Las Vegas Shadow Inventory

The precise level of Las Vegas shadow inventory held by the banks remains unknown, but at the current time analysts believe it is at around 15-18 months worth of sales. As Option ARMs have begun resetting, and defaulting, in the first half of 2010 we expect defaults to increase, and that current loan modification programs will be ineffective in resolving any of these types of foreclosure problems.

The potential resetting of the Option ARMs is shown below. The portion of these that are in the Las Vegas market, and the rate at which the banks will foreclose are undetermined.

Nationwide the following assumptions can be made based on the available data:

  • Foreclosure activity won’t stabilize until late 2011
  • Monthly levels will not return to “normal” until 2012
  • REO inventories will stay at high levels through 2013
  • There is a massive “shadow inventory” that will slow down the housing market recovery
  • 900,000 REOs –nearly 630,000 not listed for sale
  • 1.2 million homes currently in foreclosure
  • 5.5 million loans in some stage of delinquency
  • Most likely scenario is for these homes to make it to market very slowly over the next 3-4 years, as it is not in the banks interest to release them at a faster pace
  • This will prevent another massive crash in home prices, but there will be a very long, slow, flat recovery

Whilst this is going on whilst the Nevada economy is moribund:

Whether or not the recent signs of life in the American economy are sustainable, one thing that we can say for certain is that they are not enough to sustain Nevada as it continues to lag the US recovery. Taxable sales continue to fall at double-digit rates. Unemployment has reached 13.9 percent, occupancy rates at local hotels are in the low 70 percents, and room rates are deeply discounted over 2008 rates. Visitors, the lifeblood of the economy, have increased a mere 0.7 percent in the past year. Furthermore, the end of the construction-fueled boom has seen massive unemployment in the construction sector, and it is hard to imagine it will return to its former size in the near future. The State budget deficit was $887 million in March 2010, as a result of taxable sales being down by 6.6 percent over the year and gaming revenue down 3.2 percent over the same period.

Nevada’s reliance on tourism, including travel to conferences, and construction, means that it will continue to lag the recovery of the general economy. The double-digit drops in gaming revenue and taxable sales in Southern Nevada in 2009 were a direct result of the national decline in discretionary income that had been partially allocated to travel. Taxable sales in Southern Nevada have fallen from a high of $3.49 billion in December 2007 to a current value of $2.66 billion.

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Las Vegas Residential Real Estate Update

The latest available housing statistics available from the Greater Las Vegas Association of Realtors show fewer home sales in August 2010 compared to the previous month and year, but higher prices.

The increase in shadow inventory, combined with few sales in a post-tax credit environment (The federal tax credit for homebuyers expired in April 2010), has lead to higher supply. By the end of August, GLVAR reported 11,327 single-family homes listed for sale without any sort of pending or contingent offer and another 3,026 such condos and townhomes. For single-family homes, that’s an increase of 11.9 percent from July’s inventory total and an increase of 32.0 percent from August 2009. For condos and townhomes, the inventory without offers in August increased by 4.6 percent from last month and 18.9 percent from last year.

However, under these conditions the median single-family home price in Southern Nevada during August rebounded to $140,000, up 3.7 percent from July, up 3.3 percent from August 2009 and matching the price from June 2010. The median price of local condominiums and townhomes sold in August was $67,000, down 1.5 percent from $68,000 in July, but up 1.1 percent from one year ago. These increases come at a time when the total number of local homes, condominiums and townhomes sold in August was 3,638. That’s down from 3,748 in July and down from 4,039 one year ago.

One would expect an increase in supply and fewer transactions to lead to lower prices, but as the Las Vegas market seems to be bumping along the bottom the buyers still see sufficient value to bid prices up. Local homes purchased with cash in August held steady at 45.9 percent, matching July and just below record levels. It is not uncommon to see multiple bids on a property, and bids above list price.

Trustee Sales
The supply of product and pricing at the trustee sales was constant from June-August, but in September more properties came up for auction of which 2,771 homes went back to the bank, a 52 percent increase from the previous month and 32 percent increase from the same month a year ago. The number of foreclosure sales purchased by third parties was 564, compared with 566 in August and 513 in September 2009. There is no clear reason why this would be the case as different banks are on different release schedules, but it is possible that this is just a wave following a lull during the summer holiday period.

