Is Water a reason not to Buy Real Estate in Las Vegas? (part 1)

Pat Mulroy, General Manager of the Southern Nevada Water Authority

Is water really a reason not to buy real estate in Las Vegas?!  I hear this all the time from people who do not live in the Valley.  It is a valid question especially considering all the media attention given to global warming and the changing climate.  To start the discussion its important to know that when the Colorado River Compact was signed in the 1922 no one realized that lowly Las Vegas would grow to the extent that it has and our city was only allocated 4% or 300,000 acre feet of water per year of the total lower basin allocation.  In comparison, Arizona was granted 37.30% or 2.8 million acre feet and California was granted 58.7% or 4.4 million acre feet per year that can be drawn from the lower Colorado. 

So we start with a deficit!  In 1922 the population of Clark County was less and 5,000 people and now in 2008 we have more than 2 million and the allocation is still the same!  By the way, an acre foot of water is equal to an acre of land covered by water one foot deep or 325,851 gallons or what is considered the annual usage by a family of four for a year.  Family’s in the Southwest use only .25AF/year.  Since the compact is not changeable Mrs. Mulroy needed alternatives to ensure that Southern Nevada had enough water now and into the future assuming that we will have another million people residing in Las Vegas by 2030.

Part two next time…   In the mean time ask questions or comments!  Please visit my website as well!

Why does the media give Vegas the “bum rap”?

CNBC's Jane Wells

CNBC

I have been showing you several articles of late that see the value of  buying real estate in Las Vegas for investment or for second or vacation home purposes.  Some periodicals have however, been telling readers to expect “prices” to decline in Las Vegas another 20-30% over the next year and not to expect any improvement until 2010 or even later. 
These periodicals like Money magazine tell readers if they were to buy in Las Vegas to offer “30% less than asking price”!  Most bank owned properties list at well below current market value to attract multiple offers and then counter the highest few  and then settle on a price higher than originally asked.  In these situations, I tell my clients that if they want the property they need to offer more than the asking price since they will be competing against many other buyers for the home. 
So how does this jive with offering 30% less than asking on any property in Las Vegas- It does not work!  Maybe compared to the original price but not in this market!  This has only created confusion and misunderstanding among potential buyers and sellers in this crazy market.
Check out the Video about the Vegas market with Jane Wells:

I want to give a shout to a couple of my favorite Las Vegas haunts!

Just a short distance east from Summerlin is Rosemary’s.  Located in a non-descript but upscale shopping center, Rosemary’s offers a fabulous dining experience, (I think it serves among the best food in Las Vegas!) expertly prepared by husband and wife chef/owners Wendy and Michael Jordan.  Chef Michael trained with Emeril Lagasse in New Orleans and the cuisine reflects his creole influence with dishes like hoppin’ john and cheddar grits.  Rosemary’s caters to the local crowd and has a great happy hour in the bar, half price bottles of wine on Sundays and lady’s night Wednesday  half price entrees for ladies!    I really love dining at Rosemary’s and am glad it is in the neighborhood! 

El Sombrero is a very small Mexican restaurant located in the Arts District in Downtown Las Vegas.  Housed in a VERY understated building, the El Sombrero was opened here in 1950 by the family of the current owners- 1950!  Teresa and Humberto own it now and he is the master chef and Teresa handles the often crowded dining room with a friendly manner.  I am a big fan of the tamales but the enchiladas, tacos and chile verde are on my favorite list as well.  Come early for the huevos rancheros and the chorizo and eggs as well!  The El Sombrero is a part of Las Vegas history that I hope is around for a long time to come! 

Local Economic statistics and forecast

Somer Hollingsworth, President and CEO of the Nevada Development AuthorityI attended a membership luncheon for our local Realtor Association, the GLVAR last week and I want to share some of the facts presented by Somer Hollingsworth, (Also a Native Las Vegan) President of the Nevada Development Authority about state and local economic activity:

  • No local or state income tax
  • No business income tax
  • No estate tax
  • 95% of companies hire locally
  • Between 200,000-250,000 miles of fiber optic cable in the ground
  • Cheapest operating cost in the US for a corporate headquarters
  • 96,000 people (net) moved here in 2006
  • Median family income up 66% from 1996-2006
  • Value of a home up 168% in ten years
  • Over 38 million visitors in 2006, up 31% in ten years
  • Convention business up 95% in ten years
  • Room inventory 132,000, up 42%
  • Over $40 Billion in new construction in the next five years

This is data validates my opinion that the Las Vegas economy is thriving and despite the critics, the demand for housing and real estate in general is strong but will greatly increase in the next few years!  I stongly feel that we will see the start of the recovery in the housing market in 2008 and demand will gradually grow over the next couple of years!  So what are you waiting for, get off the sidelines and take advantage of these lower prices, foreclosures and builder incentives- they will not last forever!             

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