BluefoxToday blog : Vegas housing market getting demand help, from vulture funds

Vegas housing market getting demand help, from vulture funds

The numbers are still too high. Southern Nevada existing home inventory, according to the local MLS, continues to hover up there where no one wants to see it. It has been over 20,000 for months. Much of it has to do with the high mortgage foreclosure rates here that seem to be marching along unabated, month after month.

Bottom line is, demand is still too weak. Low home loan interest rates have been a big help and the various government incentives are also weighing positively in. But that's not enough. To change the real estate market dynamics in Las Vegas more qualified buyers are needed.

Call in the vulture funds. The name actually is a bit harsh, for these are just investors, or groups of them, who are taking advantage of favorable business conditions. Anyhow, more of them are coming to Las Vegas now to scout opportunities and providing additional purchasing power.

In most cases they close deals with cash, so no long waits to get mortgage applications processed. And they often scoop up a nice package of residences, not just one or two, making serious dents into the inventory in a short period of time. Many of them are set to rent out the acquired properties for multiple years and then sell them ideally for handsome profit. This way vacant homes in distressed neighborhoods get new occupants and are then generally looked after properly.   

Of course, these real estate investors are in the habit of tendering rock bottom offers that can yank down community price structures, at least initially. Still, it's better to have real ownership with long-term interest than a bank REO status, as lenders have the reputation of being weak in maintaining foreclosed homes. And most of all, they do create demand and that's what Southern Nevada's housing right now sorely needs.



Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst - syndicated mortgage, housing and property management blog
My cell: 702-499-1006

Comment balloon 8 commentsEsko Kiuru • April 21 2009 04:42PM


Esko, I guess if one is willing to sell at any price the vulture funds have their place but prices sure do take a hit.

Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) almost 9 years ago

Esko, Prices are taking a hit anyway--especially with short sales and foreclosures...I predict these type of investors will soon be everywhere (places where prices are extremely low) and will be buyng in bulk in the not too distant future....

Posted by Amanda Wilson, Real Estate Advisor (EWM International Realtors, Inc.) almost 9 years ago

Esko, I like your positive news blogs better .......... LOL

Yep inventory still does to be higher then we would like around here as well, but nothing close to you guys.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 9 years ago


These investors do drag prices even lower, in the short term.

Posted by Esko Kiuru almost 9 years ago


They are a necessary part of the marketplace and help bring balance to it.

Posted by Esko Kiuru almost 9 years ago


I'm looking for good news under every rock.

Posted by Esko Kiuru almost 9 years ago

Ekso another value, that investors provide when they bring down the price real estate, is an increase in the number of people who can again qualify for a home purchase - again.  I think that is always a good thing - The American Dream without government cash (our tax dollars).

Posted by Jay M. Johnson (JMJ Consulting Group) almost 9 years ago


Investors definitely bring the marketplace another needed dimension.

Posted by Esko Kiuru almost 9 years ago