Market Conditions

Watching The Numbers

July 18th, 2008 Categories: Market Conditions, Mortgage

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If there’s any one thing that I’m not…it’s a statistician. Sometimes 2 plus 2 equals 4 however. I just make sure I don’t get all my information from Wall Street.

RISMEDIA, July 14, 2008-Amidst the gloom on Wall Street about housing someone forgot to check the stats. The National Association of Realtors® has now reported four straight months of rising housing prices, but it seems no one is listening.
According to NAR statistics, the median home price has fallen from a high of $230,200 in July 2006 to a low in February 2008 at $195,600, a drop of 15%. Since February, however, it has risen steadily every month. By May the index (which will be revised on July 24) had risen to $208,600, up $13,000 and a full 6.6%. Another indicator, the mean home price (otherwise known as the average home price), has also shown strength and has risen from a low of $242,000 also in February of this year to $253,100, a rise of $11,100 or 4.5%. It, too, has risen every month since February of this year.

We’ve been talking about foreclosures since they account for a big chunk of the inventory. I’ve actually gotten more leads and people starting their home search with the foreclosures. The fantasy of 1/2 price housing is very exciting. The reality is a little different.  Many realize quickly that by the time you buy them, fix them up and make something of them that they might be better off buying a non-foreclosure in the first place.

It’s a little different out in the suburbs where so many of the bank owned homes are relatively new, and have mostly cosmetics to deal with. In Vintage Vegas, many of the bank owned homes are truly broken down houses. I’m always on the hunt for the best HOUSE at the best price. But it scares me when someone without the resources or money AFTER THE CLOSING wants to by a “fixer-upper”. That’s what I call a big mistake!

The banks who own the foreclosures know this. That’s why we’re seeing the spread between list price and sale price on the foreclosure shrinking dramatically. I’ve been writing lots of offers on the foreclosures, (and getting some of the accepted). The banks are not jumping on any old offer that comes along. They’re stacking the offers, and trying to get a bidding war going. If that approach doesn’t work for them, then they’ll counter back a few thousand less than their list price.

We’re seeing the regular first time home buyer or sideline buyer jumping back into the water. The numbers have ALREADY shifted as the article I quoted above from RISMEDIA notes.  

 

 

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How Tight Is The Rental Market?

July 2nd, 2008 Categories: Las Vegas Real Estate News, Market Conditions, Mortgage

I don’t manage rental property, so I rarely advertise or even think about them. Yesterday at 3pm, we made the decision to take 3212 Brazos off of the market and rent it out instead. The seller had gone as low as he was willing and able to go in trying to sell it.

I changed the flyer on VVV to reflect the rental status, and posted the flyer on Craig’s List. The first call came 3 minutes later. and then another and then another. 11 calls by 6pm when I went to show the property to 4 of the callers.

3 of them want it. Almost every person I talked to had the same story to tell of rentals that they call on being already gone in a matter of hours.

I explained to them that there’s a huge shortage of rentals because so much of what was once rental inventory is now foreclosure inventory. Many of the previous owners who have lost their homes to foreclosure, or are about to, have caused an unusually high amount of people looking to rent again. 4 of the 11 calls yesterday were from people in foreclosure who know they’ll have to be out of their home in the next few weeks.

I saw a banner on an apartment complex yesterday that said “FORECLOSURE FORGIVENESS”. They’re having a heyday filling their units with people who’s credit was now ruined because of the foreclosure mess.

Rents have risen 25% in the last year as a result. A year ago, the seller on Brazos and I talked about 1000 to 1100 a month. Yesterday we put it out at 1300 a month and look at the response we got.

I’m not sure where it will balance out, as most of the people I’m currently selling homes to right now are giving up on being tenants and are buying their first homes. The investors who normally buy property to rent out are being hit really hard by the lenders and are having to put down 20% or more, and even then at interest rates at about 8%. There’s not a lot of investors buying at the moment.

In the meanwhile, it’s a landlords market. If you’ve been renting for a long time, you might want to put the upcoming rent increase that you are probably going to be hit with into the equation. Between the tax deductions, and the drastically reduced prices for homes, it’s probably time to start thinking about owning instead of renting.

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A Game With No Rules - Real Estate In Las Vegas

June 30th, 2008 Categories: Las Vegas Real Estate News, Market Conditions

I’m  writing this post to make the point that it’s still worthwhile to buy real estate, but that the rules of the game are constantly changing. It’s not as easy as it once was. It has to be treated as a game. Winning the game has enormous rewards, though. Besides the obvious eternal reasons for home ownership (pride, tax savings, pay yourself, build equity, control of how you live, no landlord, etc), there’s terrific opportunity to get into a home at prices we haven’t seen in 3 years.

