Northern Nevada Economic Update
Presented at CHASE International Company Meeting
July 29, 2015
By Leah Wagner
Corporate Relations Manager
So you’ve all heard about that battery factory that ‘s being built just outside of Reno. Of course Tesla is the talk of the town here, but was the Tesla deal just a one hit wonder because our legislature was cajoled into passing some outrageous incentives and because our Governor body slammed Texas, Arizona and New Mexico with a flashier tax package?
So now we have this giant shiny sparkly thingy out in the desert that the whole world is gawking at, but besides Tesla, is Northern Nevada’s economy doing ok now that the rest of us get to pay off Tesla’s taxes for the next 20 years?
As real estate professionals, we all know that home prices are rising significantly in our market. The new catch phrase in our region to describe rising home prices is “The Tesla Effect”. But is the euphoria of “The Tesla Effect” just a repeat of pre 2008 “Irrational Exuberance”, and when us actual Nevada taxpayers can’t handle making the payments on our handsome governor’s $1.25 billion engagement ring to Tesla, when this next housing bubble bursts, will we all get blasted with more gangrenous necrotic slime than the stuff that drowned us in 2008?
Yes, your clients understandably suffer severe PTSD from 2008, and when they see a surge in home prices, they freak out at the possibility of another bubble. What we must educate our clients with are the facts that home prices are not currently spiking in Northern Nevada because predatory lenders are passing out $800K mortgages to bums passed out in the gutter in front of the plasma center while Fannie & Freddie are pimping junk loans to Wall Street, and federal regulators are asleep at the wheel driving our housing market off a cliff.
The conditions driving the current economy and housing market in Northern Nevada are entirely different than pre 2008. Our housing market is not driven by the pre 2008 spec building on steroids and junk loans to defaulting borrowers who were already dead for 15 years at the close of escrow. Northern Nevada’s current economy is driven by the most solid and diverse economic growth in the nation.
What we are calling “The Tesla Effect” began before Tesla made their earth shattering announcement in September 2014 to build the world’s largest factory here in Reno. Tesla is NOT a one hit wonder. Before Tesla, we were already having economic flash flood warnings. Apple was here before Tesla. Dell was here before Tesla. Barnes and Noble and Amazon were here before Tesla. Petsmart, PetCo, Zulilly, UPS, FedX and Walmart’s distribution centers were all here before Tesla.
But after Tesla came, the entire world took a closer look as to why would Tesla choose Northern Nevada, and the flash flood before Tesla quickly turned into a Post Tesla Tsunami.
What qualifies as an economic Tsunami? For one thing, 5% growth projected over the next 5 years. For comparison, in the mid 2000’s high growth years when our economy was running at its peak, our record rate of growth was 2.2%. In our state’s entire history, we have never experienced 5% growth.
Where is this economic growth coming from and why is it coming to Northern Nevada?

Nevada’s business friendly environment

About that outrageous $1.25 billion tax abatement Governor Sandoval gave Tesla – Nevada wasn’t even close to what Texas and Arizona were offering – not by a long shot. Tesla is here because of Nevada’s business friendly environment.
Elon Musk, Tesla Motors CEO, stated “This is not just about the incentives,” he said. “Nevada is a “really get things done state. That was a really important part of the decision.”
Craig King, CHASE’s COO and I had the unique opportunity to have lunch on the day of the Tesla Announcement in September 2014 with Lance Gilman, Storey County Commissioner.

