Market Conditions

The Cheapest Home For Sale In Las Vegas - A Tale Of Two Kitchens

June 27th, 2009 Categories: Market Conditions

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Everyone says they’re looking for a bargain. How does 11 dollars a square foot sound. I was joking around a few months ago when we started seeing 25. a square foot homes in fabulous neighborhoods – “They can’t go to zero – OR CAN THEY?) I’d think that 11/sf in a not so good neighborhood would be comparable to a home in the same condition in a much better neighborhood. Am I wrong?

The 11 dollar per square foot one is a $35,000 for 3168 sf near Bonanza and Maryland Parkway. Every room is torn up like this. The neighborhood is NOT one that I’m routinely promoting.

I’m sure some appraiser will use it as a comp for a 3000 foot house that’s been loved and cared for in one of the historic neighborhoods.

There seems to be an epidemic of lazy, stupid appraisers making stupid illogical assumptions. New appraisal rules are causing even more problems and are taking longer to give us even LESS accurate assessments of value.

Appraisers are supposed to know the difference between Oakey/Maryland Parkway and Bonanza/Maryland Parkway. The new appraisal rule are allowing appraisers to NOT EVEN GO TO THE PROPERTY!

They’re supposed to know the difference between the kitchen above……

and this one. (yes, I know it’s real 80’s, but it’s perfectly livable and functional, and doesn’t look bad at all for being what it is).

Yet the island kitchen with the subzero fridge is in a house that’s only listed for 25. a square foot. And it’s in one of the better neighborhoods in Vintage Vegas.

I’m not blogging which house this one is, because I’ve already written offers for 2 buyers, and there’s probably 25 offers on it since it was listed on Thursday.

 

 

 

This is the only kitchen picture in the MLS. I often wonder if they listing agents deliberately sabotage the listings to justify their ridiculous sales prices. I think showing an island, subzero fridge etc. might cause the house to be attractive to a lot more buyers. Instead, they just go for the ridiculous price to get the buyers out.

(If you want to be notified of listings like this the minute they hit the market, all you have to do is save your search in our MLS finder, or make an appointment with me and I’ll set you up on an auto program to notify you.)

 

 

Here’s another picture I took of the kitchen from the same spot the agent was standing. Between the 3 shots, I think someone could get a better feel for what the kitchen was like. I think if the Asset Manager (the guy in the cubicle at the bank with the 800 files stacked in the corner) had been given a true picture of the property, he wouldn’t have listed it at 25. per square foot.

I know they just wanted to generate multiple offers, but since there’s a shortage of nice livable (not fixer-upper, not shortsale) houses for sale in the Historic Neighborhoods –  I think he’d have gotten the same kind of response if it was listed at twice that amount.

Most everything that’s closing these days is closing at above – or way above the list price.

The multitude of buyers out their looking are willing to pay more. Now we have to get the appraiser and the banks to go along with the true market conditions.

 

Posted by Jack LeVine | Currently 6 Comments »

UncleJack….You’ve got some ’spainin’ to do

June 14th, 2009 Categories: Market Conditions

One measure of my success in “preserving and protecting the Historic Neighborhoods” is the volume of my to-do list and the number of buyers that I’m working with. Providing you with 2 or 3 posts a day was always my goal and it’s easiest to accomplish when the to-do list is light. I’ve failed at various times due to personal health or family crisis events, but in general I’ve done pretty good. The last 2 weeks didn’t fare well in keeping that pace going. In general, I devote 2 or so hours a day to typing, editing, and picture taking to maintain the pace of the blog. There’s just not enough hours in each day, so something had to give.

So what have I been doing?

For one thing, I’m trying to find homes for a whole bunch of people. As you’ll see in the next post, that’s a challenge I didn’t think I’d be facing a few short months ago. Not that there aren’t buyers, which was the case a year ago – it’s that there’s no inventory. Shocking – I know. I think that “how can I have it both ways?” is going to be the theme of the rest of this post.

Buyers want nice livable houses that they can improve on during their upcoming years of ownership. “Regular sellers” don’t want to give away their houses. The bank homes generally aren’t livable, and  most often aren’t being offered as accepting of FHA financing, which is how 95% of the non-investors are getting a loan. The regular seller’s had to compete against the banks. Now there’s little competition from the banks. In the next post down, I talk about some of the numbers.

