FOR LAS VEGAS HOMEOWNERS SLOW REAL ESTATE NEWS IS GOOD
If, as the saying goes, “”no news is good news,” last week was almost a good week for U.S. real estate. Las Vegas real estate watchers like me found no hint of the kind of sweeping changes that can alter residential real estate patterns for buyers and sellers. Possibly because of the looming election, little space was devoted to real estate—with the exception of one thought-provoking discussion. CNBC’s commentary embodied the major theme: they wrote about high-end real estate being subject to a “slowdown” and “uncertainty”—but then went on at length to explain why the “ultra-wealthy” have a “very strong intent to purchase real estate.” When you read articles like that— analyses that come down forcefully on both sides of a proposition—you know it’s a slow news week. BTW, by CNBC’s definition, the “ultra-wealthy” are those with a net worth of more than $50 million. Las Vegas homeowners should sleep more soundly knowing they already own some of what the ultra-wealthy covet “very strongly.” Stepping down from those precipitous net worth heights, news reports about the merely wealthy echoed a similar sentiment—internationally, too. YouGov is an outfit that surveys consumers across a dozen countries. They found the top echelon of consumers to be “cautious but optimistic” about real estate. YouGov reported that 45% of foreign buyers are looking to purchase real estate—nearly twice as many as those who plan to sell. Homeownership levels began to edge back up from the five-decade low that The Wall Street Journal has been tracking—but were not yet making giant gains. On a newsworthiness scale, that news found its way almost to the bottom of the WSJ’s Real Estate section. Almost as an afterthought, the Journal mentioned “tentative signs” that renter families “are starting to gain the confidence to buy homes.” That could foreshadow real news, but apparently, not quite yet. The reason that it was almost a no-news week is because there was a newsworthy account on a real estate-related news front. MarketWatch ran an in-depth report that spotlighted a trend that home builders and architects would be wise to note. The industry is “behind the curve” when it comes to building homes that accommodate today’s trend toward an “all-delivery, all-the-time” population. As at-home grocery and household goods delivery numbers skyrocket and Amazon Prime cartons clog post offices everywhere, secure places for deliveries to be left are not yet being widely incorporated into houses. Mail slots won’t do it, “and curbside mailboxes aren’t set up to handle it.” Crime statistics bear out that the porch-pirate phenomenon is a rising problem. There are several lock-box type solutions, but the design answer that I thought was the real newsmaker of the week was architectural: built-in drone drop-off platforms. NASA investigators told the Washington Post that homes need to be more drone-delivery friendly, with “chimneys turned into package chutes…or mailboxes that are tall enough to stay clear of pets and children.” With thought-provoking ideas like that, even a slow real estate news week can give us something to think about. When your own family news events start to center around your personal Las Vegas real estate plans, I hope you will consider me your go-to resource!
LAS VEGAS SMART HOUSE GADGETS MADE INROADS IN 2016
A number of “Smart House” products made headway in 2016, so before the crystal ball gets hauled up over Times Square, this is an appropriate moment to review which ones promised relevant real estate applications. Anyone who will be house hunting or selling in Las Vegas anytime soon might want to become familiar with some of what’s out there. It’s safe to say that the whole notion of household management gadgets that plug into the internet—an idea that was exotic a few years back—is now readily recognized by the majority of Las Vegas consumers. More and more of us are beginning to consider which ones will make life easier (rather than just producing a ‘gee whiz!’ reaction from friends and family). The best smart features really do add value. The greatest enabler for most smart house devices is the presence of a home wireless network. Whereas installation was formerly tricky and expensive, it’s currently close to foolproof (even for those without a twelve-year-old to handle the installation). And prices are definitely down. You can find plug-and-play wireless routers for under $40—some of them carrying 90+% customer approval ratings. Pricier models are more powerful. When it comes to having a real impact on Las Vegas real estate commerce, true smart house innovations are those that have a practical application for controlling household systems. Those dealing with household security are among the leaders. There are smart deadbolt-enabling kits that remotely control compatible deadbolts. There are wi-fi-to-internet-connected video doorbell outfits that do a lot more than doorbells—they broadcast and record video of visitors while allowing truly remote smartphone monitoring. Also in the security realm, there are smart batteries that plug into existing