Mesquite Insights

For the past several weeks I have been writing a weekly real estate article (Market Matters) for our local paper, The Desert Valley Times.  My main focus has been to provide the reader with information about our local real estate market - especially as it relates to resale properties.

From the resale side of the coin, sales continue to be slow.  Buyers appear to be searching for the very best buys, and pricing has become a very critical element to many sales.  And the truth is that many of the best buys and best pricing are not currently with resale properties.

From January 1 through mid April, as reported in the MLS, there have only been 6 sales of existing homes priced above $300,000.  But for the same time period noted, there have been 19 new home sales reported in the MLS for homes priced above $300,000.  And it was recently reported that one local developer has sold over 400 new homes since last June! 

If you are considering relocating or investing in Mesquite, rest assured that our real estate market is not dead!  New homes and resale properties, when priced for today's market conditions, are selling.

It is more important than ever for today's real estate buyers to be very knowledgeable about market conditions before making a purchase.  For more detailed information about Mesquite's real estate market, or to get answers to your real estate questions, please contact me via email at:  jerry@mesquitegmac.com  or by phone:  702-506-7498.     

Despite cancelling an agreement to obtain water from land developers in neighboring Lincoln County (2500 acre feet of precious water needed to operate the turbines at the planned Toquop Coal Fired Power Plant) Sithe Global says they are still moving forward with their plans for the power plant and are looking for other water resources.

For those who oppose the power plant, this is good news.  It is another delay - one that might be more difficult to overcome.  The Virgin Valley Water District will not provide the water and neither will the Southern Nevada Water Authority.  There are very few alternatives.  While Sithe Global might go back to the land developers to generate a new agreement, the water that was offered in the original agreement was actually water the developers hoped to receive as their next allotment from the State of Nevada - the water was not a secured source.

One group, Defend our Desert, formed to fight Toquop.  But now that the public testimony and hearings have been completed, the group appears to be losing focus.  While it is still active, it is looking for other means to get their message across and to rejuvinate their members. 

A community meeting was held last week in St. George concerning the proposed Toquop coal fired power plant.  The city council came out opposed to the project as did the Utah Department of Environmental Quality.  When the project was first proposed, there was little opposition from the folks in Utah.  But once more information was released such as: diesel as the back-up fuel and air pollution estimates, opposition quickly grew. 

To have a sufficient quantity of back-up fuel available, the project is proposing a 1 million gallon+ diesel storage facility.  The amount of fuel raises serious concerns as it would make the project a potential terrorist target.  Furthermore, the project, and the fuel tanks, would be on an existing earthquake fault.  Both factors should cause the regulating community to reconsider, or deny, the request for the project.

And no-one wants any degredation of our clean air.  That is one of the natural resources that draws people to this part of the country - not only to visit, but to live and to call home.  While Mesquite and Souther Utah have a tainted past as a result of the above ground nuclear testing conducted in the desert outside of Las Vegas, there is a strong desire to keep history from repeating itself. 

Is it possible that the strong and growing opposition to the Toquop power plant will influence the decision makers?  Visit my blog regularly to check for updates on this important issue.

It is not a well known matter, but Nevada has the 3rd highest number of earthquakes of all the 50 states.  Nevada is slowly being pulled apart.  The mountain ranges are separating - widening the valleys and pulling some of the landscape to the SW.  Near Mesquite are the Virgin Mountains.  Granite peaks towering up to nearly 10,000 ft.  But there are portions of the granite range that are now located SW of Las Vegas.  Over millions of years the land has spread 80 miles or more.

There are a number of small earthquakes around the state every day.  But very recently there was a large earthquake in NE Nevada.  Registering over 6.0, it was violent but caused little damage.  Events such as this remind everyone why Nevada has a building code that includes earthquake provisions.

If you are planning a trip to Mesquite in the near future, you can monitor Mesquite's enticing weather forecasts at www.mesquiteweather.com  (bring your shorts and sun tan lotion - spring is here and summer is coming) and from there you will find a link to the USGS earthquake site to find more information on earthquakes in NV, CA or elsewhere. 

Is a new power plant in Mesquite's future?  When I bought a home in Mesquite almost 10 years ago, there was a rumor floating about regarding the construction of a gas-fired power plant near Mesquite.  It was said that the power would be used in Mesquite and that there would be 100s of jobs.