That means it’s time for the “regular sellers (who can, and want to) to start coming out from behind the blast barricade. I’ve said all along, and numerously, as well, that the Vintage Vegas neighborhoods are going to climb out of the hole faster and sooner than anywhere else in the valley. It’s starting to happen.

Appraisals:

And, I’ve been doing battle with the appraisers and the bank listing agents. They have a set of rules, and a whole bunch of bad habits. Many of them are lazy. Many of them are unwilling to look at the current “real” supply and demand for localized subsets of the market such as Vintage Vegas. Some are just collecting their fees and phoning it in. There’s a few I’ve dealt with recently who are actually doing their job and looking at something besides “how many square feet does it have”. I’m educating them as best I can that there’s a difference between “original footprint, well preserved and well loved vintage homes” and “abused, neglected and altered” vintage homes. And I’m trying to get across that some blocks, some streets, and some subdivisions are better and more desirable than others.

For examples, I’ve seen appraisals for homes in John S. Park, or Marycrest that have had homes east of Eastern Ave used as comparables. “But the square footage is the same!” No other explanation given. That’s despicable laziness.  

I thought I was alone in my thinking, but Brian Wells covered the subject in an article in the Sun the other day, aptly titled: “Realtors complain about ‘low-ball’ appraisals”

Despite a 77 percent increase in existing home sales this year, some Realtors are complaining that low-ball appraisals are stifling sales.

First-time homebuyers and investors are leading the sales charge with home prices at their lowest in a decade, but Realtors contend that several appraisers are setting values that are much lower than they should be — and that those appraisals are killing sales.

Some call it an over reaction to the housing boom when some appraisers were accused of inflating prices on certain deals, prompting banks to lend more money than the property was worth. Appraisers contend they are setting prices based on what’s being paid in the market.

Mark Stark, owner of Prudential Americana, said he thinks appraisers are focusing too much on projecting what values will be instead of what they really are.

“The appraisers are being very conservative,” Stark said. “They are trying to cover themselves.”

What’s happening with appraisals has been felt the most in listings by homeowners who may, for example, have bought their home for $300,000 and are now selling it for $220,000, Stark said. If the appraisal came in at $205,000, that would force the seller to lower the price or the buyer would have to come up with $15,000 to make up the difference because the bank would loan only up to the appraised value, Stark said.

“The owner would rather tell them to drop dead than cut their price another $15,000,” Stark said. “I would say it is not causing us to lose all of these sales, but it is affecting 20 to 25 percent of the sales.”

About two-thirds of the existing home sales have been lender-owned properties.

Meetings, Meetings and More Meetings.

At the Foreclosure Crisis Town Hall Meeting the other night, County Commissioner and Realtor Susan Brager suggested that the appraisal rules need to be modified to not allow foreclosure and short sale transactions to be used as comparables to homes where the sellers AREN’T in trouble or desperate. RIGHT ON! I’m suggesting that the bank homes be divided into two tiers. Tier one is livable homes that would qualify for FHA/VA financing. NO INVESTORS ALLOWED TO BID. Tier Two is INVESTOR ONLY. Let them fight it out among themselves. I’ve had 4 instances in the last 2 months where the buyer I was representing actually made the highest bid on an FHA acceptable home, only to get shut out because the bank took the highest CASH OFFER, even though the first time buyer bid more.

As taxpayers we should be outraged that the banks and Fannie and Freddie are LEAVING MONEY ON THE TABLE for the sake of expedient, fast, all cash sales - after taking our tax money to make up for their losses!. I’ve had several hours recently of discussions on this subject with Dina Titus, Chris G. assorted brokers, REO listing agents, and their assorted staffs. Everyone agrees, but no one is listening.

Also at the Town Hall meeting, I had a conversation with Kenneth LoBene, the Director of the FHA Las Vegas Field office.  I asked him about the “shadow inventory” that’s being intentionally withheld from the market. He told me that 100% of it is in the north and southwest of the valley, and is almost entirely made up of the 25 or more to an acre, 2 and 3 story “monopoly houses –that’s my term for them, not his.

 

You know the ones I mean. Most Vintage Vegas affectionados laugh about them all the time. They’re not releasing them, because there’s already a glut of them on the market, and the buyers, if given the choice they didn’t have 3 or 4 years ago, absolutely detest them.  If you really want cheap newish housing and don’t care where it is, there’s some real bargains. I’m willing to bet that we’ll see whole neighborhoods of them get bulldozed one day soon. 

