Eviction Surge Nevada - Las Vegas - Clark County

[Michael Tully]

Has anyone seen this report from the Guinn Center? Meet Kevin also did some discussion on this topic. I feel like most landlords here on BP got above 80% rents during this crisis, but I'm sure there are many mom and pop landlords who aren't on here that didn't handle the crisis as well as those on here who knew what to do. Report is here:

https://guinncenter.org/wp-con...

As well, the Nevada Unemployment Insurance Program has announced that they are running low on funds, with some estimates saying they have about 8 weeks of funding left unless they get federal assistance. Combined with a huge state deficit and proposed budget cuts of over $1B to cover this, do you think there is a coming eviction surge? Will this cause a foreclosure surge in the valley as well as mortgage forbearance comes to an end? Could be a great time to find deals as small time landlords try to unload their headaches.

Link to the Unemployment article:

https://www.ktnv.com/news/coro...

[James Hamling]

As a general rule across the spectrum's of various investing and economics the foundational rule comes to the essential life blood of the system is liquidity in the system, it is the blood that pumps through the veins. So while having an injury to any 1 system is a problem, contraction of liquidity in the system (capital/incomes removed) is the life threatening item. 

The unemployment has been mitigated, addressing the contraction of capital, but there is a finite amount of capital the country can outlay. Review actions the fed has had to take to keep the financial wheels going, by most regards we are somewhere around plan W in options available to keep the capital available at the Fed level to distribute unto states, and states are closer to plan X if not Y or Z depending on the state. 

This paradigm is why there is this growing urgency by POTUS to get the country open and moving, as the economy takes time to get going and there is no long term mitigation potentials for a mostly closed economy in the US, fact of math. 

With all that, it's the duration of things that concern me. Remove the capital injecting actions at play currently, things will get interesting real quick if there is still considerable uncertainty as to the future of things in peoples mind, as thats when people think to save. Remember going into this the average American had 2 weeks of savings..... 

Worst case: sizable default on rental payments (20%+) causing high leveraged property owners to enter net negative territory on operation funds, fearing a mortgage default position endangering other holdings a sizable volume of properties enters the market for sale in short time frame, inducing decrease in median sale value of homes which of course the media in all it's well thought careful reporting will properly report..... OR will flock to the doom-reporting and sell the fear of the market declining, inducing additional significant volumes of properties to come on the market in a race to "beat" the decline, there in fueling the decline itself following a supply/demand cycle and so on and so fourth as the feedback loop begins. As fear is sold by the media drooling at the next crisis to pump ratings, ancillary market actions come into play as business's fear the potential and start drawing back staff and inventory to prepare "just in case", which feedback into sourcing business's and companies who act similarly and in reaction to lowered demand, layoff's begin gaining momentum, and the feedback loop get's going industry wide.  Now with media drunk on the sky high ratings as it's 24-7 apocalyptic reporting "bliss" the stock markets steadily tumbling, world markets start reeling from feedback loops and we are in a full out economic "run on the bank" BUT with a current pandemic condition, a mitigating factor as barrier to standard mitigating actions and economic injections. 

Summary: things may get a little wobbly but calm intelligent actions will prevail and things will go on and in 6 months to 1yr we will be through this and it will be more a blip than anything else.... OR it's gonna unwind like a pinata at a MLB party and we will all be more focused on how we are gonna pay for food and fuel than paying a mortgage of what tenant payed in full.