Not too far back, it became evident that a power plant was very likely going to be built on land in Lincoln County about 10 miles from Mesquite.  And the proposal was still for the facility to be gas-fired.  But somewhere along the way, the fuel source changed to coal.  And now we are working through a very emotionally charged controversy about the matter.

Let's look at some of the facts behind the controversy and the proposed plant.  Coal would be mined in Wyoming and hauled to the plant site by train.  And the plant would burn plenty of coal - over 100 rail cars per day!  A rail line would be constructed to the site as would new roads.  Not only do power plants require considerable fuel, they also require a considerable amount of water to run steam generators.  And water is a precious resource in the drought stricken desert SW.

Besides the issue of water, the most controversial aspect has been the emissions and waste material generated by the power plant.  Air emissions include particulates, mercury, sulfur compounds, and radiation.  While the plant would be designed to standards that would meet the air requirements for Mesquite's airshed, it is obvious that the impact would be "visible."   

It may be difficult to identify any benefit to Mesquite from the proposed power plant.  Not only would the power be dumped into the power grid (mostly to help satisfy the energy demand in California), but any tax revenue generated would stay in Lincoln County.  To many residents, the power plant would be bad for Mesquite.  It is amazing that not all the "players" in Mesquite have come out in opposition - "players" that include all the developers such as Pulte-DelWebb, the Chamber of Commerce, Mesa View Hospital and all other local businesses.  It would seem that Mesquite has much to lose and nothing to gain!

To understand the past, and to have an idea of where we are headed, we must look carefully at the records.

Begin with information from the Mesquite Listing Service (MLS).  It provides a valuable service to many people including: Realtors®, clients, lenders, and appraisers. Very useful information is available regarding active listings and historical data which can provide insight to trends in the market. However, the information contained in the MLS is only a subset of the total Mesquite real estate market activity. Specifically excluded may be information about owner sales (FSBO) and new construction sales by certain builder/developers.

For example, consider 2007 sales information. The MLS reports 235 sales of single family homes during the year of which 108 were new homes. Among the new home sales were 18 from Sun City Mesquite. Though unconfirmed, we have been told that sales at Sun City Mesquite exceeded 300 new homes – a huge disparity from the 18 homes noted in the MLS records.

But, as previously noted, the MLS data can provide a valuable insight into market trends (in particular, home sales and prices).

Sales of existing homes fell throughout the year – averaging over 13 homes per month through June, and then falling to an average of only 8 homes per month during the last 6 months of the year. At the same time, reported sales of new homes held very steady averaging 9 home sales per month. If all the new home sales from Sun City Mesquite could be included in the MLS, it is very likely that we would find a substantial increase in new home sales during the final 6 months of 2007. But what might contribute to the decline of existing home sales and an increase in sales of new homes?

Real estate prices are very much influenced by supply and demand. Some people have recognized this. With the downturn in the market, they have been the price leaders for local real estate (lower prices – increased demand - and their properties have sold).  Keep in mind that buyers will always attracted to the “best” buys.

Throughout 2007, the average selling price of new homes trended downward from over $185 per sq ft to nearly $149 per sq ft in November/December. However, the selling price of existing homes remained in a narrow range – recently near $175 per sq ft.  One should question why the average price a home on the MLS is now over $200 per sq ft, when many homes have recently sold for under $150 per sq ft.  Could it be that pricing has been a significant contributor to the slowdown of existing home sales in Mesquite?

But don't be discouraged!  Don't be concerned about the list price and worry less about insulting the seller.  Make your offer - and make it less than the asking price - possibly substantially less!  Only when buyers and sellers negotiate on pricing will we know what the true market value is!  Happy buying!

In today's market place, businesses must plan and adapt to the changes that the future will bring, and the Eureka is doing just that.  They are doing what must be done to meet the competition head-on - including the slow-moving Solstice Project. 

Eureka's expansion of the casino, building improvements and changes to the buffet are nearing completion.  If you haven't seen it recently, stop by and take a look.  You will be impressed.  And the casino looks great.  Thousands of additional square feet were added to the gaming area bringing more slots and video poker machines and....better ventilation.  And the facelift to the exterior of the building makes the Eureka even more attractive!