 So the “shadow” inventory that I thought was coming from the banks just isn’t there. There are a couple of dozen or so abandoned homes scattered around Vintage Vegas that are in the pipeline, and there may be a whole new wave of foreclosures caused by job loss, but that’s a story that hasn’t been written.

ANYWAY:

All I really set out to do was to tell you that I’ll try to get back onto my normal blogging schedule, in order to keep you amused, educated and informed. I ended up doing a rant instead. Wish me good luck!

Posted by Jack LeVine | Currently 5 Comments »

Support H.R. 600 and Downpayment Assistance Reform!

May 15th, 2009 Categories: Market Conditions

Down Payment Assistance has been around for a long time. It didn’t (in my opinion) cause or contribute to the bubble. Zero down and no qualifying easy money loans caused the bubble. Down payment assistance helped a lot of Las Vegas residents become homeowners. The programs worked in conjunction with FHA loans, which required reasonably good credit, provable income and job stability. The DPA programs like Nehemiah were thrown out with the bathwater of the lending crisis last year.

The Realtor community supports them be re-instituted, and we’d like your help. You can use the form in this link to contact your Representative and Senators. Please take a second to do it.

The FHA Seller-Financed Downpayment Reform Act of 2009 (H.R. 600), a bi-partisan bill sponsored by Congressmen Al Green (D-TX) would reform seller-funded downpayment assistance (DPA). H.R. 600 is the 2009 version of last year’s bill H.R. 6694.

Restore downpayment assistance programs for qualified homebuyers who need just a little bit of help to buy a home, stimulate the economy, stabilize home prices and revitalize neighborhoods.

A report issued by the Congressional Budget Office (CBO) confirms that H.R. 600 would not cost the federal government or taxpayers any money. In fact, the CBO estimates that seller-financed DPA will generate $65 million over the next five years and save taxpayers $13 million next year.

Reinstating DPA could help ensure continued liquidity in the stagnating housing market by providing aid to an estimated 600,000 working-class people for home purchases this year, generating $150 billion in home sales.

In order to restore downpayment assistance programs, we need to urge Congress to pass H.R. 600 or attach it to an upcoming housing bill.

Act Now! Write your two Senators and House Representative and tell them that you support the new, bi-partisan bill H.R. 600 to restore and reform DPA!

There’s more on the subject at the DPA GROUNDSWELL website.

Posted by Jack LeVine | Currently 1 Comment »

First Time Homebuyer Tax Credit Can Be Used As The Downpayment For FHA Loans?

May 13th, 2009 Categories: Market Conditions, Mortgage

This could be HUGE! Saving for the downpayment to buy a home can be one of the biggest struggles for those who have decent credit, provable income and little or no savings. “Zero Down” is one of the concepts that got us into trouble in the first place during the bubble days, but this is different. This is stimulus money being put to good use as a down payment instead of being received after the closing.

Yesterday at the National Association of Realtors mid year conference, Shaun Donahue, The HUD Secretary announce that they will be allowing the First Time Home Buyer Tax Credit to be used as a down payment.

“We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan said.

HousingWire.com describes the process:

Home buyers qualifying for Federal Housing Administration-insured mortgages may soon use the new first-time home buyer $8,000 tax credit as a down payment, US Department of Housing and Urban Development secretary Shaun Donovan said today.

The process of applying the tax credit toward down payment, called ‘monetization’ in the industry, allows for FHA-qualified borrowers to use the tax credit to obtain a government-insured mortgage.

Donovan’s announcement came at a National Association of Realtors legislative summit this morning, although HUD’s details on the initiative aren’t scheduled for official release until next week. The initiative will allow FHA-approved lenders to monetize the tax credit through short-term bridge loans, letting borrowers access the funds at the closing table.

This could change the home buying time schedule for a lot of first timers who are currently saving up a downpayment. We’ll have to wait till next week until they release the details. In the meanwhile, don’t stop squirreling away your money. Even if you can buy for what’s essentially zero down, you’ll still want to have as much money as you can for the fix up, redecorating or what have you that comes with home ownership.

 

 

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Foreclosure Moratorium Ends Without Any Media Coverage - Good News? or Bad News?

May 6th, 2009 Categories: Market Conditions

Late last year, with lots of fanfare and media coverage, Fannie Mae put a moratorium on new foreclosures. They said they wouldn’t initiate any new foreclosures during the moratorium.