You’re going to need help from a great agent, a great lender, and maybe even a great therapist before it’s all over. But it’s WORTH THE TROUBLE, and you might even get one of the easy transactions where everything is predictable and goes the way it’s supposed to.

Yes, they do happen, but not as often as they used to. In my 20 years of selling real estate and and consulting with buyers and sellers, I used to have a problem of some sort on maybe 1 out of 10 deals. Usually we’d get it fixed, and overall only about 1 in 20 had serious complications, and only about 1 in 50 where things couldn’t get fixed and actually fell apart all together.

Those numbers have changed dramatically. Buyers, sellers agents and lenders  need to be wearing their track shoes. Everyone has to be prepared to punt. All of us will need a lot patience and flexibility. The banks, whether they’re the seller or the lender, aren’t making it easy. But that doesn’t change the fact that it’s worth pursuing.

I’ve spent 20 years figuring it all out. How to negotiate. How to promote, and market listings. Knowing what the buyer will buy before they do. Common business courtesy. Pricing strategies. Contract clauses. FHA “livability” Standards,  Rules of Law. Checklists.

All of it for naught in this market. Everyone is just making it all up as they go along. Every listing, every agent, every brokerage, every deal is a new variation of the game of real estate. But that’s what makes life exciting. When things zig, I’m always ready to zag.

For example:

I thought the banks were putting ridiculously low prices on properties to get bidding war going. Except,  I just made a deal on one of them last week that was accepted below the ridiculously low low list price. We were the only bidder. At that price I thought there would be a dozen. The buyer would have bought it for 30 or 40,000 more than what it was listed for.

I submitted an offer on a property last week that wasn’t a foreclosure. I emailed it last Sunday, 8 days ago. I faxed it in on Tuesday because the listing agent hadn’t returned my 3 calls on Sunday and Monday.  I started calling the broker on Wednesday, who says he can’t reach the agent, and doesn’t have a phone number for the seller, who lives in Michigan. We’re frustrated but we’re ready to start over.

5 counter offers on a bank owned property, and each counter took 4 or 5 days to get a response. The final form the bank sent over was never presented with the first counter. It has a clause in it that says that the “contract is not binding on the seller. The seller can cancel at anytime and for any reason and return the earnest money to the buyer”.  The listing agent says “it’s just routine”. HUH? Will the buyer sign it? Will the bank take the deal with that clause removed? I’ll know today.

The bank evicted the former owner after the trustee sale. The former owner’s wife had moved away and filed for divorce and wasn’t on title in the first place. The title company says they won’t give title insurance until she signs a paper for them. I think trustee sale wiped out any claim she might have had. Buyer’s ready to go and the bank/seller can’t provide clear title. HUH?

The mortgage company approved the buyer loan. The buyer signed the loan docs. The funder says they don’t want to do the loan anymore. The seller moved out yesterday. There’s a terrific house on Zane Circle back on the market today, btw (not my listing or my buyer, I just got a call since I’d shown the house a couple of times). Something  similar happened on Susan and Steve’s deal, but we got a new lender and it closed Friday. I’m hearing this story a lot lately.

The buyer said he had the money for the down payment. We made the deal, but when we went to verify the funds, it had just miraculously shown up as a big deposit in his account. Turns out it was really a loan from the parents. The parents wouldn’t sign a “gift letter” that said he didn’t have to pay it back. Deal dead. Sometimes buyers cause their own problems.

Short Sales (where the bank is owed more than the house is worth) is another whole ball of wax. There’s a huge catch 22. The bank won’t tell in advance what they’ll take as a payoff without an offer on the table. The bank won’t decide if the seller is even eligible for a short sale till there’s an offer on the table. To get an offer, it has to be priced as if it’s already a foreclosure, so the price isn’t a real price after all. Only about 5% of the short sale listings that get an offer actually get closed, but short sales make up about 30% of the inventory. I think they shouldn’t even be allowed in the MLS until the bank has agreed to accept XXX dollars. 

What have we learned?

Hire a great full time agent. Hire a great full time lender.

Be patient and forgiving and flexible.

If you’re in a hurry or have a tight deadline, avoid the short sales and foreclosures.

Have your loan fully in place before you start looking. Lock your interest rate at the first possible moment.   

Have a back up plan ready just in case there’s last minute delays or problems.

Don’t be attached to the outcome, especially during the negotiating period.

