Our Spin on Vegas
By Tracy Kaye & Marie Fuentes

Saturday, May 31, 2014

Let Me Shock You!

A few days ago I ran across an article about the average home price and income needed to purchase a home in San Francisco, my partner Marie's, neck of the woods. She was sticker shocked. So it made me think, "let me shock everyone".

Consequently, I grabbed the data from the Census Bureau on the 50 largest metropolitan areas, and the data from the National Association of Realtors, on the average home prices in those cities for the 1st quarter of this year.

To get the income needed for each city, I ran the calculations for a 20% down, 30 year, conventional loan using Friday's interest rate of 4.14% retrieved from MortgageCalculator.org

The results are below, check your city out.



Metropolitan Area Home Price Salary Required Population
Atlanta, GA $141,900 $23,621 5,286,728
Austin, TX $226,300 $37,671 1,716,289
Baltimore, MD $224,500 $37,371 2,710,489
Birmingham, AL $153,000 $25,469 1,128,047
Boston, MA $363,200 $60,460 4,552,402
Buffalo, NY $122,000 $20,309 1,135,509
Charlotte, NC $167,500 $27,883 2,217,012
Chicago, IL $176,900 $29,448 9,461,105
Cincinnati, OH $121,700 $20,259 2,114,580
Cleveland, OH $102,100 $16,996 2,077,240
Columbus, OH $135,200 $22,506 1,901,974
Dallas, TX $174,800 $29,098 6,426,214
Denver, CO $288,400 $48,008 2,543,482
Detroit, MI N/A N/A 4,296,250
Hartford, CT $209,300 $34,841 1,212,381
Houston, TX $184,600 $30,729 5,920,416
Indianapolis, IN $132,900 $22,123 1,887,877
Jacksonville, FL $165,000 $27,467 1,345,596
Kansas City, MO $140,800 $23,438 2,009,342
Las Vegas, NV $191,600 $31,895 1,951,269
Los Angeles, CA $406,200 $67,618 12,828,837
Louisville, KY $131,100 $21,824 1,235,708
Memphis, TN $125,900 $20,958 1,324,829
Miami, FL $259,000 $43,114 5,564,635
Milwaukee, WI $186,000 $30,962 1,555,908
Minneapolis, MN $188,200 $31,329 3,348,859
Nashville, TN $168,000 $27,966 1,670,890
New Orleans, LA $157,600 $26,235 1,189,866
New York, NY $388,900 $64,738 19,567,410
Oklahoma City, OK $152,400 $25,369 1,252,987
Orlando, FL $178,000 $29,631 2,134,411
Philadelphia, PA $201,800 $33,593 5,965,343
Phoenix, AZ $194,300 $32,344 4,192,887
Pittsburgh, PA N/A N/A 2,356,285
Portland, OR $271,900 $45,262 2,226,009
Providence, RI $217,100 $36,139 1,600,852
Raleigh, NC $193,200 $32,161 1,130,490
Richmond, VA $202,400 $33,692 1,208,101
Riverside, CA $266,800 $44,413 4,224,851
Sacramento, CA $255,800 $42,582 2,149,127
Salt Lake City, UT $233,153 $38,812 1,087,873
San Antonio, TX $169,300 $28,182 2,142,508
San Diego, CA $483,000 $80,402 3,095,313
San Francisco, CA $679,800 $113,163 4,335,391
San Jose, CA $808,000 $134,503 1,836,911
Seattle, WA $339,900 $56,581 3,439,809
St. Louis, MO N/A N/A 2,787,701
Tampa, FL $145,000 $24,137 2,783,243
Virginia Beach, VA $175,000 $29,131 1,676,822
Washington, DC $358,900 $59,744 5,636,232
If you're looking to buy or sell a home anywhere in the world, we got you covered, please call us first!

Monday, May 26, 2014

Dezincify!

In 1995 manufacturer IPEX introduced Kitec to the world of plumbing. From that point through 2005 it was regarded as the darling in plumbing materials for its ease in use, efficiency, and cost effectiveness. Not until continued use, was it discovered that it had a major flaw… it didn’t work well with water.

Kitec plumbing consists of plastic-coated aluminum pipes and brass fittings, with the brass fittings the subject of a class action lawsuit certified by the Nevada District Court on October 16, 2006, alleging the brass fittings are defective because they dezincify when exposed to water.

In the research for this article I looked up the words brass, and dezincify, and found...
•      Brass: any of various metal alloys consisting mainly of copper and zinc.
•      Dezincify: To deprive of, or free from, zinc.