The moratorium ended on April 1^st. There was practically no coverage of the event in the press. The only thing I could find on it was in the Washington Independent. That’s bad news for thousands of homeowners who were riding it out by staying in their homes. Many took advantage of the time it allowed them to do loan modifications, file bankruptcy, or make other arrangements. A lot of people who didn’t care whether they kept the home or not, merely used it as a way to stay put without making any payments. This means there’s a lot more foreclosures out there waiting to go back to the banks.

But there’s some good news buried in this. Good news, that is, for the buyers who are about to start looking, or those that have been frustrated, by the multiple offer difficulties in landing a deal. 

There was a second part of the moratorium that no one knew about. Fannie also put the brakes on releasing new property that they already owned to the market. The banks are sitting on an enormous inventory that hasn’t been put out to market yet. The moratorium for releasing new inventory ended today.

I’ve confirmed this with several of the top REO listing agents, (those few who I have respect for). The good news for all the frustrated buyers who’ve been bidding on the few good, livable, decent foreclosures, is that there’s about to be a flood of new listings. I’m told that there’s going to be about 8000 homes released in the next 2 months. Different banks have been given dates that they can start releasing. Remember, various banks actually are the servicing companies for Fannie Mae and Freddie Mac. They won’t all show up immediately, but they’re not going to hoard them anymore.

By hoarding the inventory, they gave time for the buyers to gear up, for the administration to put the 8000 first time home buyer tax credit in place, and to clear out a lot of the already on the market inventory. As I’ve reported, the number of sales has risen dramatically, and the existing inventory has dropped by over 25%.

The press and media have taken notice, and even the New York Times reported Monday that things are turning around.

Investors and first-time buyers, the traditional harbingers of a housing rebound, are out in force here, competing for bargain-price foreclosures. With sales up 45 percent from last year, the vast backlog of inventory has diminished. Even prices, which have plummeted to levels not seen since the beginning of the decade, show evidence of stabilizing.

Indications of progress are visible in other hard-hit areas, including Las Vegas, parts of Florida and the Inland Empire in southeastern California. Sales in Las Vegas in March, for example, rose 35 percent from last year.

The historic neighborhoods of Las Vegas that we cover here at VeryVintageVegas, has seen even more drastic increases in the number of sales. Current inventory of available homes in the downtown east side neighborhoods has dropped to a low of 47 homes today. There was 61 just last week when I talked about inventory levels. At the peak of the inventory last summer there were 121 homes available. Remember, in the same area that we call downtown east (Sahara to Charleston, and LVBS to Eastern) there’s 4300 total homes.

The numbers are similar in other historic neighborhoods such as McNeil and Paradise Palms. I know there’s even more buyers out there that I haven’t talked to yet, or that will be working with their cousin or bosses girlfriend or what not. The demand is high. There’s at least 10 offers (and 37 was the most I’ve seen) on any decent house that pops up in the historic neighborhoods. More inventory is a good thing, and buyers bidding them up is a good thing for all the current owners.

If you’ve tried and been frustrated, or if you’re just starting to get into the game, then it’s a real good time to update your loan or get started on it, and contact your favorite Realtor.

Posted by Jack LeVine | Currently 2 Comments »

Shrinking Inventory and Increasing Sales

April 30th, 2009 Categories: Market Conditions

I’m really just starting to get back out to look at homes. I did write a few offers during the last 2 weeks, but we got out bid on EVERY SINGLE ONE. Almost every new listing (under 100k) that pops up is in multiple offer status within 2 days. The market comments below are about Vegas as a whole, which is good news.

In the historic neighborhoods, the numbers are even more dramatic. For example, the “downtown east side” neighborhoods from Sahara to Charleston and from the strip going east to Eastern have a 50/50 ratio of pendings to available. There’s as many in contract as there is for sale. That area has 4300 homes in it, and there’s currently only 61 for sale. Based on the phone calls I’ve made for the buyer I’m working with this afternoon, 1/2 of those that are still showing as available have multiple offers on them. Recent closing are showing that the homes are selling for MORE than the list prices. Those closing become the comps for the next set of listings, so I see prices starting to rise again.

It’s actually a tough tight market within the boundaries of Vintage Vegas. It’s still an evolving game with no rules, but a game well worth playing. Those who do buy now will do really well as things improve.

Current owners will be happy to know all of this well, as it portends a rapid return to the baseline of value that we had in 2004 before the 5 year insanity of the boom and bust cycle.

