Government & Economy
According to this interactive chart, no one died in the entire state of Nevada on September 5th. Bars still closed and there are no events scheduled in the next few months. About 20,000 people got fired last week. Our governor is simply crushing the economy despite the onrush of crowds swamping Las Vegas this Labor Day weekend. There is growing resistance to wearing masks. Small business owners and parents saddled with kids who can’t go to school are revolting. The bulk of the “covid subscribers” are people collecting government cheese.
How does job loss affect real estate?
Job loss is just a prelude to foreclosures. A major correction is going to happen when all those foreclosures hit the market. If you have time to suffer a one hour presentation, this video breaks down all segments of the economy. More importantly, he compares it to the data from the September 11th event and The Great Recession. These are comparisons I have been using in my previous newsletters. This guy does it better. He supports all my theories with real information. The graph below says it all.
As you can see, the number of people asking for government cheese is significantly greater than the last 2 debacles. The number of people losing their jobs will continue over the next few months. Even if someone had a reason to come to Vegas, it’s not easy. The number of flights to Vegas is a fraction of what it used to be.
One out five mortgages was not paid last month.
That number will increase as people run out of savings. It’s only a matter of time before foreclosures begin to roll in. There are currently 17 foreclosures on the market. This number will double next month and again the following month. The only reason why properties are still selling at list price is because there is very little inventory. The median sale price has flattened off and will start decline next month. Many of the buyers are from California because California is out of control. We predicted a correction back in October 2018 and we are sticking to our expectations of a considerable drop in prices. We expect prices to drop about 35%.
When will he hit bottom? We are guessing middle to late of next year. As we approach the bottom, I be increasing the frequency of these broadcasts. Investors who followed our advice in the last recession snapped up properties and made significant profits. We will do it again. Don’t worry, we will let you know when it’s time to buy.
Eviction Moratorium Extended to October 15th
At the very last minute, Governor Sisolak extended the eviction moratorium to October 15th. This will accelerate the demise of investors who were stretched thin.
Less than 3% of our portfolio is non-performing. The numbers above describe most of our competitors. Our effective system for screening tenants uses over 20 years of experience and real data to screen out bad tenants. We rock! We place excellent tenants in our vacant units by offering rents a bit below market and raise our entry standards. Rents in general will be decreasing across the board by about 5% by the end of the year. Tenants in our portfolio who have lease expirations will be given an opportunity to sign new one year leases without an increase.
What can you do in the meantime?
Get your estate in order. There is nothing to buy at the moment so do some house cleaning. I took the picture below last week. It shows a vacant lot where once stood a commercial building. The commercial building was owned by one of our clients who didn’t listen to our warnings. We must have told that guy a hundred times to get his assets in order. This tragedy is what happens when investors think they are going to live forever.
This page covers the basics of asset protection. If your properties are still held privately, now is the time to work on your estate. Don’t let let a bulldozer demolish your hard work.