Lots of deals are closing without even a hiccup,  but a lot more than usual require a lot of extra work and a lot of extra zig zagging. I’m up for it, and you ought to get in line while the getting is this good. Give me a call.

 

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Drastic Price Reduction On 1700 Chapman

June 26th, 2008 Categories: Las Vegas Real Estate News, Market Conditions, OUR LISTINGS

If you’ll remember, or click back here to take a look at our listing on the corner of Chapman and Oakey.

It’s truly a remarkable example of Retro Chic in a downtown mansion. It hasn’t gotten the kind of attention it deserves and those who did see it always told me that it was just too high priced. The seller now agrees, and we reduced the price yesterday by $100,000!

All of the pictures as well as all of our current listings are available to be seen in our featured property section in the left column. Of course all of our listings, as well as anything in the MLS are available to be seen in person by calling or emailing your favorite realtor (that’s me, in case you think I’m only a blogger).

If you EVER said to yourself “why didn’t I buy something before the big price runups 2 and 3 years ago”….

Well, you’ve got a second chance. We’re absorbing the inventory, new foreclosures are slowing, the builders are barely building anything, there’s still 5000 people a month moving to Las Vegas, and there’s still 50,000 new jobs coming on line just with what’s under construction on the strip right now.

It won’t be like this for long. If you’ve been sitting on the sidelines, give me a call or send me an email.

It’s a buyer’s market IF you can get a loan. With just fair credit and a provable income, you don’t even have to have much money.

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A Shortage Of Really Nice Homes In Vintage Vegas

June 20th, 2008 Categories: Las Vegas Real Estate News, Market Conditions

One of the things that I’ve noticed lately, is that most of the “normal” sellers, that is, those who aren’t in foreclosure, not in trouble, and that aren’t bank owned aren’t on the market.

I’m meeting a couple from San Francisco about an hour from now. They DON”T want a fixer upper. That ruled out almost every single bank owned home on the market. We don’t do short sales. That ruled out another 25% of the homes currently for sale.

In the price range we’re looking, that leaves only about 20 in all of Vintage Vegas. If you’ve been reading along with us, you’ll notice that the really nice properties are selling.

If you’ve been waiting to sell till things got better, then at least now we’re at the bottom (unless the whole economy totally blows up), and you don’t have a lot of competition for your NICE house.

If yours is a fixer upper, you’ve got plenty of competition.

Either way, if you’ve been holding off and think that you might consider selling, then I invite you to give me a call or send me an email. Let’s talk about it face to face.

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Local Existing-Home Sales Surge

June 19th, 2008 Categories: Las Vegas Real Estate News, Market Conditions, Mortgage

Today’s RJ has an article worth reading:

Local Existing-Home Sales Surge by Jennifer Robison

Here’s some of the most interesting quotes and statistics:

“May data for the Las Vegas housing market suggests that recovery has begun for the resale market,” SalesTraq President Larry Murphy said.

Thanks partly to a bumper crop of foreclosures on the market in Las Vegas — about a third of resale listings in the city are in default — prices have plummeted 22.5 percent, or $65,000, from their October 2006 peak of $290,000. The lower prices are summoning buyers and investors back to the market, Smith said.

And:

Plus, the median price of single-family homes sold through the Greater Las Vegas Association of Realtors halted its yearlong slide in the spring, with prices rising slightly from April to May. Single-family homes sold through the association’s members went for a median of $236,692 in May, up from $235,875 in April.

Murphy said three indicators would signal recovery in the housing market: a decline in inventories, an increase in sales and a marketwide halt to falling prices.

The first two have happened, but not the third.

Of course it’s not all wine and roses again, especially if you’re selling, but at least now I can actually try to help a seller figure out the value of their home. For the last 9 months, traditional sellers have been chasing a falling market. The “median price” might continute to go down since the banks are now giving away the foreclosure inventory, but the nice homes on nice streets are at least stabilizing.

I agree with Larry Murphy, who I’ve known for almost 20 years, and who’s opinion I highly respect, that:

“The bad news is, it’s not going to turn around overnight,” Smith said. “It’s going to take a while. Things will be flat, at best, for a while. If there’s any good news, it’s that anybody who can qualify for a home has the buying opportunity of a lifetime.”

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Real Estate Market Picks Up Steam According To NAR

June 9th, 2008 Categories: Las Vegas Real Estate News, Market Conditions, Mortgage

Diane Olick covers the housing market at CNBC. This is the report she did this morning covering the April “under contract” numbers according to The National Association of Realtors.

NAR reports a 6.3% jump in homes going to contract. “Contracts have picked up notably”. In the west, the number was 8.3%. The affordability index is expected to rise 15% this year.  