 

From Applied Analysis with thanks to Fidelity National Title:

Inventory Shrinks To Nearly 18,000 Resale Units:

During the past week, the number of resale homes on the market dropped by 411 units causing total inventory to drop to 18,050 homes.  Inventory figures represent all property types listed within the Greater Las Vegas Association of Realtors MLS. Compared to the same week of the prior year, inventory levels are down 22.2 percent, or 5,165 units. During the past five weeks, the market reported consistent weekly declines in inventory with a combined drop of 2,671 units. 

 

 

 

Contracted Units Rise To Nearly 11,000 Resale Units:

The number of units in a contracted status increased by 402 during the past week reaching a total of 10,976 homes.  Contracted units represent homes that have been negotiated but are waiting to close.  They consist of contingent units (6,873 homes) that are contingent on some action taking place (e.g., a lender approval on a short sale) as well as pending units (4,103) which are transactions waiting for customary closing procedures to complete. 

Immediate Outlook:

Sales closing activity in the resale market has been on the rise and the latest contracting activity suggests this trend will continue over the next 30 to 60 days (typical closing time frame). (Applied Analysis) 

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A RANT From Uncle Jack

April 6th, 2009 Categories: Market Conditions

The world is insane. At least the banks are. They don’t get it AT ALL that there’s a difference between houses (all they look at is square footage); there’s a difference between streets (some are better than others); and a difference in neighborhoods (custom home neighborhoods are not the same as the tract neighborhoods).

Granted we’re dumping properties to just get rid of them. If you’ve ever met with me, or talked to me about the buying process, then you’ve heard me say “It’s a game with no rules” and “everyone is just making it all up as we go along” and “you’ll probably be in multiple offers if we’re looking at the lowest priced homes” and “we’ll be jumping thru hoops that are going to drive us crazy” and “it’s just a big guessing game lottery – but one that’s worth playing”.

Here’s a few stories from the last few weeks.

CONDITION

The condition of the homes are not being taken into account. Here’s a good example. 1067 Oakey is Huntridge home that was taken down to studs. It has a new roof, new walls, new electric, plumbing and windows. It has a new slab, hand poured and finished terrazzo countertops. It got listed for 43,900. There’s 10 offers on it this morning. It’s going to sell somewhere in the 70’s, because it was LISTED in the 40’s. It should have been listed for 80 to 90,000.

Granted, its selling for more than the list price, but the last few Huntridge cottages that sold were totally broken down, abused and neglected properties. They sold in the 30k’s, and the professional re-habbers who bought them are going to spend 40 or 50k to bring them to code and to livability (some will do a better job than others). They could only be sold for all cash because of their condition. But they were used as comps to determine the list price of this home. The new sale price when it closes will help the comps in the future, but in the meanwhile, it’s going to be showing as Pending at 43,900. 

PRE-SELLING

Properties are being typed into the MLS as ALREADY UNDER CONTRACT. The foreclosure listing agents are taking their own buyers to it first without putting it in the MLS. This doesn’t give the larger pool of buyers the opportunity to set the price. You’ll see how important that is below, when I tell you a few more stories.

This house is on Delaware in Paradise Palms. It’s one of the 8 two story Mid Mod homes that match the “Johnny Carson House” on Omaha that I spoke to you about last month, WHICH BTW – is back available again, since the short sale buyer for it dropped out to buy this one on Delaware (according to reliable sources).

You’ll notice there’s a dumpster in the driveway. Look at the Worst MLS PHOTO OF THE DAY that is posted right below this. All three pictures are from this house. I may be crazy, but I think it might have sold for more if the pictures or the showings were done AFTER THE CLEAN OUT.

It’s showing a list price of – are you ready– 129,000. This really ticks me off. If only one buyer gets to see it, and they get an insider deal…..IT JUST DESTROYED ANOTHER 50 or 100,000 dollars worth of value in the neighborhood. It’s going to show as another 46/sf pending, and then when it closes as a sold comp. Maybe….but I doubt it….it’s actually going to close for more, but either way it was give away even by today’s foreclosure prices.

HALF PRICED HOUSES

The newest strategy that I’m seeing the banks using is to INTENTIONALLY list the properties for a THIRD OR A HALF of what they expect to get for them. I can see their point. They don’t waste a lot of time on the market with continuous price reductions trying to find what the market will bear.

