We just got back from a week long real estate conference in Las Vegas. We hadn’t been there in a while and I was quickly reminded of what man has built in the Nevada desert. It’s a strange combination of fantasy hotels, 5-Star restaurants or buffets, carnival rides, gambling, world-class productions and live entertainment, all with a slight undertone of sophisticated sleaze.
After being in class all day, we would choose from dozens of choices as to where to go for dinner. The first night we ate at a French diner out on the sidewalk of a Parisian Café, under a red awning. The next night, we decided to eat by an Italian canal, made to look like Venice, in a building made to look like we were outside. Next we chose an outside patio overlooking a replica of Lake Como in northern Italy, and lastly we ate at a great French diner in the Eiffel Tower about 10 floors up.
After dinner, we would walk the streets which can be as crowded as Manhattan, but instead of business suits, everyone is in shorts drinking foot long “yardsticks” – which is a Slurpee filled with alcohol. Every other person you pass is trying to hand you a card –usually advertising a vice of some sort. At the same time, there is a stream of helicopters flying around the strip on popular tours. We walked by high end retail stores, carnival rides, and gambling casinos trying to entice you inside. There is a Roller Coaster on the side of the New York – New York Hotel and a Ferris wheel that gives you some great views of Vegas at night; of course each of the 20 person cars has its own bar. If you are adventurous, you can grab a cab and see the old downtown area where the crowded Fremont Street is now covered in millions of lights which go off every hour to rock music.
If all of that is not enough to entertain you, the live shows are everywhere. Cirque Du Soleil has seven different shows they are running in different hotels, and while we were there, Britney Spears and a dozen other famous performers were headlining. On our last night, we saw Cirque Du Soleil’s Love, which is a tribute to the Beatles. I really don’t know how to describe it, but it’s a combination of technology, dance, rock music, gymnastics, acrobatics and a circus – an amazing feast for your eyes.
If you had the day off, which we didn’t, you could indulge in the many pool parties, rent a Ferrari and race it at a track, see the aquarium, shoot machine guns in the desert, swim with a Dolphin for $500 an hour, Ski on Mt Charleston, golf, rent a dune buggy, hike at Red Rock State Park, take a helicopter to the Grand Canyon, see one of many museums or sky dive indoors.
Oh, by the way, the real estate conference was great with lots of information, statistics and trends. Most markets around the country have homes increasing in value and have low vacancy rates for rentals. Real Estate markets are always local but it’s nice to see that most of the US has recovered from the last real estate recession and many markets have gained back all of the losses and more.
We learned that 10,000 baby boomers are retiring per day, which is a rate of 3.65 million a year. The benefactors are all the local markets, like ours, that attract retirees. These markets have seen faster growth in real estate values than other markets. The other interesting trend was how many homes are being built across the county vs. how many need to be built to fulfill demand. In Oregon, they projected that we would need approximately 25,000 home starts in 2016 to keep up with demand but only 2,500 were built, which is one tenth of what is needed.
The demand for rental housing is so strong it’s making it extremely difficult to rent in certain markets, including ours. Because of this, states are changing laws, or trying to change laws, that favor tenants over landlords. Oregon recently passed a law that requires landlords to give 90-day notice of any rent increase, increasing it from a 30 days’ notice. Currently, as you read this article, our State congress is trying to pass rent control laws that would limit certain rent increases.
Lastly, there was a lot of conversation about the direction of interest rates which everyone agreed is only going one direction, and that is up. It is however, a slow climb so we should still have low interest rates for the next couple of years.
Having sat in classes for hours, I did think of how lucky our local real estate market is. We’re doing a great job of attracting retirees, our rental rates don’t make sense so most renters want to buy, and we should have historically low interest rates for a few more years to come.