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Real Estate News 3/29/21

by | Mar 29, 2021 | Real Estate News | 0 comments

CDC Eviction Moratorium Extended

The Centers for Disease Control and Prevention has extended the national ban on evictions through the end of June. “The COVID-19 pandemic has presented a historic threat to the nation’s public health…,” CDC director Dr. Rochelle Walensky said in a statement.  According to CNBC, around 20% of adult renters said they didn’t pay last month’s rent.  Closer to 33% of Black renters reported the same. I am betting everyone a case of beer Sisolak will make a similar announcement tomorrow or Wednesday.

Our decades of screening experience has paid off. Our 1% delinquency rate rocks compared to the nationwide average. We are still able to toss naughty tenants for lease violations. Pets, damages to the home, HOA violations etc are all valid reasons to have tenants evicted. These are hard to prove but we have been successful on some occasions. Another strategy we have been using is filing small claims against those who us money. Evictions have nothing to do with debt so we are making sure the debts stay with the tenant regardless of their location.

Since we cannot evict people, we are recommending to our owners that we keep rents the same to keep the good tenants we have. Increasing rent during these times is a very bad idea.

Real Estate Correction Looming?

I am still scratching my head. Nothing makes any sense. The stock market is at all time highs while the unemployment rate is at 6.2% (twice pre pandemic levels) and 42% of all the retailers expect debt restructuring (RetailDive). Inventory of homes in Las Vegas is at a record low and people are stepping all over themselves to out bid each other. All this is happening while the unemployment in Nevada at 11.5% and an estimated 25% of the locals are not paying their mortgage. The forbearance is having a major impact on the market. I have an owner listing his house at over $850k and isn’t paying the mortgage because he doesn’t have to. In the meantime, he’s collecting rent because there is zero incentive to lower the price.

Bankruptcies are expected to skyrocket (MoneyGeek). About a 5th of all the US currency was printed in a year (CityAM). Interest rates for investors have already been jacked up by Fannie Mae (HousingWire). We would expect those restrictions to increase and everyone agrees interest rates are going to go up. All of these clouds are converging.

Nearly every buyer here is from California. I have surveyed all my colleagues and no one has had a local buyer in the last 6 months. I predict once the properties start to tank in California, the flood gate will slam shut and prices will fall here. California prices are also a function of the forbearance. When the forbearance ends you can set your watch for foreclosures 90 days from that date. However, this will just signal the start of the avalanche, the bottom will take years to materialize.

Nevada Legislature

The Nevada legislature is overwhelmingly democratic now. The bills on the table are horrendous for property owners and investors. Here are just a few examples:

Assembly Bill 161 –  This would eliminate an already difficult eviction process and require something similar to a foreclosure. Property managers would not be able to represent landlords. Expensive attorneys would be required and cases would not be heard for months.

Assembly Bill 141 – This bill would increase the length of the no-cause notice. As you may know, we use this “no cause notice” to get rid of tenants who are naughty. Tenants who have been longer than 1 year but shorter than 3 years, would need a 60 Day Notice. Tenants who have been longer than 3 years would need a 90 Day Notice.

Assembly Bill 218 – This bill would prohibit landlords from collecting an application fee and reduce the amount of money we could charge for normal wear and tear.

What can you do?

Contact your representative today and tell them how ridiculous these bills are!

Click on this link to find your representative.

TIPS:

  • Write what you want to say on a note / email so you can copy / paste your complaint.
  • There are multiple representatives for each property and be sure to address both 161 and 141.
  • Be sure to hit up each representative for each property.

Here is the good news. These idiots have a long way to go to make these real.  Below is a detailed process of how it works:

1. A bill is drafted at the request of a legislator.
2. Bill is submitted to a respective committee. There are various committees that are specific to various topics.
3. The committee must allow a public hearing.
4. Committee meets and decides if it should go further. (Most bills die here).
5. If the bill gets through the respective committee then it goes to the floor where a vote is taken.
6. If a bill passes in house it has to go to the other house.
7. Once a bill goes to the other house, it has to go through the same process all over again as outlined in 2-4.
8. If the bill passes both houses then it has to be signed by the President and Secretary of the Senate, the Speaker and Chief Clerk of the Assembly, the Governor, and the Secretary of State.
9. Then the bill goes to the Legislative Counsel who compares the enrolled copy with the engrossed copy, meaning is it the same bill that the houses passed. If it’s all correct then it gets printed and sent to the Governor.
10. Finally, the Governor then decides if he or she will sign it.
11. And this all has to be done within 120 days so at any point anyone from any of the houses and/or departments listed above can “slow walk” the process making it harder to meet deadlines.
Now that all sounds simple enough, but there is a whole bunch of other stuff that goes on through this very slow process. Each bill has to be read 3 times on the floor in each house. Each house can amend bills. Behind the scene, simultaneously, negotiations among the legislators is taking place which very simply goes something like this, “I’ll support your bill if you support my bill” or “I’ll kill your bill if you kill my bill” or “I’ll kill your bill if you even think about supporting that bill”. Then you have the lobbyists who are also working to secure similar negotiations.
The other factor is who is sponsoring the bill. Do they have standing within the house? How many co-sponsors do they have? Is the bill conflicting with another bill that a more powerful legislator has? Does the bill conflict with a group that another more powerful legislator has an “agreement” with?
What I have outlined is just the tip of the iceberg. But the point is, getting a bill passed is like herding cats. It’s a messy process with thousands of people making thousands of negotiations all at the same time and while you are trying to keep an eye on all of it you have to keep a level head or you will lose your mind. You don’t freak out that the cats are going everywhere until they are standing in the middle of the road facing down an 18 Wheeler.