Lance regaled us with stories of the Tesla deal. Tesla asked Lance what the time frame was for obtaining permits in Storey County. Lance pulled a permit out of his briefcase and said, “Here is your permit. I have a shovel in the back of my truck. Let’s go break ground right now.” The Tesla execs were astounded. Many factors went into the Tesla deal, but Nevada’s lightning fast, lack of red tape permit process catapulted Nevada ahead of the competition.
“In other places, they (companies) may have 20 to 30 permits to pull or agencies to get approval from,”said Mike Kazmierski, president of the Economic Development Authority of Western Nevada. “Any one of which could stop the process.” . . . AND cost companies millions of dollars and years in the process of failing to get these onerous permits! But NOT here in Nevada!
Tahoe Reno Industrial Center
Besides being very tax and regulation friendly, Northern Nevada has another little economic TRIC up its sleeve that no other state has. Except this TRIC isn’t little. This TRIC is colossal. Of course the TRIC I am referring to is the Tahoe Reno Industrial Center. Located just a few miles east of Reno on I-80, TRIC’s land mass is the same size as the city of Las Vegas. TRIC is the largest Industrial Park in the World, and besides being the largest industrial park on the planet, TRIC has the most lenient business regulations and zoning ordinances of any region in North America. Combine the fact that TRIC is the most business friendly environment in North America with the fact that it is only 30 miles from the border of the most tyrannical anti-business state in the nation, it is purely logical that businesses are flooding into TRIC from California, and are scooping up land next to TRIC’s celebrity residents.
So who are some of the rock stars who moved into the hottest new industrial zip code out at TRIC?
Of course, Tesla is the most famous, and Tesla’s economic impact to TRIC is massive. Because of the gigafactory, the land immediately surrounding Tesla is now sold out to many other companies such as Panasonic that have a direct business relationship with Tesla.
In January 2015, Switch announced plans to construct a $1 billion data center to be located at the Tahoe Reno Industrial Center.

Switch’s Northern Nevada operations include a 3 million square foot facility – the same size as Tesla’s GigaFactory on a 1000 acre parcel. This center will store data for the US Government & fortune 500 companies like Ebay & Amazon, and create 5000 jobs – mostly highly skilled, many in the 6 figure salary range.

After landing superstars like Tesla and Switch, rumors are flying and the hot topic is, “What is the next amazing company that is coming to Northern Nevada?”
A much better question is “What is the next amazing industry that is coming to Northern Nevada?” because it is not just individual cool companies that are coming here – entire industries are relocating here.
Amazing Industries in Northern Nevada
While the whole world was bedazzled by the sparkliness of the gigafactory, in 2014 a multi billion dollar industry flew under the radar into Northern Nevada and made it their international headquarters.
It is the Drone Industry. Reno has been recently nicknamed “The Detroit of Drones”. In December 2013, Nevada was selected as one of only 6 FAA approved drone test sites in the nation. Nevada, naturally endowed with the best flying weather, the most open airspace, the best tax and regulation environment, the best technological and research infrastructure assets such as Nellis, Creech, Fallon Naval Air Station, UNR’s School of Engineering Drone Program and Desert Research Institute, plus with Governor Sandoval gifting the use of Stead Airport to Drone Research, Northern Nevada was the irresistible choice for incredible companies like Drone America, Ashima Devices, Flirty, Nevada Dynamics, and Google.
Of course, Tesla dominates the news of the manufacturing industry that has landed here, but did you know that in 2014, we actually had two electric car manufacturers move to northern Nevada?
Cenntro Automotive Manufacturing (headquarters)

Cenntro Automotive is a Nevada based manufacturer of all electric, commercial vehicles. The versatile Citelec and KOMBI EV, both zero emissions SMART vehicles are used in a variety of environments including parks, farms, warehouses, resorts, campuses, industrial facilities, and airports. Both models are manufactured in Sparks, Nevada.
Jobs created: 300
Located from: New Jersey

Here are just a few more amazing manufacturing companies that have recently arrived in Northern Nevada-
Advanced Refining Concepts, LLC Manufacturing

Advanced Refining Concepts, LLC owns a patented near zero emissions process that produces GDiesel ®, a state approved alternative diesel fuel with vastly cleaner emissions and more efficient combustion than traditional diesel fuel. GDiesel ® requires no modifications to vehicles or engines or existing storage infrastructure. ARC is based in Reno, NV with additional operations in McCarran and Sparks.
Jobs created:12
Located from: Nevada

Fulcrum Sierra Biofuels Manufacturing

Fulcrum Sierra Biofuels, a wholly –owned subsidiary of Fulcrum BioEnergy, is utilizing a game-changing process for converting municipal solid waste (MSW) that would otherwise be landfilled, into renewable transportable fuels. Phase 1 of the Sierra BioFuels Plant, located in Storey County, will process MSW into feedstock with construction scheduled to begin in January 2015.
Jobs created: 30
Located from: California

