How do people afford these? Are wages that good across the board? Is it a city of self-employed entrepreneurs? In contrast with other metro areas, it appears that the salaries of professionals (lawyers, in this case) are far behind the curve of affording reasonable homes. Is working in casinos that lucrative?
Ryan - I'm confused. Did you mean to post a specific link to some home prices? I don't know what you're looking at. In any event, this may not be directly on point, but check out this web site. http://www.homefair.com/homefair/calc/salcalc.html It is a calculator (developing by the National Assn of Realtors, I think) which allows you to estimate what you would need to be paid in a new location to equate to the standard of living in your present one. I just stepped through for moving from Boston to Las Vegas. The results were that if one earns $100,000 in Boston, one would need only $70,509 in LV to be equivilant. Try it yourself with your own specifics.
Also take a look at this table. http://www.realtor.org/Research.nsf/files/REL05Q4T.pdf/$FILE/REL05Q4T.pdf It shows the median home price in the Boston metro area as $414K, versus $304.7K in LV. Pretty close to the same ratio the salary calculator produces. Other things that go into the equation are zero state income taxes, and property taxes that are dramatically lower than those in the Northeast.
Bob - I was just looking through home listings, not a particular index. That salary/COL calculator is interesting though - is that using recent stats? I still have a hard time believing the equivalent costs are so low, although I realize the benefit of no state IT. Isn't the general multiplier for max mortgage 3x salary? I suppose I'm trying to figure out what we're getting into in LV... as you go through the recruiting/hiring process you try and figure out what the benefits and tradeoffs of certain areas are. There are big cities like NYC, DC, LA, SF, where starting salaries are $125-145k and you know you're not getting a house. There are other places like Chicago, Dallas, Houston, Denver, Minneapolis, etc. that still pay $110-125k and you know you can get something. Especially Dallas, where $250k goes a long way. Vegas law firms are $70-90k, but their housing prices are higher, although not as bad as Honolulu where pay is the same as Vegas (actually less) but houses are $590k. I suppose in my head I thought a house would be easier to come by in Vegas compared to other metros but it might take a while longer. Hopefully that 8-10% RE deflation hits (hopefully for my side, probably not the dreams of those who already own!). Another difficulty that might be hard to translate is that $1000+/mo grad school debt doesn't get adjusted by cost of living. On the plus side, the law school does offer debt forgiveness on an adjusted scale if you take a job that is "low income," meaning under $80k. Yes, I realize the irony of that number. But that's what we have to deal with when the law school OPENLY justifies annual tuition increases that are several times inflation on the fact that average starting salaries are what they are. And when starting salaries at law firms go up, and billable hour requirements go up, and bonuses go down, tuition is raised because we're supposedly getting more money. When I applied in 02/03 it was $28k, I started at $29.8k, and now it's $34.5k. I'm not complaining, just trying to figure out what's going on in the area so my expectations are in line. As someone told me, 'there is no such thing as disappointment [with a choice], only unstated or misunderstood expectations.'
Here is another calculator, this one oriented toward what kind of home you can "afford": http://www.homestore.com/HomeFinance/Calculators/mortgagequalifier.asp?type=to&poe=homefair I played with it a little and the results seemed somewhat consistent with your 3x ratio. Note that on many of the variables they ask for, the default numbers seem quite high for LV. For example, the real estate taxes on our home are only about 0.33% of its value. The closing costs look high, too. In my personal experience, I don't see many people buying a house right after graduation, even from law school. This is especially true if (as you seem to imply) there will be only one earner in the family. I find it a lot more common for both to be working, and saving toward home purchase. (Maybe buying a condo along the way as a "stepping stone".) But as I said, this is only what I've observed myself, and I'm in no way qualified to be a financial advisor.
Which drives up the price of houses in NV to the point where regular wage-earning residents can't afford them .
That's exactly what happened in Hawaii: in the early 90's they had an explosion of home prices because Japanese were buying up land all over the islands. Then their speculated financial markets crashed at home in the late 90's but left Hawaii real estate beyond the reach of island residents.
People afford them for by taking 30 year mortgages with only paying interest for a long time....also known as the California Financing Plan. Mark
Didnt notice the date on this thread until you said this. Prophetic indeed. http://www.8newsnow.com/story/5558987/new-ghost-towns-sprout-up-in-las-vegas
Okay, so heres the deal, Im fed up in the UK now, and may sell up.... My idea would be to downgrade here, buy something in Vegas, and try to find a job there, temporary at first, permanent once I could get a visa sorted. I like to think Im a good facilitator, having spent years running my own business very successfully here (as a mortgage/insurance broker), but the qualifications may not be transferable. Will need to find a proper job, maybe something that the visa people would like - ideas people???????????? Im accurate, hard working, reasonably intelligent, and can turn my hand to most things (my dad is a builder and property developer, so from age 8, I was working with him and learning how to use my hands to earn money, using the brain came later, and I like to think I can do most things once shown how!)
That's why the market sucks. It's that and it's basically impossible to get a home loan in Nevada. 60% of all sales are cash. A lot of it is coming from outside Nevada and even the States. LV honestly is a bargain now. You can't build a home for the price you can buy one. That can't last forever. It boils down to this: It's the economy, stupid.
You should look into an investor visa. Jobs are hard to come by right now; if you're looking for a job you might want to come out for a bit and see if there's anything that would qualify for a visa. Problem is that there are relatively few mortgages being written right now, and everyone and their dog is in mortgages, realtors and insurance here.
Sounds like an idea. I was hoping to try something different, yo know, maybe work for someone rather than be self employed, get a pay check every month, a little company at the water cooler........
Can you do that (as in would you, after being self employed)? Funny enough, when things went crappy here in Vegas after the 2008 crash, I applied for jobs with big international companies in the UK (and Australia) for several months with no response from any of them.
I think I could, if it was the right job, and the firm had my respect. Although I am self employed, technically I work for my clients, so I take great pride in doing the best job I can for each, bit like being employed, and at least I could count on a paycheck again till I get confident with life in the US, and if I wanted, I could go self employed again!!! Im pretty sure a firm could use me as a go-to guy for most things - staffing issues, planning strategy, accounts if really necessary, even physical stuff!! Maybe something in a casino involving management of resource or even security!