The market is much better suited to determine the price. In fact, an hour ago, I was told there are more than 10 offers, and I wrote 2 of them for different buyers (yes, I stayed impartial with the written permission from both buyers) and that most of them are for double the list price of …..49,900 for a 2000 sf brick home on 9^th , which is a lovely street of custom homes in Park Manor. It needs to have the shake roof replaced because of its age, but it’s NOT a 50,000 house.

There’s a couple of problems with this strategy, however. There was a parade of buyers thru it who were actually looking for a 50k house. I got calls from 14 people to show them this house. They were all wasting their time, and it was obvious the minute they walked into the door. Another problem is without guidance from an accurate list price which takes into account condition, location, neighborhood, market conditions and more, then it’s JUST A GUESSING GAME LOTTERY. A Game worth playing, but a game none-the-less.

GIVE AWAY DUMPING

Here’s a story that Vegas Lee emailed me over the weekend. It’s about some newer properties, and the bank in question was the in-house lender when they were new a few years ago. Just about every single home in the subdivision was sold using an infamous “sub-prime” loan.

Reading your web site thought you would get a kick out of this story.

 

Eight weeks ago (name withheld)  bought four houses for $50,000 each from a bank.  He already owned 9 of them so the Bank called him to see if he wanted them when they got them back from others.  He had paid anywhere from 80k to 150 k over the years for the ones he already owned.

 

Last week he gets a call from the same bank that he paid 50k to.  They have two more of the same  homes for sale.  He looks at them, one is perfect condition, the other one needs paint, carpet and a new stove.  Get this, the bank says he can buy them BOTH for $39,000 each.   This is the same bank he just paid $50,000 for four of them just a few weeks ago, they know he will pay 50k. WHY lower the price to 39k for these?

 

Can we say dumbasses? BTW.. yes, he wrote them a check and bought them.  J

OWNER OCCUPANT VS INVESTOR

Fannie Mae has an interesting and infuriating policy for their foreclosed homes. In order to submit an offer, the buyer is required to fill out a questionnaire that asks whether they’re an investor or if they’re going to live in the property. I can see this as a good tie breaker if 2 offers are really close or equal to each other. Give it to the person who’s going to live in it.

In this particular case….an investor client of MINE bid 20,000 more (all cash) than the offer that was accepted by the bank. As the TAX PAYERS who’s bailing out the banks and Fannie Mae, we should all be as outraged as I am. 

Not to mention that it was a 2000 foot house in Marycrest that was listed for FORTY THOUSAND DOLLARS! Sure, it was a gut job, but even in the current condition could easily have sold for more than double what it was listed at. It’s showing as pending at the moment, and every bank agent who’s trying to price a new listing is looking at that and then UNDER PRICING THE NEXT NEW LISTING. The fact that there were 34 offers on it in two days isn’t being taken into account. They don’t know that it’s going to sell for more than 70% over asking price, or that an ALL CASH BUYER was turned down who offered MORE THAN DOUBLE the asking price!

JUMPING THRU HOOPS

It was a totally broken down, beat up house with 2 realllllly bad room additions in Charleston Park. It was listed for 23,000 and offered only to Cash buyers. There were 31 offers on it. EVERY SINGLE ONE OF THEM was required to get a notarized statement saying they would waive their right to receive any disclosures from the selling bank. It’s routine if you’re the buyer of ANY bank owned home to get the notarized waiver. But to REQUIRE it as a condition of making the offer is a ridiculous practice that I hope I never see again.

 

So I’ll say it again….

There’s no rules. But we play along anyway. Those who are buying now will be huge winners. Multiple Buyers bring prices back up. Another VERY GOOD sign for those of us who already own. I think anyone who’s waiting for the bottom already missed it.

 

Posted by Jack LeVine | Currently 6 Comments »

The Law Of Unintended Consequences

February 27th, 2009 Categories: Market Conditions

Read the rest of this entry »

Posted by Jack LeVine | Currently 1 Comment »

A VeryVintageVegas Reader From Charleston Heights Says:

February 22nd, 2009 Categories: Market Conditions

I got this great note by email last night.

 

I like getting notes like this, for a variety of reasons, as you’ll see. It prompted me to make a “marketing decision” that I’d been toying with. I discuss that after Karin’s note.

 

Hi Jack!