This led me to research “what corrodes zinc” and found… “The behavior of zinc in a specific atmospheric environment can be predicted within reasonable limits. However, it is generally accepted that the corrosion rate of zinc is low; it ranges from 0.13 µm/yr in dry rural atmospheres to 0.013 mm/yr in more moist industrial atmospheres.”

Now I don’t know what a µm (yacometer), or mm (micrometer) is, but this doesn’t seem like rocket science to me, it’s simply “Elementary, My Dear Watson.”  Using the method of compounding, it’s safe to say there’s a lot of dezincifying going on after 9 years.

What the hell? Did IPEX, the builders, and the plumbers not know that brass is made of copper and zinc?  And, when exposed to moist conditions, brass dezincifies? Or, were they just looking for money to flow to them, seeking the highest level, while the water flowing through their pipes, sought the consumers' lowest level, i.e. their basement.

This "dezincifying" caused a plaque like substance from the corrosion of the zinc to build up in the pipes and fittings, causing low water pressure at the faucets, and, additional pressure on the weaker "dezincified" fittings.

Therefore, it is easy for me to say the decision of the Court is just, in that IPEX, the builders, and the plumbers have been ordered to pay the homeowners the cost of remediation. (They should have looked up the words brass, zinc, and copper, and what corrodes them prior to installing them.)

Settlement began in 2007, and the initial deadline to make a claim on the money was to end on March 31st, 2012.

Not too long ago, I knew little of the Kitec issue, other than if your home was built in 1995 through 2004* there is a reasonable probability your home was built using Kitec fittings. And, a class member may claim monies to remediate the issue from the manufacturer, plumbers, or builders, and, that the first deadline of March 31st, 2012 was extended to January 29th, 2013 to make a claim.

Although they made great attempts to notify the homeowners that are due a claim, the homeowners have not all responded; leaving a substantial amount of money on the table after the January 29th, 2013 deadline.

Not too long ago my Broker, Aldo, blasted an email to all of our agents that another extension has been granted by the Court stating, “all prior Kitec claim deadlines have been lifted by Court order. Class members have 3 years to file claims for the available settlement relief, until approximately March 2017, or, until the available funds have been exhausted.”

Since this email I have spoken to another Realtor, a friend of mine, at another large company.  She was not aware of this extension. Once again, I was able to show her the benefits of working with Berkshire Hathaway HomeServices® Nevada Properties, and what sets us apart from other agents in our industry.

Currently, any claim member who is subject to this claim sells their home thinking they have missed the deadline, is grossly uninformed. This is why it is critical to not just hire a Realtor®, but to hire an experienced, knowledgeable, and trusted Realtor®, like myself, who has the support, and accountability behind the name Berkshire Hathaway HomeServices® Nevada Properties.

This is all good news for homeowners that haven’t made a claim yet, and for Realtors® that know how to leverage this information. Fortunately, you, my reader, can see the importance of both.

*Kitec was still in use after 2004, although it is now believed it was not used extensively in Clark County beyond 2004.

Wednesday, May 21, 2014

Roaming Gnomes, Smell All the Roses!

This man said to me yesterday “I’m never going to buy a home again, I’ll just keep renting.” So I asked him “are you aware of the disadvantages this poses for you?”  Suddenly he became hard of hearing.

For some there's an advantage not to own, like the roaming Gnome in the video below. But for the rest of us the reality is, if you don’t own a home free and clear, then you are paying a mortgage, paying a landlord, living on the cuff with a friend or family, in some involuntary living arrangement, or, you are surviving the elements. Other than the people who have some sort of constraint (mental, physical, financial, or legal), the rest should own a home.




I began searching for statistics to help me write this blog and found this excerpt from an article by Eric Belsky, from the Joint Center for Housing Studies at Harvard University, and it states:

“Leaving aside the question of optimal portfolio diversification of risk to simplify matters, the choice to own or rent can be reduced to an elegant user-cost equation that captures all the variables that influence the costs of owning that must be toted up before concluding whether owning or renting is better financially. It includes house price appreciation (or depreciation), the opportunity cost of making a down payment (the return on an alternative investment of the same amount over the same holding period), the cost of capital adjusted for the value deductions of mortgage interest, the amount paid in property taxes adjusted for the value of property tax deductions, the amount spent to offset the depreciation of the property through maintenance and repair and replacement of worn out systems, other operating costs, the costs of any insurances on the home or mortgage net of any deduction, transaction costs to buy and sell the home, and the outstanding mortgage balance at the end of the holding period. More sophisticated versions may take into account mortgage refinancing and its impact on the ultimate costs of owning as well.”