Eaton’s B-Line Business Manufacturing

Eaton’s B-Line Business offers a broad range of support systems, seismic bracing solutions, electrical enclosures and wireways designed to help save time for a lower total installed cost. The B-Line business serves customers in the commercial construction, oil and gas, mining, solar, communications and data centers, and other markets.
Jobs created: 49
Located from: Nevada

BeaverFit USA Manufacturing (headquarters)

BeaverFit USA is an institution of strength and conditioning equipment. Founded by former US Navy Riverines and British bridge builders, we have a unique appreciation for the community we build to serve, and the expertise to design and deliver world class training equipment. No matter your challenge or obstacle, we will provide an innovative solution to enable you to achieve your goals.
Jobs created: 25
Located from: United Kingdom

CustomInk Munaufacturing

CustomInk enables customers to design and order custom T-shirts for every occasion. Since 2000, the company is dynamic, forward thinking and has been recognized for workplace excellence. CustomInk strives to treat customers, vendors, and co-workers as it would want to be treated and has a strong sense of innovation and individual responsibility.
Jobs created: 261
Located from: Nevada

Eco Windows LLC Manufacturing

Eco Windows LLC is among the most energy efficient window companies in the country specializing in custom manufacturing and installation of the highest quality windows and doors with excellent long term value designed to save energy and reduce costs. Our commercial window and door products are of the most advanced technology and performance.
Jobs created: 17
Located from: Nevada

Aircraft Manufacturing Industry
In the 20015 Nevada Legislative session, SB93 was passed, which is an incentive package for aircraft manufacturing companies.
Directly related to SB93’s passage is an absolutely incredible, lifestyles of the rich and famous type company that I am dying to tell you about, but I can’t!! I promised Stan Thomas of EDAWN that I will not say a word until their press release, which should be any day now!!!
With Tesla and this company here, we are the epicenter of off the Richter Scale Cool manufacturing companies!!!
But the aircraft company that I can tell you about is Whisper Jet.
Whisper Jet, Inc. Service

Whisper Jet, Inc. manufactures a quiet technology helicopter aircraft for the military and emergency responders, and recently opened a local transportation service that serves passengers in the Reno-Tahoe area. Our single engine helicopters are designed with a proprietary technology that greatly reduces engine noise, hence the name ‘Whisper Jet’.
Jobs created: 18
Located from: California

The Biotec Industry
Northern Nevada has recently acquired some amazing biotec companies.
CuCo, LLC Manufacturing (headquarters)

CuCo, LLC designs, manufactures and distributes innovative products that address the unmet need of countering harmful effects of bacteria in three specific areas: Diabetic Health, Outdoor/Activity Wear and Institutional/Facility Care. By utilizing the intrinsic bactericidal properties of copper in our innovative product designs we will positively affect the lives of consumers.
Jobs created: 15
Located from: California
Gensano R&D Manufacturing

Gensano is a medical device and biologics manufacturer with an emphasis in regenerative medicine using stem cell therapies. Gensano’s vision is to create innovative biological products that optimize patient outcomes. The company is dedicated to the development of new technologies that will benefit surgeons, hospitals, and most importantly, patients.
Jobs created: 150
Located from: Nevada


NeoBiotec was informally announced by EDAWN at a private gathering a few week ago, and their public press release will be in the next few weeks. Neobiotec relocated to Reno from Koera, and has entered into a business partnership with DRI & UNR.

What the arrival of NeoBioTec, Gensano, and CuCo prove is that Northern Nevada has the desirable infrastructure to attract the most sophisticated high tech biotec companies here. We have UNR and UNR’s School of Medicine, and we have Desert Research Institute. More importantly we are only three hours away from Stanford University, UC Davis, & Silicon Valley but we are in an alternate universe of friendly taxes, regulations, and MOST IMPORTANTLY medium home prices of $240K instead of $1.8 million for a two bedroom loft. We have the necessary infrastructure, and companies can afford to be start ups here that cannot afford the Bay Area.