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Las Vegas Foreclosure Fraud

Disclosures at the end of September 2010 that some big mortgage processors filed affidavits without proper scrutiny in thousands of foreclosure cases drew anger from congress and advocacy groups, with some prominent lawmakers calling for foreclosures to be halted in all 50 states. For example, in October Rep. Maxine Waters, called for a nationwide moratorium on home foreclosures accusing banks of “massive collusion and fraud” for putting people into mortgages they couldn’t afford. Possible Las Vegas foreclosure fraud is under the microscope.

Much of this is driven by political posturing with the US mid-term elections coming up in November. For example, Democratic Senate Majority Leader Harry Reid, who is locked in a neck-and-neck re-election contest with tea party-endorsed Sharron Angle in Nevada, has called for a moratorium.

The U.S. Attorney General Eric Holder has said the Justice Department is looking into the allegations, but he stopped short of opening a formal investigation. The Attorney General and bank regulators in all 50 states have announced a joint investigation into questionable foreclosure practices, including forged documents, apparently bogus signatures and questionable notarizations, but there are significant economic reasons why this is unlikely to develop into a complete halt.

The history of the issue is:

  • Since 2004, Florida Legal Aid attorney April Charney has been arguing on behalf of borrowers that those initiating foreclosure proceedings on behalf of securitized pools of mortgage loans had no right to do so, because they couldn’t prove they actually owned the debt.When lenders wish to foreclose, the law typically requires them to produce original, signed documents including the mortgage and loan note. While the mortgage documentation is on file at the local courthouse, the note is often lost or misplaced, particularly if the mortgage has been sold and securitized.
  • In 2007, a federal judge held that Deutsche Bank lacked standing to foreclose in 14 cases because it could not produce the documents proving that it had been assigned the rights in the mortgages when they were securitized.
  • In June 2010, in a Maine foreclosure case, a GMAC loan officer admitted in a sworn deposition in Pennsylvania that he signed off on up to 10,000 foreclosure documents a month for five years. He said that he hadn’t reviewed the mortgage or foreclosure documents thoroughly. This lead to a number of mortgage companies to halt foreclosures in the 23 states that have a judicial foreclosure process.
  • In the first week of October 2010 Bank of America announced that it was halting foreclosures in all fifty-states while it reviewed its foreclosure process for defects. Now several lawmakers on Capitol Hill are calling for other banks to initiate nationwide foreclosure freezes—a move which the Obama administration is currently opposing.
  • Bank of America’s temporary halt on foreclosures has reduced the number of properties coming up at the Las Vegas trustee sales by 50%, but as Nevada is a non-judicial state it is not expected that other banks will follow suit, or that the Bank of America moratorium will continue for an extended period.

The majority of states in the country allow banks to foreclose on defaulted mortgages without going to court. They simply deliver the borrower a notice of the foreclosure sale. This non-judicial process, followed by Nevada is far less prone to the issues that have been raised around judicial foreclosure where banks are typically required to produce a sworn and notarized affidavit of a loan officer and submit the mortgage documents.

In non-judicial states, banks aren’t required to submit anything to the court until they are sued by a homeowner seeking to stop a foreclosure. That means that they are far less likely to submit fraudulent documents, since the process has already been slowed. Nonetheless, banks may still find themselves swamped by challenges. Thus the situation in Nevada is that foreclosures may slow down for one of three reasons:

  1. Political/legislative demands
  2. Self-imposed review of procedures
  3. Increase in borrowers contesting foreclosures and asking to see the note to slow down the process

Each of these is unlikely for the following reasons:

  1. At the current time the Obama administration is resistant to any foreclosure moratorium, and to have one would make no sense economically: it would slow the market correction, extend the period of uncertainty, reduce future bank lending as capital ratio concerns arise, penalize pension funds, insurance companies and investors who hold mortgage-backed securities, and further weigh on mortgage giants Fannie Mae and Freddie Mac thus putting taxpayers at greater risk of losses.
  2. The banks need the income from foreclosures. A combination of delinquent loans and lack of income from foreclosures would have a negative impact on their balance sheets
  3. The majority of borrowers are not sophisticated enough to initiate “show me the note” defences

Whilst banks will delay foreclosures to mitigate future fines, the reality is that far more homeowners are behind on their mortgage payments than are even in foreclosure. The clear problem in the housing market today is not Las Vegas foreclosure fraud, but negative equity. With around 80% of people upside down on their mortgages the painful unwinding of the speculative bubble is set to continue for some time.

