebound of our local market.

Residential Real Estate

The residential real estate market is not only strong but also continuing to improve, as prices have increased 9 to 11%, year-over-year, depending on location and price point.   Over 50% of listed homes are going into contract within 30 days.  This data suggests that if the property is priced correctly, sellers can anticipate offers within an average of 60 days.

Currently, there are 7,595 single family residences (SFR) available, not under contract.  The Las Vegas residential market is also averaging 2,440 sales per month, indicating the market is currently at or below a 90 day supply.

Absorption rates, however, vary within each price band. For example, properties priced at each of the following maintain a current supply of:

  • Under $300k – 2 month supply
  • $301-$500k- 5 month supply
  • $501k- $800k -9 month supply
  • $800k-$1MM- 10 month supply
  • $1MM & Over – 15 month supply

While the price band absorption is subject to location, it offers a strong indication as to the importance of pricing.

Though supply is relatively strong in the high end Luxe market ($1MM & Over), this price band appears to be improving.  As of September 1, 2015, Luxe market inventory was 355 available homes (priced above $1MM), while only 270 homes sold in the last 12 months.

The high end market is very sensitive to location with new construction in the Ridges and Macdonald Highlands commanding higher price per sq ft than other mature areas such as Tournament hills and Red Rock Country Club. The Ridges commanded the highest sale in years at 11MM last month.

Across all price bands, the median price of Las Vegas homes is $275k, which is still 15% lower than 2006, supporting continued gradual increased appreciation.

Notice of Defaults have also increased.  We anticipate this resulting in more trustee sales, which may affect the average cost of homes sold.  Additionally, Heloc’s and adjustable rate mortgages from 2005 and 2006 are still adjusting and, unfortunately, home equity has not rebounded enough to cover refinancing.  The Brazill Team is diligently monitoring this situation, to Las Vegas homeowners.

Investment and Rental Real Estate

Similar to the residential real estate marketing, the Las Vegas rental real estate market continues to show signs of improvement.

Currently, there are currently 2,853 rentals on the market in the Las Vegas Valley.  On average, 2,661 residences are rented each month, leaving an inventory of less than a 2 month supply of homes (1.07).

The time on market varies, according to price range.  As of September 1, 2015, calculations were as follows, based on monthly rent:

  • Up to $1000/mo – Less than .75 month supply
  • $1100-$1200/mo – 1.02 month supply
  • $1201-$1300/mo – .9 month supply
  • $1301-$1400/mo – 1.09 month supply
  • $1401- $1500/mo – 1.16 month supply

The market has also seen an increase in monthly rental rates.

Commercial Real Estate

Land prices throughout the Valley are still climbing!  Though single family dirt remains relatively flat, averaging $375k to $400k per acre in Class A locations, multi-family land is still heavily in demand, with prices ranging from $460k to $600k per acre.  Additionally, hard zoned, multi-family has been picked clean in the last 3 years and site selection has been a challenge.

Retail land is trading, when there are AAA credit leases in place, and single tenant development is increasing in good locations.   Industrial land is also trading, with tenant driven development.

Office Development – Medical office development on the rise.

Office Market – The office market is still struggling with oversupply and a 18.5% vacancy. New construction near hospitals, in all areas of the valley, is allowing the medical office segment to pick up.

Multi-family – The multi-family segment is still on fire with demand increasing.  As the Millennials market is opting to rent, rather than buy, as they want all of the amenities with less maintenance, builders are conceding.  Merchant builders are also cashing in as prices on Class A properties are closing near $200k per door.

Cap rates are compressing to low 5’s and in some cases sub 5. There are thousands of units slated to come online in 2016 so we will be watching vacancy next year to see if we are approaching hyper supply.

Retail – The retail segment is bouncing back!  The vacancy down to 9.7% and the asking rental rate has increased to 1.28 PSF NNN. The ICSC conference was finally packed this year with a lot of optimistic retailers signing several leases.