The Data and High Tech Industry
In the 20015 Nevada Legislative session SB170 was passed, which is an incentive package for data centers and companies that use servers or other computer equipment in their centers.
In addition to SWITCH, the following are some amazing data and high tech companies that have made Northern Nevada their home:
Koch Industries IT Applications Center

Announced March 12, 2015

Koch is a privately-held company headquartered in Wichita, Kansas with a presence in 60 countries and employs more than 100,000 people worldwide, which includes approximately 60,000 employees in the United States. Koch companies are involved in refining, chemicals, grain processing and biofuels; forest and consumer products; fertilizers; polymers and fibers; electronic components; process and pollution control equipment and technologies; commodity trading; minerals; energy; ranching; glass; and investments and holds 9,500 patents. They have invested close to $70 billion in acquisitions and other capital expenditures since 2003 to make life better around the world by efficiently converting resources into products and services that people depend on every day.

The Reno location will primarily serve as a satellite office focused on providing Koch Industries IT capabilities in the areas of Applications (Development, Analytics, Support, Databases, etc.), Cyber-Security, Global Networks (Architecture, WAN, LAN, Voice, etc.), and Computer Platforms (Cloud, Virtual, Converged). The new facility will also serve as an innovation and creative space for meetings with strategic vendors and will allow the company to host discussions and brainstorming pertinent technology in support of the Northern Nevada IT community. The company plans to fill approximately 20 positions in the first year.
Jobs created: 20 (in year 1)
Located from: Kansas

BlackRidge Technology Advanced Technology (Headquarters)

Announced February 5, 2015

BlackRidge Technology, a cyber-security company from Santa Clara, California announced the relocation of its headquarters and operations to Reno, Nevada. The company plans to initially hire 30 full-time employees and is constructing a new cyber security solutions lab. BlackRidge Technology cloaks and protects enterprise networks and cloud resources from unidentified and unauthorized users. Their patented Transport Access Control (TAC) technology changes the protection game, protecting against unidentified and unauthorized users and devices. TAC is a new and more fundamental way to protect against advanced and unknown threats, versus protecting against threats, one vulnerability at a time. This technology results in immediate and tangible reduction in the malicious unwanted traffic that poses the bulk of cyber threats today. The company was founded in 2010 and recently leased space in the South Meadows area of Reno where construction on the new cyber lab has commenced and is scheduled to be operational in the second quarter of 2015.
Jobs Created: 30
Located from : California
Ghost Systems Service/Data Center (Headquarters)

Ghost Systems’ SafePlaceTM Ecosystem is a complete cyber security solution that directly protects anything connected to a network, using future-proof “perfectly secure” technologies to create an impenetrable electronic network mesh – the electronic equivalent of Kevlar – which overlays onto existing public and private networks to prevent cyber theft of digital information.
Jobs Created: 150
Located from: California

When you combine TRIC, SWITCH, the incentives of SB170, Northern Nevada’s proximity to Silicon Valley, and our lack of insane taxes, barbaric regulations and astronomical housing prices, these factors alone amplify significant growth in our region. But in addition to these prodigious economic enhancers is one more gargantuan game changer that will make Northern Nevada the gravitational center of the tech industry.
It is the Super Loop.
The “Super Loop”, a 500 mile fiber line connecting Northern and Southern Nevada with Northern and Southern California will make Nevada the most digitally connected State in the US.

For high tech companies that depend on the fastest and highest capacity data transmission, economic development experts predict Reno will become the most desirable port on the Super Loop with its unrivaled tax advantages and strategic geographic location.
With companies like Switch and Tesla, Panasonic and Solar City, with us being a major hub on the Super Loop, with 5% growth and 55,000 new jobs conservatively projected for our region for the next few years, we are not in a bubble.
We are the main player in the West Coast distribution and logistics industry. We are the new epicenter of the western manufacturing industry. We are the Detroit of Drones. We are the Eastern Suburb of Silicon Valley. We are the Cradle of Innovation.
We are the best place to invest in Real Estate right now, right here in Northern Nevada.

Mayfair International Realty – A London Eye on the Market


A London Eye on the Market

Nick Churton of Chase International’s UK office in London takes a look at the year ahead in the international real estate market and finds a great deal to be optimistic about.

A new year always brings fresh eyes and impetus to the real estate world as new buyers enter the market and agents and brokers look with enthusiasm to the year ahead. There is a spring in the step of buyers, sellers and real estate professionals.