OMG… What did he just say? Wading through his hyperbole gave me a headache. I think what he wanted to say is… If you rent, you lose the benefits of appreciation, depreciation, tax benefits, return on investment, or even more sophisticated impacts of owning. Even if I missed something else he was trying to convey, these are huge benefits to lose.

He made no mention of lifestyle issues like, it’s a good, safer place to grow a family, with more control over your living space, providing a nicer living arrangement and pride of ownership. Or, the mention of financial issues like, it's a good vehicle for your financial health, providing a retirement instrument, with monthly mortgage payments (savings deposits) until the loan is paid off... WHILE RENT DOES NOT!

Then there are those who believe themselves appropriate not to own due to losses they have incurred during ownership, without considering all the money they will lose while renting. Or those "realists" who think the world's economy is going to hell in a hand basket, they too would be better off owning then renting when it comes time to pay the piper.

I’m certain I've missed something, however, you get the point. Owning makes much more sense than renting, especially while interest rates are low, and payments are considerably less.

If you are considering owning a home please consider The Tracy Kaye Group in helping you achieve your goal. You can check us out by clicking on the links to the right or by going to www.TracyKaye.com

Saturday, May 17, 2014

You Crrrrraaaazzzzy in the Coconut!

Today’s topic is twofold. First the new name of my brokerage, and second, the #1 Sin of Selling.

April 29th, was the end of a 35 year run for the name Americana Group Realtors, yet only to be replaced by an even longer name, and it’s a doozy… Berkshire Hathaway HomeServices® Nevada Properties.  This is the new name of the brokerage I am now contracting for, and I said it’s a doozy, not because of how many letters are in the name, but what it stands for.



Words like: amazing, tremendous, outstanding, incredible, fantastic, and whopping slipped off my fingers and onto this page, but for now let’s just say Berkshire Hathaway HomeServices® Nevada Properties is… Good to Know! ™

I couldn’t be happier about this transition, with one exception, changing the name on everything we have. It’s been quite the task that led me to update some of my publications, like “The 10 Sins of Selling”(click here to view).  Which leads me into the next subject, the #1 Sin of Selling, and it too is a doozy.

Drum roll please… the number one sin in selling is “NOT HIRING A REALTOR®”. But keep reading, there’s much more to this.

This is such a big “SIN” that statistics from the National Association of Realtors® (click here to view), indicate in 2012 the average For Sale by Owner (FSBO) netted $27,200 or 13.5% less than the average agent represented transaction. SHUT THE FRONT DOOR! That's roughly the same 13% loss I’ve been touting for the last 15 years. Have we not learned anything, or is history just going to keep repeating itself. 

Are we, the Realtor® community to blame for not educating the FSBO's well enough to know better, or are they just that stubborn? 

Not only do you need to hire a Realtor®, you need to hire an experienced,  knowledgeable, full service Realtor® supported by, and accountable to, a real estate firm that can provide a tremendous amount of wisdom, protection, advice, and credibility to the transaction, like the one in discussion in my first topic. (See how well these two topics fit together?)

Here's what can happen when you don't hire a full service Realtor®:

I cannot ethically tell you the full name of the flat fee, limited service Realtor®/Broker  I am using in this example, but his first name is Donald, and if you let him sell your home, you might as well take the commission you are trying to save and plunkett down the toilet; then bitch to Congress for the loss.

From January 1st, 2013 through December 31st, 2013 Donald sold 75 homes for an average sales price of $221,035, per home. The average net sales price after Donald’s $299 flat fee, and a 3% co-op commission for the buyer's Realtor® is $214,104.*

During this same period BHHS Nevada Properties sold 6,039 homes for an average sales price of $231,813 per home. The average net sales price after a BAC fee of $350 and a 6% commission for BHHS Nevada Properties is $217,553.*

The difference in the net sale price between the two is a staggering $3,449, and I do mean staggering, because Donald’s sellers did all the work themselves, including take on the liability for errors and omissions before, during, and after the sale, which run rampant in “do it yourself” transactions. Now add their time and effort, and the cost of any therapy and counseling, and you’d find the true cost really is staggering.

So let’s do the math… You can sell your home yourself, do all the work, pay for all your own advertising, take on all the liability, and do this on average for 13.5% more than an agent can do it for you, or you can hire a limited service agent, and do all the above for about a 1.59% more than a full service agent can do it for you, or, you can just hire a full service Realtor®, and sleep easy.