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Las Vegas Retail Market Update

The Las Vegas Retail market is commonly divided into three sectors:

  • Neighborhood Centers: Anchored with a single tenant such as supermarket, and also has other shop-space tenants. Size starts at 30,000 sq ft
  • Community Centers: Anchored with multiple tenants. Size starts are 100,000 sq ft
  • Power Centers: Multiple big box tenants, with a few shop-space tenants. Size starts at 100,000 sq ft

Retail in Las Vegas has been hit by three negative trends since the end of 2008: low consumer confidence, high unemployment and a declining local population. Total employment in Nevada was 799,700 in the first quarter, and unemployment climbed further to 13.9% in the quarter. These pressures have led to a market that has:

  • A vacancy rate of 10.5%. The historical vacancy for anchored retail centers is 3-5% and the current inventory of 5.4 million sq ft is the highest amount of available space in market history
  • Negative net absorption for the last two quarters (negative 147,000 sq ft during Q1)
  • The lowest growth in new spaces since the early 1990s (516,300 sq ft during the last 12 months)
  • Top line revenue of retailers remains down on two years ago
  • Almost all tenant and developer expansions, and new constructions have been on hold – approximately 1.2 million sq ft of space has been stalled or delayed
  • Average asking lease rates are $1.79 per sq ft per month, down from $3 at the peak of the market. However, actual negotiated lease rates tend to be far lower than these figures. New tenants in neighborhood centers can expect to secure lease rates of $1 per sq ft per month in the current market.

Any improvement in these conditions is contingent on improved consumer sentiment, an upturn in the housing market, and employment and population growth. It is likely to be well beyond 2011 before the retail market comes out of the bottom part of the cycle that it is currently trawling. In the meantime there is significant opportunity for cash buyers to take advantage of the distressed market. The current vacancy rate is a 10 year high for the Las Vegas Valley.

Retail employment has been in decline for the past two years after posting strong growth between 2004 and 2007. Between November 2008 and 2009 there has been a decline of 5,400 jobs.

Leasing activity has increased as a result of the lower asking rents, but the combination of ongoing weakness in consumer spending and retail employment us expected to keep demand for retail space weak through 2010 and into 2011.

Recently there has been a significant increase in foreclosure activity as banks have moved to protect what equity they have left in deals. Based on deals transacted at in-place rents, CBRE estimates that cap rates are at 8.5% – 9.5% for Class A grocery anchored retail, and 10-12% for lower quality product, such as unanchored retail product. However, there are very few deals being transacted to substantiate this assessment. Historically cap rates for Class A grocery anchored retail were 6.5% in April 2008, and as low as 5% at the peak of the market.


Residential Market Snapshot

The median single-family home price in Southern Nevada during May matched April’s $142,000, which was a 1.4 percent increase from May 2009, marking the second straight month the Greater Las Vegas Association of Realtors reported a year-over-year increase in local home prices, after seeing prices fall since February of 2007. However, the market is still significantly embattled. Nevada had the nation’s highest state foreclosure rate for the 40th straight month in April, with one in every 69 housing units receiving a foreclosure filing last month or more than five times the national average, according to RealtyTrac.com. In April, 16,217 properties statewide received a foreclosure filing, up 10 percent from the previous month.

Of the 21,143 single family residential units listed 10th May, 8,049 were listed without offers. Of the 5,907 condos and town homes listed on 10th May, 2,427 had no offers. 2,884 single family units sold in the month, with 50.9% of them selling in under 30 days. 769 condo/townhouse units sold, with 54.1% sold in under 30 days.

A growing market trend is an increase in short sales and decrease in sales involving foreclosed homes. In February, 22 percent of all existing homes sold in Southern Nevada were short sales. That number increased to 25 percent in March to 27 percent in April and to 29 percent in May. At the same time, bank-owned homes are accounting for a decreasing percentage of all local home sales, dropping from 53.0 percent in February to 50.0 percent in March to 43.0 percent in April to 40.0 percent in May.

Cash buyers continue be a major factor in keeping the market buoyant, with 42.6% of all deals in May paid for with cash, although this is a decline from the 50% levels of a few months ago.