So this is a great time to take stock, look at the months ahead and keep a weather eye on international indicators. Like never before the health of local real estate markets – especially in the luxury sector – is linked to the health of the global real estate community as a whole.

North America and the UK have seen an upturn in financial fortunes over the past few years – particularly through lower employment and greater GDP. The confidence this has brought to the real estate market in these regions has been significant. But in the UK this year with a general election in May, and in the US in 2016 with a presidential election, we can anticipate periods of low pressure and associated turbulence which will affect activity and possibly slow growth. This is to be expected and is just part of the political and economic cycle.

When once asked what was the greatest challenge for a statesman, post war British Prime Minister, Harold Macmillan, responded, “Events, my dear boy, events”. And it is events that are one of the greatest challenges for real estate around the globe.

With the Chinese economy at a twenty-five year low real estate could be one of that country’s industries to suffer. Russia’s weakened currency through plummeting oil prices, international sanctions and political concerns has influenced the flow of international property buyers from that country. In Europe and the Euro Zone some debt-ridden member countries hamper growth across the continent. One feels that all this could dampen real estate interest: plus many individuals who wanted to invest in safe-haven real estate markets elsewhere in the world have done so already.

Yet, paradoxically, despite these events many real estate markets continue to flourish, exemplified by New York and London. For many London’s real estate market is seen as the world’s reserve currency and the same can certainly be said of New York. Influenced by these cities other regions and neighbours benefit.

The year ahead will no doubt throw many unwanted and unexpected events at us. Sometimes they will be minor and sometimes, as in Paris recently, they will resonate around the world. But appalling and heartbreaking as many of these events are, the desire of individuals to house themselves and their families and to invest their money wisely is stronger than the activities of terrorists, despotic leaders and rogue nations. Nature is stronger than man. But it is man’s nature to provide and improve. Which is why, despite events, the real estate market in most of the developed world will remain a dynamic one through 2015 and beyond.

Thinking of a Vacation or Retirement Home? Buy It Now

by The KCM Crew on September 19, 2012

When the economy was exploding in the early 2000s, many of us began to dream about purchasing that vacation home on the lake or securing a home in a more appropriate location for our retirement years. However, with the booming economy came skyrocketing house prices. Many of the homes we fell in love with quickly became out of reach financially. Perhaps we should take a second look at these same homes today.

With prices dropping by over 30% in some markets and with interest rates at historic lows, this may be the perfect time to do what we and our families have always dreamt of doing – buying that second home. Let’s look at the numbers.

Back in 2006 we may have seen the ‘perfect’ home but the $500,000 price tag was just out of reach. Today, we could probably get that home for $400,000 (if not less). We also would be financing it at the current mortgage rate instead of the rates available six years ago. The table below shows the difference in impact on our family’s finances:

Not every family is in the financial position to take advantage of the tremendous opportunities the current real estate market offers. But, if yours is, this may be the time for dreams to come true.

Mortgage bonds are down big within the last 45 minutes. We are LOCKING all in progress or floating clients immediately. This is a heads up that this is significant enough that we WILL see mid-day rates sheets re-price for the worse, across the board. Rates tomorrow should again be higher.

Moreover, this is primarily happening because of two things: 1) European Central Bank announcing plans to purchase debt in Spain & Italy (really only a short term solution), and 2) Fed Chairman Bernanke & indications he’s giving as to whether or not the Fed will do a 3rd round of Quantitative Easing (QE3).

See the live snapshot of conforming mortgages bond chart attached (last 3 months). Reminder that higher bond prices = lower rates, and vice versa. As you can see, today is a significant drop. Estimating rates could be ~.25% – .375% higher tomorrow morning, depending on how the rest of the day shapes up.

Odette Mortgage-Ephraim Schwartz

Homeownership: The American Dream by THE KCM CREW

Homeownership: The American Dream by THE KCM CREW

A major benefit to homeownership is community. There is a greater sense of community among homeowners than there is with renters. Studies have shown that homeowners have a higher participation in local volunteer activities; participate more in local political activities and organizations; have higher voting rates; and are more involved in self-help activities (like the PTA and neighborhood crime watches) than those who rent. Homeowners do not move as frequently as renters, therefore providing more neighborhood stability. This helps reduce crime and support neighborhood upkeep and value. Let’s look at homeownership as an investment.

