I know what you're thinking, what in the world does Middle Eastern oil have to do with Real Estate in Las Vegas? By now you've heard of the Global economy a million times. We are supposed to be interconnected in ways that would have seemed impossible even a decade ago. Well, it turns out that this is often very true.
You can't pick up a serious newspaper or watch the financial news without hearing all about the huge and growing "current account deficit" being run by our fiscally unfit federal government. The flip side to this coin is a dollar that has steadily eroded in value against the major global currencies, especially the Euro and especially lately. I know what you're thinking, Economics is only slightly better than watching paint dry and none of this intersects with Real Estate in Las Vegas. Turns out, it very much does.
You know what they say in Vegas....Show me the Money!
Well, if you want to purchase Real Estate in Las Vegas you put a new twist on this and say....Show me my Rate! Let's face it, lenders have been showing buyers some incredible rates for quite a while now (let's not mention their fees). At first, this was explained in Washington by the fact that the economy was on the verge of recession and needed all the help (low interest rates) it could get. But this is yesterdays news. The economy has been steadily growing for quite some time. Yet the rate for a 30 year fixed is almost as juicy as the old days of recession fears. What gives? You would never guess who is greasing the wheels that make Real Estate in Las Vegas such an attractive investment.
The next time you stroll through a big box retailer like Target or Wal Mart, stop and give thanks to the interest rate gods. Everyone who scored a killer rate on their mortgage or re-finance anytime in the last
18-24 months should chant something silly in the isle of the store. Let's face it, with soaring values at your back, Real Estate in Las Vegas was definitely a get all you can get for the money proposition. How did so many people get so much house for the money in Vegas and across the country? Low interest rates, plain and simple. How did they stay so low in the face of a growing economy? Chinese imports, no two ways about it. Look on each side of the isle as you chant to the gods at Wal Mart. At least one in three items in the entire store were manufactured in China. The Chinese central bank gets flooded with dollars when we buy all this stuff. What to do with all these dollars?
You guessed it, US Government debt. The same financial instruments that directly affect and set the rate for mortgages of every kind. The more Treasury bonds the Chinese buy, the lower the rate on mortgages for Real Estate in Las Vegas.
On you way home from Target, did you stop to get gas?
Don't be so annoyed by the price. Nobody in Kuwait made you buy an SUV with a 50 gallon tank (I did the same thing). Try this instead. Think about how much fun it was to pay cash for that gas guzzler when you re-financed 6 months ago at a ridiculous rate. How did this happen? It's certainly true that oil is selling for almost twice the price it was just a year ago. Oil just happens to trade globally in US dollars. What to do with all those extra dollars? You guessed it, a big chunk of the windfall was invested in US Treasury paper, which held down rates significantly, which made your re-finance irresistible, which put you at the pump filling your new SUV. So drive home in good cheer safe in the knowledge that your investment in Real Estate in Las Vegas was a safe bet in an uncertain world. MS Las Vegas Real Estate shares your enthusiasm for this market and we're happy to say that our expertise has helped many benefit from the global effects of Chinese imports and Middle Eastern oil revenue. Who knew?
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