smoke or CO2 detectors. If the alarm goes off, it alerts your smartphone. You can then call 911 or silence the alarm. Battery-operated garage door openers have always been remote—but some of them now are smart, too. Just tap your mobile device’s screen to open or close the garage door. Soon, manufacturers say they will automatically open when your car nears the driveway, and close when it’s safely inside. If you’ve ever had a nightmare about being on vacation when one of your house’s “water-prone places” floods, smart water monitors can send an alert to your mobile device. Smart light bulbs can be your artistically-attuned mood managers, changing their demeanor from bright white to softer tones based on the light in the remainder of the room. Some sense motion to help them decide whether they should turn themselves on or off. They can even pow-wow with the heaters, deciding that the heat should be turned on or off, depending on whether you’re at home. More on the entertainment area are the smart speakers, like Echo or Google Home. They’re always on, slavishly awaiting your request for information about the local weather, news, or the kind of questions that occur to you when you know a robot database is craving attention. They’re called “speakers,” but they’re really pretty decent-sounding complete sound systems—so making your music library available for instant playback is increasingly popular. Not yet available is a Las Vegas real estate smart speaker application that would respond to the command “play music that makes prospects want to buy this house.” Until they come up with that one, to sell you own Las Vegas home, better just call me!
LAS VEGAS MORTGAGE INTEREST AND DR DIEBS EXPERIMENT
If you look up the term “normalcy bias,” you find yourself swimming in psychological theoretician talk, most of which deals with people’s response to disastrous situations. The theory behind it is that when faced with the unknown, there is a tendency among even rational human beings to misconstrue new (and even dangerous) circumstances as being more normal—hence, safe—than is really the case. What this has to do with Las Vegas real estate is not as far fetched as you might think. Dr. Inhalt Konig Dieb, a German language Professor now at Purdue University, recently published a paper which delved into the tendency of people to assume the best—even when it is not likely to be the case. He chose current mortgage interest rate history as a current working example of the phenomenon. His results bear on decisions Las Vegas home buyers might well heed. Dr. Dieb first took the actual history of average monthly mortgage interest rates from 1950-2015 and created a line chart. It showed what anyone in Texas would expect: like almost any economic series over a similar 65-year time-frame, the display traced a line that goes up and down in a recurring pattern. Interest rates rise to a certain point, then fall, then rise again, etc. The only difference is that in this chart, as is the case in reality, at the end of the chart depicting 2006 to the present, a flat line runs along the bottom. That is the case at present right here in Las Vegas: mortgage interest rates have flatlined in historically low territory. That segment stands out, stretching far longer than in any previous period. Dr. Dieb next created two more charts, both of which he captioned “Future mortgage interest rates: 2017-2025.” On one chart, the mortgage interest rates showed a return to what has been the historical pattern—namely, that rates rise for a while, then begin to fall. On Chart #2, it showed a continuation of the current situation: just an extension of the very unusual condition of historically low interest rates flat-lining along the bottom of the range. Dr. Dieb then assembled 123 test subjects, all of whom were homeowners and mortgage-payers. He presented each first with the historical chart, then asked them which of the “Future Mortgage Interest Rate” charts they thought more likely to predict the future. The result was startling: more than 75% of the mortgage holders thought the low interest rates on Chart #2 was more likely continue than the rates on Chart #1—which clearly represents what is much more likely. When asked for the level of certainty, those choosing the flat-line chart were more certain than the others! This may or may not reflect “normalcy bias,” which was Dr. Dieb’s conclusion—but it does reflect what many local residents tend to assume: that there is no rush to take advantage of today’s low mortgage interest rates. People do have a tendency to assume that what is currently true will continue to be true. But if you agree that that is not necessarily a safe assumption, do give me a call. Right now is the traditionally slow real estate season—and that means there are many great opportunities just waiting for the right buyer! If you think you might be in the market for a Las Vegas home, starting the process sooner rather than later has a good chance of being a smart decision. When that time comes, I will be waiting right here, ready to answer your phone call!
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