Industrial Real Estate

As with the other major segments of the Las Vegas real estate market, industrial real estate is also showing signs of improvement.  Overall, industrial vacancy is down to 6.6%, year-over-year.  Warehouse distribution is driving the increased demand, and pushing average rental rates to $0.57 PSF NNN.

 Conclusion

The Las Vegas real estate market is at the top end of recovery, phasing into expansion in most segments, except office. Multi-family is phasing from expansion to hyper supply with all of the new projects in the pipeline.

For more information about the current state of the Las Vegas real estate market, or to discuss buying or selling your real estate, please contact Stacy or Antone Brazill via phone, 702-278-3886, or visit The Brazill Team online at www.thebrazillteam.com.

This Las Vegas Real Estate Market Report was compiled by Stacy and Antone Brazill, The Brazill Team.  This report was developed using data from various industry reports as well as the Brazill’s vast knowledge of the local marketplace.  Stacy and Antone Brazill have worked in the Las Vegas real estate market for decades and their agency is deeply experienced in all facets of traditional and investment real estate including Multi-family, Land, Office, Retail, Industrial, Residential and Development. 

For questions regarding this report, or to obtain additional information about current Las Vegas real estate opportunities, please contact The Brazill Team at 702-278-3886 or visit their website, www.thebrazillteam.com.

Despite Increasing Vacancy as New Units Hit the Market, Multifamily Properties Post Big Revenue, Income Gains

Number of New Renters Continues To Outpace Number of Renters Ready To Move into Homeownership

Revenue and income growth at multifamily properties across the country, backed by Freddie Mac loans, continued to significantly outpace inflation, despite the boom in multifamily building which has resulted in rising vacancies, higher expenses, and higher debt service.

CoStar News recently conducted an analysis of full year-end numbers for loans securitized in Freddie Mac K deals.  According to their study, 2014 revenue and income grew at a 3.9% year-over-year growth rate as compared to a U.S. inflation rate 0.8%.  This was the smallest gain for a calendar year since 2008.

Nearly 60% of the loans securitized in Freddie Mac K deals have reported full-year revenue and expense numbers for year-end 2014. Full year-end numbers for both 2013 and 2014 were available for $82.5 billion worth of multifamily properties. The portfolio included 2,928 apartment properties totaling 764,666 units, excluding health care units.

In a separate analysis, Wells Fargo Securities found that the aggregate growth rate of revenue and NOI for multifamily properties, included in conduit CMBS loans, was about 50 bps higher than those in the Freddie Mac portfolio.

The increase seen in multifamily revenue and income comes despite a rise in overall vacancy from 5.8% to 8.2%, year-over-year, for the Freddie Mac-securitized properties.  Operating expenses at those properties also outpaced revenue growth, as did the annual debt service payment increase. Year-over-year, expenses increased 4.1% while the average debt service amount increased 4.5%.

Average revenue per room in 2014 totaled $13,002, up from $12,520 in 2013. The average NOI per room in 2014 totaled $7,183, an increase of $6,911 compared to 2013.

Significantly, of the 2,928 loans analyzed, only one loan was significantly delinquent, and only four loans showed being one month late in debt service. All other loans were paid up through June and none of the reporting properties showed an operating loss.

Demand Is Still Strong

According to CoStar Portfolio Strategy, the strong revenue and NOI performance reflects the surprising continued national demand for apartments, as renters quickly absorb newly built apartment units and keep rental growth and vacancies at healthy levels.

As of the first quarter, CoStar national multifamily data showed vacancies fluctuating between 4% and 4.5%, with the year-over-year same-store rental growth, for properties with 20 units or more, above 3%. The national estimates are based on CoStar multifamily data as of the end of the first quarter of 2015.

While the national numbers may carry some degree of volatility, demand remains quite favorable, making the turn in the cycle slower than anticipated, CoStar analysis shows.

At the center of the prolonged demand-supply balance is an environment that favors renting over owning. Despite gradually improving overall economic conditions, persistently low interest rates, and a healthier single-family housing market, a large number of young households continue to prefer renting over owning, or are not financially ready for homeownership.