Here is just some of what you would get from an award winning, full time, full service, experienced, knowledgeable, and trusted Realtor®, like me, who has the support, and accountability behind the name Berkshire Hathaway HomeServices® Nevada Properties.



Therefore, if you need to sell your home, do yourself and your pocket book a favor and hire the right Realtor®, or get yourself a Frontier Psychiatrist you crazy coconut you; BTW the crazy coconuts, I've worked with, prefer me. (Check me out)




Like I said we’re Good to Know! ™

*Information comes from the GLVAR and is deemed to be reliable but is not guaranteed.

Thursday, May 15, 2014

It’s Come To A Screeching Halt… Or Has It?

Talking with one of my friends the other day, he mentioned how he heard on the news that the housing recovery has come to a screeching halt. He claimed that they (the media) are blaming it on climbing mortgage interest rates, and a lack of consumer confidence. I know that’s not true about interest rates, (click here for historical rates) but what about consumer confidence? I wasn’t sure myself from all the things I’ve heard as well, so off I went to verify.

I don’t have the ability to verify a lack of consumer confidence over all, however I do have the ability to verify consumer confidence in real estate, specifically real estate in Clark County, Nevada, and if there’s one thing I do know, and have… it’s the knowledge, and data to crunch those numbers.

Here they are: From May 8th, 2008, around the beginning of the so called “housing recovery”, through May 7th, 2014, six full years of data, there has been 262,256 resale single family residences sold in Clark County through the Multiple Listing Service. This includes single family homes, condos, townhomes, manufactured homes, and high rise condos.  That divided by 365 days a year equals an average of 32,782 homes sold per year, or 89.81 homes sold per day.

In the last month from April 8th, 2014 through May 7th, 2014 (the last full day of propagated sales) there were 3,338 single family residences sold, or 111.26 homes sold per day. This is not a "screeching halt" or “a lack of consumer confidence”, it's more like "burning rubber", and positive consumer confidence.

Now, in fairness to the media, and my friend, according to the latest Existing Home Sales Report, (click here for report) from the National Association of Realtors, annualized sales in March stand at 4.59 million, down from 4.96 million the same time last year, a 7.5% decline. Is this a lack of consumer confidence? Maybe, but consider the slowest reporting months of the year begin in November and end in April. Is this a lack of confidence or seasonal adjustments?

Lawrence Yun, NAR chief economist, said he expects some improvement in the months ahead. “With ongoing job creation and some weather delayed shopping activity, home sales should pick up, especially if inventory continues to improve and mortgage interest rates rise only modestly.” I don't see a lack of consumer confidence in Mr. Yun's outlook... Do you?

So, if you are considering whether or not to purchase or sell a home here in Clark County, don't let the news scare you. There are purchasers in the market, and they are BUYING… to the tune of 111 homes a day right now! 

In conclusion, what I have done is bring the truth to my friend, and hopefully to you!

Tuesday, May 13, 2014

A Great Time to Sell!

The ONLY reason price goes up or down in any market is caused by “Supply and Demand”. If there are a lot of homes on the market and few buyers, then price comes down, or if there are a lot of buyers in the market and few sellers, then price goes up. Most people have seen this first hand in the last 10 years. Although “Supply and Demand” is the only reason price goes up or down, it is only fair to mention that there are many factors that contribute to both Supply and Demand increasing or decreasing:  Low interest rates, income growth, job growth, etc. to mention a few.

A couple weeks ago I read this article from the National Association of Realtors and according to this article, “Total housing inventory at the end of March rose 4.7 percent to 1.99 million existing homes available for sale, which represents a 5.2-month supply at the current sales pace, up from 5.0 months in February. Unsold inventory is 3.1 percent above a year ago, when there was a 4.7-month supply.” What this suggests is that we have roughly a 5 month supply of homes on the market.


Here in the Greater Las Vegas Metropolitan Area, we had 3263 sales in the month of April, and as of the time of this writing on May 12, 2014 we have 9830 available properties for sale, this includes condominiums, townhomes, single family homes, high rise condos, and manufactured homes. What this survey concludes is that we have a 3 month supply of homes on the market, far less than the national average of supply.


Just looking at this survey suggests that price should continue to move up. However, I just found this recent survey on Lending Tree that was written in back in January, and the reason for me writing my very first blog. According to this study they say that 71% of homeowners are considering selling in 2014.


What all this suggests to me is that a seller putting their home on the market now makes a lot of sense, they’ll avoid future competition, and with our still limited inventory (3 months,) sellers will be in a great position to get the best possible price for their home.



And if you’re looking to gain more appreciation by waiting for a higher price, beware of trying to catch the falling knife.