The story that these statistics do not tell is that the banks have a significant shadow inventory and they are rolling properties out at a controlled pace to avoid further price depreciation. One example is Bank of America, which is planning to unload approximately 6,000 foreclosed properties to the Nevada real estate market in 2010, with most of these in Las Vegas. Estimates on how much shadow inventory is out there varies, with First American CoreLogic estimating there to be 1.7 million properties nationwide, and Amherst Securities estimating 7 million. Wherever you come out at within this range it is fair to assume that Las Vegas has a disproportionately large percentage of the nation’s shadow inventory. John Burns Real Estate Consulting Inc. estimates that Las Vegas has a shadow inventory that is equivalent to 18 months of sales.

There is strong investor demand for the shadow inventory as it comes online so if it is dripped into the market we do not expect it to depress prices further. The threats to this would be if interest rates increased from moderate rates, or unemployment increases further. Despite the shadow inventory you can see from the below that new listings are controlled. If banks were to change their artificial supply this would be a further threat to pricing.

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The Nevada Economy

It is almost certain that there will be no near term improvement in the Nevada economy. Whilst the US economy has just had two quarters of positive growth there are no signs that the Nevada economy has started a recovery. The US economy increased at an annual rate of 3.0 percent in the first quarter of 2010, following a 5.6 percent increase in the fourth quarter of 2009, but these first signs of recovery have not been matched by an increase in the discretionary spending of the US consumer, and it is this discretionary spending that is needed to drive a Nevada recovery.

Whether or not the recent signs of life in the American economy are sustainable, one thing that we can say for certain is that they are not enough to sustain Nevada as it continues to lag the US recovery. Taxable sales continue to fall at double-digit rates. Unemployment has reached 13.9 percent, occupancy rates at local hotels are in the low 70 percents, and room rates are deeply discounted over 2008 rates. Visitors, the lifeblood of the economy, have increased a mere 0.7 percent in the past year. Furthermore, the end of the construction-fueled boom has seen massive unemployment in the construction sector, and it is hard to imagine it will return to its former size in the near future. The State budget deficit was $887 million in March 2010, as a result of taxable sales being down by 6.6 percent over the year and gaming revenue down 3.2 percent over the same period.

Nevada’s reliance on tourism, including travel to conferences, and construction, means that it will continue to lag the recovery of the general economy. The double-digit drops in gaming revenue and taxable sales in Southern Nevada in 2009 were a direct result of the national decline in discretionary income that had been partially allocated to travel. Taxable sales in Southern Nevada have fallen from a high of $3.49 billion in December 2007 to a current value of $2.66 billion.

One of the best insights into the Las Vegas economy is the Southern Nevada Index of Leading Indicators, which is composed of 10 economic series, based on criteria used to build the National Index of Leading Indicators. The series and their respective weights are:

• Residential building units permitted 0.7
• Residential building valuation 0.9
• Commercial building permits 1.0
• Commercial building valuation 1.4
• Taxable sales 1.0
• Air passengers enplaned and deplaned 1.0
• Sales of gasoline (gallons) 1.2
• Gross gaming revenues 1.4
• Visitor volume 1.1
• Conventions held attendance 0.5

The Southern Nevada Index of Leading Indicators offers a picture of expected economic expansion over the coming four to six months, and Las Vegas continues to diverge from the national economy. The index, based on the most recent data disseminated for March, dropped just less than 0.3 percent from the February number. The index has been hovering around 125 for the past year, down from its peak of 135 in 2005. The fact that the index remains flat suggests that it may be some time before we see a general increase in economic activity in Southern Nevada. Commercial permitting, taxable sales, sales of gasoline, gaming revenue, and convention attendance dragged the index downward.

(Source: The Center for Business and Economic Research, UNLV)

Taking a closer look at the unemployment figures indicates that we are some way off a rise in home prices driven by the income of Las Vegas residents. Since the recession commenced in December 2007 Nevada’s unemployment rate has increased 8.8%. This is the largest increase of all the states, and Nevada has now overtaken Michigan as the state with the highest unemployment rate. The only positive is that the rate of unemployment decline has slowed, with a decline of 2.8% in May 2010 (31,900 jobs) relative to a 10.2% decline in May 2009.