One contributing factor, according to CoStar Portfolio Strategy, is that younger renters continue to face a slow employment market. As of March 2015, the unemployment rate for households aged 20-24 was still above 10%.

On top of that, part-time employment for this group is still high compared with historical averages. Part-time jobs currently account for more than 36% of their total employment, far above the approximately 28% annual average prior to the recession.

As a result, CoStar expects the number of new renters will continue to increase faster than current renters become homeowners. While that trend happens, the apartment market will continue to benefit and the turn of the cycle will continue to be very slow.

Individual Property Highlights

The five Freddie Mac securitized complexes reporting the highest revenue in 2014 were spread across the East and West coast markets.

Fig 1
But when it comes to properties with the highest per unit revenues last year four of five were in New York City.
Fig 1.1
Two complexes more than doubled their revenue year over year.
Fig 1.2
To learn more or to discuss current real estate opportunities, please contact Antone Brazil at please contact at 702-434-0091.

Source: http://www.costar.com/News/Article/Despite-Increasing-Vacancy-as-New-Units-Hit-the-Market-Multifamily-Properties-Post-Big-Revenue-Income-Gains/173191

Las Vegas Real Estate Snapshot: June 2015 Statistics

GLVAR Real Estate Statistics, June 2015

 

 

According to the Greater Las Vegas Association of Realtors (GLVAR), June 2015 was a strong month for Las Vegas real estate!

Though the number of available single family residential units and condo/townhouse units decreased, year-over-year, median list price increased just over 14%, for both segments, while average list price increased 13.9% for single family residential units and 7.8% for condo/townhouse units.

The number of available units listed without offers was mixed as single family residential units increased 4.3%, year-over-year, while condo/townhouse units decreased 0.2%.  Median list price of available single family residential units increased 12%, with median list price of available condo/townhouse units increasing 10.7%. Average list price of available units also increased, year-over-year, across both segments.

The number of new single family residential listings increased 11.6%, year-over-year, while units sold increased 14.2%.  In the condo/townhouse market, new listings decreased 2.1%, year-over-year, though there was a 6.3% increase in the number of units sold.

If you are interested in learning more about the Las Vegas real estate market or discussing current real estate opportunities, please contact the Brazill Team.

 

Las Vegas Real Estate Market Snapshot | 2014

 

www.thebrazillteam.com

While Southern Nevada’s economy has not reached the dizzying heights of the boom, it does seem to have safely left the bust behind! In fact, we think it’s safe to say the Great Recession appears to be officially over and the initial phases of recovery and stabilization are well underway, both in our overall economic position and our local real estate market. Is the Valley poised to grow anew?

Moderate growth continues unabated and is expected to continue into 2015. Between 2010 and 2013, new home sales increased 37.6 percent, out-of-state drivers licenses turned in to the DMV increased 28.6 percent, taxable sales increased 18.4 percent, and gaming revenue increased 8.6 percent. Though 2014 has shown some deterioration in terms of new home sales and in-migration into the area, taxable sales improved. Employment also increased 3 percent from July 2013 to July 2014.

These economic improvements have translated into improvements in our local real estate market. Occupancy in commercial real estate projects has increased by three percentage points to 2.9 percent and we are seeing growth in other sectors as well.

Las Vegas Industrial Market

The first half of 2014 looked promising for Southern Nevada’s industrial market, racking up over 2 million square feet of net absorption and knocking industrial vacancy below 10 percent for the first time since 2008. The question then was whether we could expect similar numbers in the second half of the year. If the third quarter of 2014 is any indication, the answer is maybe.

Net absorption in the third quarter of 2014 was 635,780 square feet, roughly equal to net absorption in the first quarter of 2014, and occurring in concert with only 14,248 square feet of new completions, far less completions than in the first quarter. Strong net absorption in speculative projects is a sign of sustainable recovery, and important given that speculative construction will likely loom larger in 2015 than in the past five years. Industrial vacancy decreased to 9.2 percent, two percentage points lower than one year ago. The weighted average asking rental rate increased to $0.55 per square foot (psf) on a triple net (NNN) basis, $0.04 cents higher than one year ago.