Future expansion possibilities include a new hotel tower, an RV park, specialty shopping, and perhaps bungalows for special guests.  It won't happen overnight, but when it has been completed, the Eureka stands to be the very best casino in town.  Look out Randy Black and Solstice!

Mesquite is proud to be a golf resort and destination get-away.  There are 6 championship courses to play (The Palmer and Canyons Courses at The Oasis GC, the popular Wolf Creek GC, Falcon Ridge GC, Casa Blanca GC and the Palms.)  In addition, there is a neighborhood course (Coyote Willows) that offers several holes of challenging golf but on a shorter layout.  Coming soon will be another championship GC at Sun City Mesquite - due to open in 2009.

And Mesquite popularity grows because of tremendous publicity.  The Big Break filmed last year during the heat of the summer had a huge audience on The Golf Channel, and many of those fans have traveled to Mesquite to experience the challenges of the Palmer GC.  And the Long Drivers have been coming to Mesquite annually for the Long Drive competitions in the spring and fall.  The fall Championship is held at the Palms GC and is telecast on ESPN on Christmas day.  Be sure to watch!

For those who want to experience our great golfing, there are several options.....many golf packages are available that include hotel room and golfing at one or more local courses, and these continue to be very popular.  You decide where to stay and play!  For those who will spend more time in Mesquite, consider a Mesquite Golf Pass.  The 2008 golf pass can be purchased for $115 and offers the holder 5 free rounds of golf (dates may be restricted) and substantially discounted rates at our local courses (except Wolf Creek and Coyote Willows).  And most recently, a limited number of privately owned condominiums have become available for short-term rentals (many condo owners will also arrange for tee times and other activities if asked).

For more information about Mesquite Golfing, there are links to the local golf courses on my web site.  Also, feel free to contact me for more information about the Mesquite Golf Pass or various lodging options. 

New Year's Resolution:  Always Great Golfing!

We are constantly bombarded with numbers - social security, PIN, phone, address, speed limit, price per gallon, amount due, income, taxes, and on and on......Numbers can be misused and misunderstood, and the information they impart changes over time.  Look at trends.  They are most important.  The key is to understand the numbers - to interpret what they mean and understand how they can and will influence your decision making!

This holds true especially for Real Estate.  Use the numbers to your advantage.  For instance: January 1, 2008 finds 363 properties (single family homes, townhomes, and condos) on the Mesquite MLS, but this includes 40 new single family homes and 16 new townhomes and condos.  So you can see that the number of resale properties is actually only 307.

Today, lets look specifically at Townhomes and Condos.  There are 172 properties available - including 16 newly constructed properties.  The average list price for a resale townhome/condo is $195,285 ($158 per sq ft).  For new construction, the average list price is $256,619 (also $158 per sq ft).

In 2007, 188 townhomes/condos were sold of which 54 units (28%) were new construction.  The average selling price was $191,381 ($161 per sq ft). 

But let's see what the trend is in the market and let's look at the last 6 months of 2007.  During this period, only 52 townhomes/condos were sold and only 5 were new construction (less than 10%).  The average selling price was $181,570 ($150 per sq ft).    

Now let's look at the last month.  There have been 3 townhomes/condos sold - all were resales.  The average selling price was $173,933 ($129 per sq ft). 

The trend for townhomes/condos - fewer sales (and substantially fewer sales of new construction) - and lower sales prices - down from an average of $161 per sq ft to most recently $129 per sq ft.  Realizing that the average list price for townhomes/condos on the MLS is near $158 per sq ft., this means that many properties are overpriced for today's real estate market - by almost 20%. 

When you find a property that fits your needs, wants and desires - make an offer.  Because many properties are overpriced for today's market, don't let the list price limit you on the properties that you should consider and can afford!  In today's market, you must do your homework!  Work with your agent to determine the true market value of the property - consider features, location, condition, time on the market, market trends and of course recent sales of similar properties.  You must understand where the market has been and where it is going.  Then make your offer.  

It would be my pleasure to provide you with more information and insight into Mesquite's real estate market.  Simply ask.  I will do my best to provide you with the information you request - free and without obligation. 

Happy New Year!