(Source: NevadaWorkforce.com)

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Inventory Remains in the Shadows

Current Stock of Properties

Source: Greater Las Vegas Association of Realtors

The story that the statistics above do not tell is that the banks have a significant shadow inventory and they are rolling properties out at a controlled pace to avoid further price depreciation. One example is Bank of America, which is planning to unload approximately 6,000 foreclosed properties to the Nevada real estate market in 2010, with most of these in Las Vegas. Estimates on how much shadow inventory is out there varies, with First American CoreLogic estimating there to be 1.7 million properties nationwide, and Amherst Securities estimating 7 million. Wherever you come out at within this range it is fair to assume that Las Vegas has a disproportionately large percentage of the nation’s shadow inventory. John Burns Real Estate Consulting Inc. estimates that Las Vegas has a shadow inventory that is equivalent to 18 months of sales.

There is strong investor demand for the shadow inventory as it comes online so if it is dripped into the market we do not expect it to depress prices further. The threats to this would be if interest rates increased from moderate rates, or unemployment increases further. Despite the shadow inventory you can see from the below that new listings are controlled. If banks were to change their artificial supply this would be a further threat to pricing.

Of the 20,262 Single Family Homes listed for sale in February 2012, 7,974 have no contingent or pending offers, and 4,087 are new listings. There were 2,390 units sold in February at a total dollar value of $402.4 million. Of these sold units, 46.6% sold in under 30 days, 18.7% in under 60 days, 12.3% in under 90 days, 6.9% in under 120 days, and 15.5% in over 121 days. The total value of homes sold is 6.3% down on January 2010, and 4.5% down on February 2009. The average price of units sold is 2.2% up on January 2010, and 8.6% down on February 2009.

New Listings

Source: Greater Las Vegas Association of Realtors

Of the 5,495 Condo/Townhouse Units listed for sale in February 2012, 2,255 have no contingent or pending offers, and 1,166 are new listings. There were 685 units sold in February at a total dollar value of $58.7 million. Of these sold units, 54.6% sold in under 30 days, 18.2% in under 60 days, 9.8% in under 90 days, 7.9% in under 120 days, and 9.5% in over 121 days. The total value of condos sold is 3.9% down on January 2010, but up 40.3% on February 2009. The average price of units sold is 7.7% down on January 2010, and 9.5% down on February 2009.

The market for condos is picking up relative to single family homes, and the February statistics follow a trend, with the total dollar value for condo sales in January 2010 35.4% above those in January 2009.


Las Vegas Real Estate

Geography and Demographics of the Las Vegas Real Estate Market
The Las Vegas real estate market consists of land and properties in the Las Vegas metropolitan area in the Southern part of the state of Nevada. The Las Vegas metropolitan area is also known as the Las Vegas-Paradise-Henderson Metropolitan Statistical Area.

Metropolitan Statistical Areas are central urbanized areas consisting of a relatively high population density. They can be made up of multiple counties, but in the case of the Las Vegas metropolitan area consists of just Clark County, which is the 15th largest county in the U.S. and is made up of five cities: Las Vegas, Henderson, Boulder City, Mesquite, and North Las Vegas.

A central part of the metropolitan area is the Las Vegas Valley, a 600 square mile basin, which includes the metropolitan area’s largest city, Las Vegas. Las Vegas is the most populous city in the U.S. state of Nevada, and the 28th most populous city in the United States with an estimated population of 558,383 as of 2008.

The estimated population of the Las Vegas metropolitan area as of 2008, was 1,865,746. Back at the time of the 2000 census the racial makeup of the MSA was 71.58 White, 9.08% Black, 5.74% Asian, 0.79% American Indian and 12.81% of other or mixed race, and the median income for a household in the MSA was $44,616 and the median income for a family was $50,485. The per capita income was $21,785.

Economy of the Las Vegas Real Estate Market
Las Vegas is the entertainment capital of the world, and is home to fourteen of the U.S.’s fifteen largest hotels. The Las Vegas economy is driven by leisure and tourism, with the key employment sectors for the last decade having been construction, especially residential construction, and leisure and hospitality. The Las Vegas recovery will be driven by improvements in the national economy fueling tourism, and by the imbalances in the local housing market correcting. Economic recovery in Southern Nevada will probably lag behind the rest of the country as employment and wages will have to rebound nationally before visitor volume and gaming revenue can rebound locally.

