Short Term Rentals - Good or Bad...

Short Term Rentals, rentals under 30 days. Are they Good or Bad?

The STR business is a $30 billion annual industry in the USA.

  An estimated 500,000 of Las Vegas' 42 million annual tourists choose STR's instead of 

hotels for their lower cost and accessibility away from crowded casino's.

 Of the 5,800 STR properties listed on VRBO and AirBnb, 

there are only 162 with legal permits or permission.

Las Vegas is the only jurisdiction in the Valley to permit short-term rentals. 

N Las Vegas, Henderson and unincorporated Clark County do not allow the rentals.

So that means over 5,500 of these STR's are illegal and unregulated.

   

Licenses cost $500 per year, and does not include the Conditional Use Verification (CUV) 

or a Special Use Permit (SUP) from the Planning Department.

They also need to adhere to any rules set by your HOA, condo board or co-op.

Permitted STR owners must provide proof of liability insurance coverage of $500,000

Owners must also collect and remit between 10.5 percent and 13.38 percent transient lodging tax.

  Weddings, birthday parties, bachelor/bachelorette parties and other special events are not allowed.

On Wednesday December 5th 2018, the Las Vegas City Council 

voted  4-3 to limit the number of new STR in Las Vegas.  

People opposed to STR claim neighbors have to deal with

party's, prostitution, drugs use, parking, loud music, and garbage in yards.

People for STR claim they are revitalizing the distressed areas near the strip.

 Claim it helps the economy and gives more options to tourists.

702-229-3500

24-hour hotline to register a complaint about a STR in your neighborhood.  

Offending homeowners can be fined $1,000 a day.

 View  Short Term Rental Application Instructions HERE

Website to Apply for a Short Term Rental License HERE

View a Map of the Registered STR HERE

Personally, our family enjoys using STR instead of Hotels when we vacation.

We enjoy the common areas that Hotels don't have like the Kitchen, Living Area and Yard.

Having a kitchen makes keeping drinks cold, breakfast and snacking easier and cheaper.

Las Vegas is a lot different. People come here for the Late Night Scene, 

24 Hour Gambling and Bars and now we have legalized marijuana. 

That's not what we do on vacation and not what I want in my neighborhood.

I'm sure the Casinos don't like loosing any revenue and had an influence on the Dec 5th vote.

For my Investor Clients considering buying a home to be used as a STR,

You would be taking a risk that soon there will be new rules and regulations to deal with. 

It doesn't seem that at this point anybody is enforcing the existing Laws, but might be soon.

The "Mother Load" of All Las Vegas Economic Statistics

The Las Vegas Global Economic Alliance has an Amazing Data Portal.

This Data Portal compiles Statistics on All Major Economic Indicators for all of Clark County.

Including Population, Labor, Unemployment, Incomes, Gaming Revenue, Tourism, Conventions, 

Housing, Airport Passengers,  and even the Number of Gallons of Gasoline Sold.

You can also Search and breakdown All of the Statistics by Township.

For people who like Statistics, this is the "Mother Load".

With all that said, I spent an hour looking at several stats and the Good News is,

almost every Economic Indicator is moving in a Positive Direction.

The few that were Down include; Existing and New Housing Closings,

Convention Attendance, Weekly Wages and Hours Worked.

Why Housing?

Rising Interest Rates and a Slowing Down from the Last 3 Years of Rapid Recovery.

 https://www.lvgea.org/data-portal/regional-overview/

Home Prices Dropping and the Market Slowing...

 Back in August we looked at these same graphs and asked,

If this is a Market Slow Down or a Seasonal Trend.

We can now see that there has definitely been a Slow Down and Home Prices are Dropping

The next question is now... Why?

 Could be a combination of any of several reasons.

Could be that anyone who has wanted to buy already has.

Or, Home prices have gone too High too Fast.  Maybe because it's an Election Year.

But probably the main reason is that Interest Rates are at a 7 Year High.

 High Interest Rates combined with Higher Home Prices 

lead to more Unaffordable Mortgage Payments.

I still think we will see the usual Rise in Prices this Spring as 

the Raider's start looking ahead to where they want to live in Las Vegas. 

Most likely in Henderson or Southern Highlands near the practice building.

Nevada's Population Growth leads to Higher Debt

Nevada sets another record, this time it's Fastest Growing Credit Card Debt.

Which is considered, "Bad Debt"

Home Loans, Car Loans and Education are considered Good Debt.

The article also goes on to say,

"Nevada’s booming population is likely the biggest contributing factor for this growth"

 The graph below shows a breakdown of ALL Debt over the last 15 years.

It interesting how much larger School Loan debt is compared to Car and Credit Card Loans.

 If you know anybody who needs some Good Debt, a House, we can help with that.

A Strong Economy Leads to a Strong Housing Market and Consumer Spending

As always the most common question we get is,

"Can we sustain these Home Prices?"

Executives from Target, Wal-Mart, Home Depot, Macy's and Lowe's

All reference Strong Employment,  Rising Wages, Consumer Confidence

and the Economy for Boost in Consumer Spending.

As a Realtor, the fact that  Home Depot and Lowe's are doing so well,

tell us that Home Owners are Investing Money into their Homes.

Locally, the Unemployment Rate has fallen to 4.7% 

and Las Vegas has created 28,800 New Jobs in the last year.

https://www.gohansen.com/fine/real/estate/economy/custom/Economy

A Market Slowing Down, a Crash or a Seasonal Trend

This week in the Las Vegas Review Journal the Headline said,

"Las Vegas Median Home Prices 'Slowing down' this Summer"

I also found a Headline from California and Washington State

both with similar comments about their local Real Estate Markets.

So what is happening ?    Is the market turning ?     I wish I knew !!!

On the Graph below, you can easily see that in the past 2 years,

there has been a seasonal trend that starts in August and ends in April.

 We wont know if this is a Seasonal Trend or a Cool Down until next April.

 FYI...  of the approx 11,360 Homes on the Market,

1,450 or 12% are Tenant Occupied and 5,225 or 45% are Vacant.

California to Limit Water Usage to 55 Gallons per Person per Day

A month or so back I saw a bunch of Social Media Headlines like the ones below.

"It's now against the law in California to shower and do laundry on the same day."

" The penalty of up to $1,000 per day for excessive water use."

I was curious. What is actually happening in California?

So I looked it up and here's what I found...

Senate Bill 606 and Assembly Bill 1668, signed into law by Governor Brown on 31 May 2018

 New water conservation legislation in California will mandate water districts and 

municipalities enact water conservation measures statewide starting in 2022.

Establishing an indoor, per person water use goal of 55 gallons per day until 2025, 

52.5 gallons from 2025 to 2030 and 50 gallons beginning in 2030.

55 Gallons per Day per Person

FYI...  An average shower uses about 17 gallons of water 

Most clothes washers use 15 to 30 gallons of water per load 

Most toilets use 5 gallons a flush. Newer ones use 1.25 gallons

Brushing your teeth with the water running uses about 4 gallons 

Washing your hands / face with the water running uses about 4 gallons 

Washing dishes with the water running uses about 15 gallons in 5 minutes

Do the math. Does this seem realistic? 

Will this push even more people from Cali to Las Vegas?

Time will tell...