This certainly backs up the anecdotal evidence that I’ve been presenting based just on my little one man Real Estate Practice. The numbers in my office are equally exciting. In the geographic areas of Vintage Vegas, we’re seeing the number of homes under contract hitting the 20% number compared to the number of listings. All last winter the ratio of homes under contract to homes for sale hovered between 8 and 10%.

Of course if you’ll listen closely to her report, you’ll notice that she mentions that lending standards are as tight as can be, which translates to:

It’s a buyer’s market — IF YOU CAN GET A LOAN!

Yes, money is available to buy a home, but you’ve still got to prove your income, show reasonably good credit, and make a down payment. There is one way however, using FHA loans, and seller contributions that you can become a homeowner with less than $1000. out of pocket. Of course, as with all aspects of life, the more money you have, the better off you are.

If it’s saving up the money for a down payment that’s stopping you from grabbing one of the bargains, then let us show you how it works.

If it’s your credit that’s holding you back, let show you how to fix it.

What’s missing in the mortgage market right now are loans for the tip earners, and the multiple income families where only one of them has credit that’s good enough. When those loans become available, there will be an avalanche of buyers hitting the market. However if you’ve got real good credit, and a real good down payment, there’s still some loans where they won’t look at your income.

In any case, if you’re wondering what to do, I suggest that you call me or one of the lenders that I recommend. We’ll help get you on the RIGHT road.

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The Underwriter “Forgot” To Ask For The….

May 30th, 2008 Categories: Las Vegas Real Estate News, Market Conditions, Mortgage

The underwriter leaned back in her chair. Her thoughts weren’t on the stack of files in front of her. She was worried about losing her home. She bought it two years ago, you see. In July, as a matter of fact.

Back then, everyone you talked to was an expert on Real Estate.  Many of them even had a real estate license. Some actually were experts.  Some were just real experienced, and some had gotten their license a few months before to make some easy bucks helping their parents buy two or 3 “investment flips” with their home equity loan against the house in California. There was NO DISCUSSION going on anywhere about what happens if the “bubble bursts”.

It wasn’t hard to find someone whose cousin’s friend’s brother made a killing with a house flip. He bought it in the beginning of 2005 and sold it 6 or 8 months later, with a pretty hundred grand profit. It was a funny story because it was true. It was humorous to think about a house getting multiple offers on the first day of the listing. We heard a story such as that just about every single day.  

Our underwriter…remember her? Her rate adjusts next month. Business hasn’t been so good lately, and they’ve cut her hours. When she bought said house, she was lucky enough to be the high bidder. There were either 5 or 6 people competing with her. It only cost her $14,000 over the list price. That was a bargain. She’d heard of people paying 20 or 30,000 dollars more than the seller wanted. And to think, she didn’t have to put up any money upfront!

She’s in the mortgage business. She’s the one who gets the final say so over whether someone gets a loan or not. She’s not dumb. Things haven’t quite worked out the way she planned it two years ago.

Her sister, the waitress with a real estate license, hasn’t sold a house since she sold the house in question to our underwriter. The waitress/realtor told her that her house wasn’t worth enough to be able to refinance, now-a-days. Bummer. She’s been trying to get some underwriter at some mortgage company somewhere to make her a new loan. It’s not happening, and she’s scared. She knows why. She’s an underwriter, after all.

SHE’S ALSO VERY ANGRY, and feels so helpless. She wants a way to get even. She wants to get back at the world for being so cruel to her and her family.

The slap on the head idea came in an instant. A little inner voice caused the following plan to get launched:

I’ve got a dozen files on my desk that I have to look at today. Screw them all!

“I’ll nip pick every single letter of every single word of every piece of paper in those files.

“I’ll question everything! I’ll make the buyer and loan officers write up explanation letters about that 128 dollar deposit in their checking account 4 months ago.”

“I’ll find dozens of things in this dozen files that I can play mean about.” 

“I’ll make the realtors draw up addendums and make them run around getting them signed by all parties stating that:

“the pillow shams and bed spread that match the bedroom carpet and drapes are OF NO VALUE TO THE SELLER, and the fact that they are left at the property does not constitute a contribution by the seller towards the buyer’s closing costs. Furthermore, All prior references to said bedspread and pillow shams in the original offer as well as all subsequent counter offers and addendums are hereby nullified”.