In 1998 the average Homeowner’s net worth exceeded that of renters by 31 times. In 2001 it was 36 times and eventually in 2007 it was all the way up to 46 times that of renters. Even in these toughest times, the wealth of the homeowner is still over 30 times that of renters. Now, homeownership isn’t about a guaranteed financial short-term return – the market goes up, down and back up again. We have to be prepared for the long-term and a key component to wealth is homeownership.  In Pew Research Center’s The Home as an Investment Survey, 81% of Americans agree that buying a home is still the best long-term investment a person can make. There’s also the aspect of an educational investment.

United States Immigrants all talk about home ownership because they want a better education for their children. It’s proven that children of homeowners achieve greater math and reading scores, they have lower high school dropout rates, and more years of schooling by the age of 25. Not to mention there’s also a greater social network among homeowners than renters. You have a built in support system of neighbors and friends. You know the local merchants and they know you. You have that support system for you and your family – and it’s there for life.

There you have it. You now know the benefits to homeownership and the American dream.

The Advantages of Pre-Approval


The New York Times

The advantages of preapproval

The housing market is warming up in many areas, with multiple offers becoming more commonplace. Buyers who want an advantage in the bidding process will need more than a mortgage prequalification – they will need a preapproval.

Making sense of the story

  •   The differences between mortgage prequalification and preapproval are significant. Prequalifying for a mortgage is based solely on what a borrower discloses to the loan officer or broker about his/her earnings, credit score, and total assets, including what is available for a down payment. By contrast, a preapproval requires a borrower to provide documentation of his/her income and assets.
  •   The lender typically pulls the borrower’s credit report and score, while the borrower gathers together almost everything else needed for the actual mortgage underwriting: W- 2 wage statements; 1099s; recent pay stubs; bank statements; and statements from Individual Retirement Accounts and 401(k)s; and other assets that could show the borrower has the resources to buy and maintain a home.
  •   At one of the country’s largest mortgage lenders, Wells Fargo, the first quick review provided by an underwriter constitutes an agreement to lend. Other lenders may treat preapprovals as more of an opinion on the person’s ability to borrow, not a guarantee to lend.
  •   With so many homes receiving multiple offers, a preapproval is more important in today’s marketplace.
  •   The preapproval letter should include the amount a borrower is qualified to borrow, as well as the loan officer’s contact information. Some letters may have an estimated monthly payment, but details about the loan time and interest rate are not included.
  •   Timing also is important. Buyers should aim for obtaining a preapproval letter from a lender within 30 to 60 days of the expected purchase date. That is because some letters expire in 90 days.Read the full story

Demand for Lake Tahoe Homes under $500k up!

Homes at Lake Tahoe are becoming more affordable for the first-time home buyer for the first time since 2001, but it’s unlikely to last long.

Homes in the lower-priced segment of the Tahoe market are in demand, a first-quarter existing homes sales report by Chase International shows.

“Lakewide, the units in single-family homes are up by 15 percent from the same time last year,” said Sue Lowe, senior vice president and corporate broker for Chase International. “We are just seeing little to no inventory in homes under $500,000 around most of the lake.”



Click this link to read the full article in the Reno Gazette Journal.

Is the Housing Market Actually Recovering?

Is the Housing Market Actually Recovering?

by The KCM Crew on March 13, 2012

Everyone wants to know if the housing market is truly showing signs of a recovery. There are conflicting headlines every day. One day, we hear sales are up. The next day it is reported that prices are down. Is the real estate market coming back? The answer is ‘yes’ and ‘no’.

There are two aspects that must be evaluated: house sales and house prices. They will not recover at the same time. Sales are already increasing rather nicely while prices will still soften in many markets through 2012.

Home Sales

The National Association of Realtors (NAR) issues a Pending Home Sales Report each month. We can see by the graph below that sales have been increasing nicely over the last twelve months. Real estate professionals across the country are reporting that activity has increased compared to last year. The sales side of the recovery is starting to show great promise.

Home Prices

Many price indices have shown that national home prices are continuing to stumble. Even with demand increasing, we must look at where the supply of housing stock stands. Though ‘visible’ inventory (homes currently on the market) is shrinking, there is still a large overhang of ‘shadow’ inventory (foreclosures about to come to market as a result of the National Mortgage Settlement). This increase in inventory will outpace the increase in demand and thereby cause prices to continue to soften in many parts of the country.

