Confidence, Doubt and Las Vegas Homes

The Michelle Sterling Las Vegas Real Estate Team happened to have a meeting scheduled last Monday afternoon, which was the first trading day in the U.S. financial markets after the S&P downgrade. The DJIA had closed down over 500 points just an hour before and the mood around the conference table was one of concern. I stress that the mood was one of "concern" rather than panic because we do business at ground zero for the nationwide residential real estate catastrophe and it's pretty hard to shake up my crew after what we have survived over the last three years. An interesting thing happened during the course of the meeting which we quickly recognized to be fortuitous. A number of team members began receiving emails and text messages during the meeting from buyer clients who were deciding to put their purchase plans on hold due to the "market meltdown." Rather than allowing this to deflate our confidence, we took the opportunity as a group to directly address the issue of "cold feet" and how to best meet a challenge that would surely accelerate in coming days. We talked about the historically low interest rates, the difference between payment vs price and the incredible opportunity created by the lowest mortgage rates on record. Another topic that came up right away was Las Vegas' position at the top of the list for cities in America where it is cheaper to buy than to rent. Next we spent some time on the economy in general and the notion that we might be slipping back into a second recession. This topic was quickly disposed of as we readily agreed that even if other parts of the country had begun to recover during 2010, Las Vegas has been in full blown recession since 2007 and nothing had changed for us to begin with. We then turned our attention to the characteristics of our market and the momentum it currently carries. Las Vegas foreclosures continue to be the hot-ticket item with number crunching investors and the segment of the market being transacted for cash continues to exceed 50% month after month. The best way to gauge sentiment is to watch how people vote with their money, so the team decided to keep a particularly close eye on the percentage of cash buyers going forward. As long as that number stays sky high (like it has been for two years running) we are probably going to be fine.