“I’ll tell my assistant to tell the loan processor to tell the loan officer to tell the realtors who will then tell the buyers and sellers and moving companies and escrow officers and utility companies that the file is “NEXT IN LINE TO BE THE TOP FOLDER ON MY DESK”. In reality, I’m going to have my assistant start that rumor about each of those stupid dozen files that are on my desk

I’m going to lie to them and keep them dangling. I’m going to make them all pay for the misery I’m going thru. I’m going to PROMISE that I will respond to something before I go to lunch. I’ll remember it on my way home from work.

“That oughta teach’m!” our darling underwriter said to herself as she sat up straight and got back to work. She grabbed the next folder in the stack…. 

The Realtor who’s folder she grabbed was up late one evening. He was just typing his little heart out while pondering why this file hasn’t come out of underwriting yet. They’ve met every stupid little condition after ridiculous stipulation. All the BIG IMPORTANT THINGS were taken care of weeks ago. Big important things such as great income, excellent credit, 20%down payment, job security, excellent savings beyond what was needed to buy a home. The Appraisal. Those kinds of things.  We keep giving and giving. And waiting and waiting. And our f#*%%@ underwriter keeps stalling and stalling. If we don’t get an answer in the morning, no one has quite figured out what to do with the furniture. It’s on a truck on its way to Las Vegas.

He thinks to himself, How could this be happening? Why? Why? Why?

Maybe our Realtor let his imagination get away from him a little. But he’s willing to make a bet he’s not far off.  He can’t think of any better way to exlain it.

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Very Vintage Vegas - Geographically Speaking

April 18th, 2008 Categories: Las Vegas Real Estate News, Market Conditions

Last night at the Lo-Pro Mixer, someone asked me what I consider to be Very Vintage Vegas.

At first I thought he was asking about the types of neighborhoods, and types of homes. But it turns out he was asking if there were geographic boundaries.

This is the map that I have set up in the MLS for myself with the “boundaries” of the neighborhoods, era, style and types of house that are of most interest to me.

Of course with 18 years selling real estate under my belt, I’m familiar and knowledgeable about almost all areas of Las Vegas, including the Suburbs but what’s in the shaded area is what I’m most passionate about, and it seems to match up pretty well to the interests of most of my readers and clients as well.

Of course most of our focus is on the downtown neighborhoods, and Paradise Palms on the east side, and all of the fabulous neighborhoods such as McNeil, Scotch 80’s, Westleigh, and the various “Ranchos” (Rancho Bel Air, Rancho Nevada, Rancho Manor etc) on the west side.

There’s other neighborhoods with mid-century modern or otherwise unique homes such Charleston Heights, which is west of Decatur between Oakey and Alta, and Winterwood which is off of Sahara East of Nellis Ave. There’s also some great modernism along Washington and Vegas Drives west of Rancho, and in “vintage” North Las Vegas, but I rarely get asked about those areas.

I extend my map down as far as Tropicana, because there’s so much interest in the various townhome communities such as Sunrise Villas, Braewood and Heritage Square, Forest Hills, Garden Park, Tiburon and many others.

Also, I have to go as far south as Tropicana to include two of my favorite neighborhoods which were out in the desert and very rural when they were built. They are Royal Crest Rancheros, and Paradise Crest.

Tomorrow, I’ll be talking about what makes this little pocket in the middle of the valley so extremely different than anything built after 1970. And I’ll be demonstrating why there is such renewed interest in the “urban core” or “central Las Vegas”

In the meanwhile, Think about who you know who ought to be thinking about buying during a buyer’s market, now that we seem to be hitting the bottom of the downturn. Let me know who they are. They deserve an agent who understands “old” homes, historic neighborhoods, and the market in general. Tell them about this blog, and about me. I’d appreciate it, and so will they.

 

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March Statistics For The Las Vegas Real Estate Market - Lots Of Good News

April 8th, 2008 Categories: Las Vegas Real Estate News, Market Conditions

The months and months of doom and gloom and Armageddon seem to have come to an end. Hallelujah!

The Bank owned homes are being gobbled up faster than new ones are coming up for sale. Hubble Smith in the RJ this morning, calls it a “feeding frenzy”.

But it’s the investors who are buying. Just as the investors drove the market up in 04 and 05, they’re driving it down again, and establishing a bottom. Realist sellers are making deals also on the better houses, even though they’re not in foreclosure, or desperate to sell. Great deals on Great houses. Who would have thought?

If you’ve been waiting for the bottom….. May it just passed us, or is only a month or 2 away. Give me a call or send me an email. Let’s put YOUR plan together now.

HOUSING: “Feeding Frenzy” in Las Vegas  by Hubble Smith

The association reported 1,478 escrow closings for single-family homes during the month, a 34.6 percent increase from February. It was the third straight monthly increase. Sales are down 7.9 percent from the same month a year ago.