Bottom Line

Housing is coming back. However, sales will come back before prices. We will not see prices appreciate until we work through the oversupply of homes on the market.

Here is the 2011 year end price banding charts for Lake Tahoe area.

Homesites at Squaw Creek in Squaw Valley USA

Homesites at Squaw Creek was established in 1990 as a private exclusive community along the South side of Squaw Valley. There are 48 residential parcels, 12 of which front the Robert Trent Jones Jr. designed 18 hole golf course. This subdivision has ski area and mountain views. Resort at Squaw Creek amenities are available too. A great place to invest. There is currently only one property available in this subdivision.

Offered at $2,350,000

Economy Panic? Why?

The Economy: Why All the Panic?

by The KCM Crew on August 17, 2011 ·

in For Buyers,For Sellers

For the last couple of weeks, all we have heard is how bad the current economic situation is. “The markets are going to crash and interest rates are going to skyrocket.” Panic has definitely engulfed the entire country.

Consumer confidence, as measured by the University of Michigan’s Consumer Sentiment Survey, has fallen to a number not seen in thirty years. This panic has actually had a negative impact on the economy.

It was said best by Mark Zandi, chief economist at Moody’s Economy:

“Confidence normally reflects economic conditions; it doesn’t shape them…

Yet at times, particularly during economic turning points, cause and effect can shift. Sentiment can be so harmed that businesses, consumers and investors freeze up, turning a gloomy outlook into a self-fulfilling prophecy. This is one of those times.”

What does the data actually show?

We decided to look at certain economic indicators and compare them to the numbers from a year ago. Here is what we found:

We are not making the argument that the current numbers are worth celebrating. We are only suggesting that the sky is not falling.

Bottom Line

Conditions aren’t as dire as some are professing. Make good sound financial decisions based on your own economic conditions. There is no need to panic.

The 15 Top Performing Real Estate Markets for 2011

Forecast: 15 top-performing real estate markets for remainder of 2011
Despite Q2 uptick, overall home prices expected to dip further by year’s end
Inman News™

U.S. home prices rose slightly in the second quarter, but ultimately fell in the first half of the year and are likely to fall further in the second half, according to a report from data and valuation firm Clear Capital, released today.
The firm’s Home Data Index fell 3.2 percent between fourth-quarter 2010 and second-quarter 2011, despite a 0.9 percent increase in the second quarter from the first quarter. Prices are expected to fall another 2.4 percent by year-end. Since June 2010, home prices have fallen 8 percent overall, the report said.
Clear Capital attributed the price declines to downward pressure from high unemployment and a high share of foreclosure sales. Bank-owned properties (REOs) accounted for 31.4 percent of overall sales at the end of the second quarter, a slight dip from 33.1 percent at the end of the first quarter.
“While varying according to each local market, it is unlikely national home prices have reached a true and sustainable bottom,” the report said.
Nonetheless, “it is clear prices have begun to level off and are not exhibiting as much volatility as we’ve seen since the downturn began,” said Alex Villacorta, director of research and analytics at Clear Capital, in a statement.
The Midwest and the West are expected to see the biggest price drops in the second half of the year: 4.1 percent and 4 percent, respectively. The Northeast and the South will stay relatively flat with declines of 0.8 percent and 1.3 percent, respectively.
Of 50 major metro areas, only five are forecast to see home-price gains in the second half of the year: Washington, D.C.; New York; Orlando; Dallas; and San Francisco. Among the 15 markets expected to perform best in the second half of the year, 11 are expected to see either gains or smaller rates of decline.

The Virginia Beach-Norfolk-Newport News, Va., metro area is expected to see the biggest price drop, down 8.6 percent, among the 15 lowest-performing major markets. Clear Capital predicts nine out of the 15 will either maintain or slow their price declines compared to the first half of 2011.

Washington, DC,

The improving economy and job creation mean growing demand for commercial real estate, according to the National Association of Realtors®.

