Investors are good for market
Q: Can you share your views on all the investors, especially foreign investors, who are buying so many homes here? There was a time that I believe many people were angry over the investor aspect of buyers, but I see that attitude changing with the decline of so many neighborhoods and investors actually now wanting to build these neighborhoods back up. -- Debbie H., Las Vegas
A: That's a good question that I'm eager to address because I think it's important. First, let me say that I generally agree with your statement.
I believe that most local homeowners are starting to understand that the vast majority of the investors we're seeing today are very different from those folks -- often called opportunists or speculators who were buying multiple homes during our historic housing boom from late 2003 through 2007.
For one thing, most of the investors driving our strong home sales here in Southern Nevada for the past several months are paying cash for the homes they're buying. Of course, they're also buying homes at what I would describe as bargain prices.
The opposite was often true during our housing boom, when many multiple home buyers were taking advantage of adjustable-rate mortgages and other creative loan products to buy homes with little money down that far too many of them could not afford when prices began to fall.
According to the latest statistics from the Greater Las Vegas Association of Realtors, nearly half of all existing homes being sold here in Southern Nevada are being purchased with cash.
That's an unprecedented percentage in the history of real estate in Southern Nevada, or perhaps in any other major metropolitan area. It's no secret that most of these cash buyers are investors.
I know some people are concerned that investors typically rent out these homes until they feel prices have appreciated enough to warrant selling them. But that's fine with me. As far as I'm concerned, we should be thrilled to have people with the financial means to purchase homes anywhere in the world putting their faith and their funds into our local housing market.
Seeing more savvy and well-funded investors investing in our community bodes well for the future of our local housing market and local economy. And I would argue that it's far better for our neighborhoods and our economy to have people occupying these homes, as opposed to having them sit vacant.
Most of the Realtors have been saying for some time that homes here are undervalued. It's good to see so many smart-money buyers agreeing.
Finally, I think it would be counterproductive to restrict or discourage these investors, especially when they're helping us put people into homes and stabilizing our market.
For more information, consult a qualified local Realtor or visit lasvegasrealtor.com.
Rick Shelton is the president of the Greater Las Vegas Association of Realtors and has worked in the real estate industry for 20 years. GLVAR has 12,500 members. To ask him a question, e-mail him at ask@glvar.org. For more information, visit lasvegasrealtor.com. Questions may be edited for space and clarity.