Other sectors that male a contribution to the economy are conventions, shopping, and restaurants, and like casinos these are mainly fueled by tourists. The pro-business tax climate has seen the commercial sector steadily growing, and in addition to this government, the military and schools are significant employers.

The Las Vegas-Paradise MSA lost 58,600 jobs between May 2008 and May 2009, sending the unemployment rate to 11.1 percent. The largest loss of jobs occurred in construction (-17.3 percent), information (-10.9 percent) and professional & businesses services (-9.3 percent). Gaming revenues and visitor volume are down compared to April 2008, and only the deep discounts offered by local hotels have improved room occupancy. Multiple gaming companies are in default on their debt or declaring bankruptcy. Condo projects have seen their prices fall approximately 30 percent from their peak. Home foreclosures remain high throughout the Valley, and apartment occupancy is at its lowest level in 10 years.

All real estate sectors have grown with the economy: casinos have driven demand for off-strip warehouses; a growing business community has seen more offices being built; and retail has grown as a tourist attraction as well as to meet the needs of a rapidly growing population. The residential real estate sector has been hard hit by the recent economic downturn, and consists of a wide range of stock from single family homes, through to luxury condos.

Las Vegas Casino Industry – the commercial real estate driver
In the first six months of 2009 Nevada’s gaming revenues were down 13.5%, and 14.7% on the strip. In June the state’s gaming revenue sunk to 2004 levels: casinos collected $818.2 million from customers in June, which is a 13.8% decline from June 2008, and is the 18th straight monthly decline. On the Strip gaming revenue fell 14.8% in June to $414.5m.

A lot of Las Vegas’s appeal is based on the discretionary income that had increased through stock heavy 401Ks, home value increases, and easy lending practices. This lead to a building boom and focus on higher end casinos.

Las Vegas is more highly correlated with the national economy than it was previously because of its reliance on this discretionary income which has been eroded by the current recession. The wealth effect that drove Vegas’s boom is unlikely to come back quickly, particularly in the middle-market segment of customer.

The way that Las Vegas has traditionally worked is to have each building cycle create it in demand. But the idea of “build it and they will come” is clearly not something that will work in the current environment, and there is a significant supply of housing coming online.

Basically the industry built some very grand casinos based on average room rates in excess of $250 per night and with easy access to financing. With room rates below half that target the debt is becoming harder to service, and it may be the case that the cost structures are unsustainable, and that the next few years will witness collapses and changes of ownership. It may the case that the bull cycle owners go bust, and it is the next owners that make the money.

The Las Vegas Office Real Estate Market
There is 32 million square feet of offices over 10,000 square feet in Las Vegas, excluding those which are owner-occupied, or medical office buildings. Whilst one million square feet of office space was built in 2008, this was just 37% of 2007 levels. Vacancies in offices stood at 17% by the end of 2008.

The Las Vegas Retail Real Estate Market
There is 61 million square feet of off-the-Strip non-owner occupied retail buildings larger than 20,000 square feet. Vacancy in retail space stood at 9.9% at the end of 2008, which is double the rate at the end of 2007. With rising unemployment, and a fall in the discretionary spending of consumers the retail sector has been hard hit.

Las Vegas Residential Real Estate Market
In July foreclosure filings were up 32% on the same time a year earlier, and Nevada had the nation’s highest foreclosure rate for the 31st straight month. Deutsche Bank estimates that the MSA of Las Vegas-Paradise has 81% of homeowners who own homes valued at less than is owed on them, and it predicts that this will increase to 90% by the first quarter of 2009. These price pressures are likely to drive an increase in foreclosures. In the multi-family home sector vacancy rates increased from the average of 7.68% in 2007 to 8.76% in 2008. In the Class A sector the vacancy rate for apartments was 7.80%, Class B was 9.26% and Class C was 9.04%.

The Las Vegas Industrial Real Estate Market
Of the 102 million square feet of industrial real estate in Las Vegas, approximately 35 million is warehouse distribution, of which 40% is Grade A quality. Typical warehouses are around 100 to 250,000 square fee, but there are also larger distribution centers, and industrial parks of multiple buildings. North Las Vegas and the South West are the dominant sub-markets. In addition to servicing the Las Vegas MSA population of two million, and its massive hotel industry, the warehouses are used as regional distribution hubs for the 11 south-west states that can be reached overnight.