Lawrence Yun, NAR chief economist, said job creation will be the biggest factor moving forward. “Job growth creates demand for commercial space, and the economy should be adding between 1.5 million and 2 million jobs annually both this year and in 2012, with the unemployment rate falling to 8.0 percent by the end of next year,” he said. “Given the minimal new supply in recent years, the rising demand means vacancy rates will be trending down in the commercial real estate sectors. Individual markets are now stabilizing and in some cases rising.”

From the second quarter of this year to the second quarter of 2012, NAR forecasts vacancy rates to decline 1.0 percentage point in the office sector, 0.9 point in industrial real estate, 0.5 point in the retail sector and 1.1 percentage points in the multifamily rental market.

The Society of Industrial and Office Realtors®, in its SIOR Commercial Real Estate Index, an attitudinal survey of more than 360 local market experts,1 shows a firming up of market fundamentals.

The SIOR index, measuring the impact of 10 variables, rose 6.8 percentage points to 57.5 in the first quarter, the highest since the fall of 2008. The Northeast and South drove improvements in market conditions. Vacancy rates are improving, but concessions continue to make it a tenant’s market.

Although the SIOR index remains notably lower than a level of 100 that represents a balanced marketplace, this is the sixth consecutive quarterly improvement after almost three years of decline. The last time the index was at 100 was in the third quarter of 2007.

A separate NAR commercial lending survey shows 65 percent of Realtors® report lending conditions have tightened thus far in 2011, and six out of 10 failed to complete a transaction this year due to financing problems. Regional banks provide the majority of commercial loans, followed by private investors. National banks are a distant third.

“Just as in the residential sector, lending problems are the biggest issue impacting commercial real estate,” Yun noted.

The multifamily sector is the only area that has clearly turned the corner, resulting in consistently falling vacancy rates and rising rents. “Solid rises in apartment rents will force some renters to consider home ownership,” Yun said.

NAR’s latest COMMERCIAL REAL ESTATE OUTLOOK2 offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data were provided by CBRE Econometric Advisors.

Office Markets

Vacancy rates in the office sector are expected to fall from 16.3 percent in the second quarter of this year to 15.3 percent in the second quarter of 2012.

The markets with the lowest office vacancy rates currently are Honolulu and New York City, each with vacancies below 9 percent.

Office rents are projected to rise 0.3 percent this year and another 4.3 percent in 2012. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, is likely to be 26.6 million square feet in 2011.

Industrial Markets

Industrial vacancy rates are expected to decline from 13.9 percent in the current quarter to 13.0 percent in the second quarter of 2012.

At present, the areas with the lowest industrial vacancy rates are Los Angeles and Salt Lake City, with vacancies in the 7 to 8 percent range.

Annual industrial rent should decline 1.5 percent in 2011 before rising 2.0 percent next year. Net absorption of industrial space in 58 markets tracked is seen at 126.1 million square feet in 2011.

Retail Markets

Retail vacancy rates are forecast to decline from 13.1 percent in the second quarter of this year to 12.6 percent in the second quarter of 2012.

Markets with the lowest retail vacancy rates currently include Honolulu; Long Island, N.Y.; and San Jose, Calif., all with vacancies below 8 percent.

Average retail rent is expected to decline 1.4 percent in 2011, and then rise 0.7 percent next year. Net absorption of retail space in 53 tracked markets is projected to be 5.4 million square feet in 2011.

Multifamily Markets

The apartment rental market – multifamily housing – is continuing to tighten as household formation grows. Multifamily vacancy rates should drop from 5.8 percent in the current quarter to 4.7 percent in the second quarter of 2012.

Areas with the lowest multifamily vacancy rates presently are Pittsburgh; San Jose, Calif.; and Portland, Ore., with vacancies below 3 percent.

Average apartment rent is likely to rise 3.4 percent this year and another 4.3 percent in 2012. Multifamily net absorption is forecast at 250,800 units in 59 tracked metro areas in 2011.

The COMMERCIAL REAL ESTATE OUTLOOK is published by the NAR Research Division for the commercial community. NAR’s Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR.

The NAR commercial components include commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute, Society of Industrial and Office Realtors®, and Counselors of Real Estate.

Approximately 79,000 NAR and institute affiliate members specialize in commercial brokerage services, and an additional 171,000 members offer commercial real estate as a secondary business.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.