Las Vegas Office Market

Every year, Southern Nevada’s office market begins a new recovery, and every year it comes up just a little short in the end. Though the office market recovery has not been pretty, it is a recovery of sorts.

In the third quarter of 2014, net absorption decreased to 44,964 square feet from almost one half-million in the second quarter of 2014 and the third quarter of 2013. New completions were slightly higher, at 12,000 square feet. Vacancy rates managed to decrease to 19.3 percent from 19.4 percent in the second quarter of 2014. Asking rates remained in neutral, ringing in at $1.87 per square foot (psf) on a Full Service Gross (FSG) basis.

Las Vegas Retail Market

The second quarter of 2014 saw the retail market turn around and post positive net absorption after two quarters of negative net absorption. The third quarter of 2014 continued the positive trend, with net absorption staying just one step ahead of new completions; a good performance, but not a great performance.

Net absorption in the third quarter was 242,296 square feet, slightly higher than in the second quarter of 2014, and more than double net absorption in the third quarter of 2013. New completions also increased quarter-over-quarter and year-over-year, with a 220,000 square foot power center added to inventory this quarter. Retail vacancy decreased by 0.1 percentage points to 9.0 percent, while the average asking rental rate increased to $1.31 per square foot (psf) on a triple net (NNN) basis.

Las Vegas Medical Office Market

When we write that Southern Nevada’s medical office has gone from bad to worse, we feel as though we must be repeating ourselves. In fact, a pattern of positive net absorption for one or two quarters followed by one or two quarters of negative net absorption is emerging in the medical office market, creating a sense of running in place.

Net absorption in the third quarter of 2014 was negative 104,034 square feet, sending medical office vacancy up to 18.7 percent. Asking lease rates remained stable at $2.15 per square foot (PSF) on a full service gross (FSG) basis.

Las Vegas Land Market

Total sales volume for land in Southern Nevada remains well below the levels seen in 2007, but the market has recovered dramatically since the years of the Great Recession. The number of acres sold in the first three quarters of 2014 is higher than in the first three quarters of 2013, with 1,889 acres trading so far this year compared to 1,455 acres trading in 2013. Sales volume was higher than in 2013 in the first three quarters of the year, and naturally this means that the price per square foot of land is also higher. In 2007, land was selling, on average, for $22.93 per square foot (psf). After the market collapsed in 2008, land prices reached a low of $4.41 psf in 2012. In the third quarter of 2014, the average price for land stood at $7.61. This increase in land prices is indicative of the greater interest developers and investors are showing in the Valley’s land market.

Las Vegas Hotel & Hospitality Market

Southern Nevada’s hospitality market continued to improve through the second quarter of 2014. Average annual room occupancy, for example, jumped from 87.0 percent to 89.5 percent, and the average annual ADR (average daily room rate) dropped slightly from $121.73 to $119.75. This brought revenue per available room (RevPAR) up to $104.61 from $101.77. In 2014, RevPAR is now almost $10 higher than it was in 2013, a significant leap (though not as significant as the $15 leap between 2010 and 2011). This suggests that Las Vegas has largely recovered from the Great Recession, just in time for new expansions of the Valley’s room inventory.

Las Vegas Multifamily Market

According to statistics provided by REIS, multifamily vacancy in Southern Nevada decreased in the second quarter of 2014 (the most recent quarter of available data), extending a three year long streak. Vacancy stood at 5.5 percent in the second quarter, 0.4 percentage points lower than one year ago, and 0.2 percentage points lower than in the first quarter of 2014. Class A properties were 5.7 percent vacant in the second quarter, the same as in the first quarter of 2014. Class B/C properties were 5.3 percent vacant, 0.5 points lower than in the first quarter of 2014.

To learn more about the current state of Las Vegas’ real estate market, or to discuss real estate opportunities, please contact us or call Antone Brazill at 702.434.0091.