Las Vegas Foreclosures and Sam's Club: Is There a Comparison to be Made?

Sales figures in the Las Vegas real estate market are definitely on the upswing. Speculation is increasing that the market is finally starting to find a bottom. For the last three months in a row, home sales have doubled from year-ago figures. What’s going on here? Actually, the very same thing that motivates many Americans to buy memberships at Sam’s Club. What is the attraction of Sam’s Club? You can save BIG money purchasing already low-priced items in bulk.

Hedge funds and other global institutional investors with deep pockets and five-year time frames are buying Las Vegas foreclosures IN BULK DIRECTLY FROM THE BANKS. If you could see the numbers you would fall off your chair, but you can’t, because these are privately negotiated transactions. We’re talking about “package deals” being done for 15, 30 or 50 million dollars a pop that involve 50-250 properties at a time. No joke.

Bottom line? Las Vegas foreclosure homes are currently selling at incredibly deep discounts to long-term intrinsic value. We’re talking about positive cash-flow investments by the boatload that will almost certainly experience major price appreciation from today’s “crisis prices” in five years time. Our market is a bonanza for the REAL smart money players on Wall Street and elsewhere, and I don’t mean those guys on the news who blew up the banks, and themselves. The players with real brains (and cash) stay out of the newspapers and off CNBC, believe me.

Is the Las Vegas real estate market beginning to find a bottom in terms of price? Absolutely no question in my mind. I would submit to you that the lions share of the pricing reductions resulting from this multi-year series of cataclysmic events has already occurred, and that any remaining price depreciation will be very minor by comparison. By 2010, the best properties at the best prices will be gone, sitting in portfolios earning a solid rate of monthly return, with plenty of future upside to look forward to.

Comments are closed.