Thank you for your Very Vintage Vegas site!  I discovered it around Xmas, and have been a daily visitor ever since.  I know you’ve heard it a thousand times - but I so wish I’d known about you and your expertise in the older Vegas homes when I’d moved here 6 1/2 years ago.  Just like someone recently remarked, my realtor ( a family member - sigh) thought I was out. of. my. mind! wanting an older home.  Her vision of my first home buying experience was a gated condo from the early 90s; my vision was a little house that would help me not be homesick for New Mexico.  After 3 months and touring probably 60 homes, I found  a little concrete block ranch in the Hyde Park neighborhood between Alta & Charleston.  (I’m sad I’m just this side of Valley View out of your “very vintage” country - and some day I would love to have a conversation with you about helping my neighborhood step up to what it could be, with some love and attention.)

 

I’m writing to you today because I’m hoping you have information about a neighborhood  I just found the other day.  It’s near Red Rock Elementary, sort of bookended by the Red Rock Baptist Church on Alta at one end and Fire Station #6 off Jones on the other end of Upland Avenue.  (Side note - that fire station has the COOLEST tower made from those delightful concrete blocks!)  While Upland has a few of the houses I’m interested in, it’s really the streets of Mallard, Knight, and Wisteria that caught my attention - I think they are all what you’ve referred to as “mini mods”.  They have that slanted roofline, narrow vertical windows, and interesting concrete details - either the block, or bits that stick out, or designs embossed (?) on the chimneys.  I’d love to know the history of this neighborhood, the builder, average price - anything you can tell me.  I’m also intensely curious to see the inside of one - although I’m in no position to be hunting for a new home.  

 

So I look forward to hearing from you!  I know you’ve got lots of stuff going on, so no rush - just whenever it’s convenient for you.

 

And some interesting tidbits:  the March issue of Metropolitan Home has a feature on a re-model of a Palm Springs mid century mod home; a recent episode of HGTV’s Rate My Space is a contemporary take on a MCM-style living room; and a cool thing to do with that decorative concrete block:  put them down as a walkway, and fill the spaces with recycled glass “mulch”.

 

Thanks again for your site!

Karin 

I’m certainly well aware of the neighborhood she mentions. It’s called Charleston Heights. It’s a HUGE subdivision, with an interesting story that’s told in this article. In the next few days, I’m going to go exploring with my camera and MLS Key. I haven’t been outside of the boundaries of VeryVintageVegas for a while.  I guess I’m going to be introducing some new neighborhoods after I write a post about Charleston Heights. I last mentioned it in a “fun features found in foreclosures” post from a few months ago.  

 

Officially, I’m dropping the physical boundaries of VeryVintageVegas from my vocabulary. The neighborhoods that I talk about regularly, both on the blog and when I’m speaking one on one, are the downtown neighborhoods. They’re already “cool and hip” according to one Realtor who specializes in them. But that’s only because people know about them. These days, more and more people find out about them all time. I’d like to think that VeryVintageVegas is responsible for that.

 

If Las Vegas was a tree, you could clearly see each decade-wide ring as you go further and further out from VeryVintageVegas.  Starting at downtown, you can see each ring because the architecture of the homes and the size of the lots change each 10 years.

 

One of the last pieces of print ad that I ran (before I abandoned paper media as a way to advertise myself) was this. It was a color coded listings of the neighborhoods of VeryVintageVegas. There’s some puffery in it, but the sentiment is right. Some ARE red hot and some are “undiscovered”.

 

The parade I’ve been trying to lead for the last 10 years has been into the red hot “downtown” neighborhoods. Right this minute, every single home under $100,000 in the “historic neighborhoods” is essentially un-livable. 

 

There’s a lot 50’s and 60’s neighborhoods in the next ring out. They’re the real “UNDISCOVERED” neighborhoods. Right this minute there’s a whole bunch of perfectly livable homes that are under a $100,000. They’re a little further out, but not much. There’s some terrific “mini-mods” among them, but mostly its ranch modern 60’s tract homes. The mini-mods, however, tend to be clustered together. Those clusters will turn upward first. Some streets and blocks are better looking, and architecturally more interesting than others. The same is true in the “downtown” neighborhoods, just at a different price point.

 

If your buying budget is constrained, or you want to pioneer a new area of hip-ness, then maybe one of the undiscovered neighborhoods would be perfect for you, just as it was for Karin.

 

 

 

 

 

 

 

 

Posted by Jack LeVine | Currently 1 Comment »

Dramatic Increases In Las Vegas Home Sales - Especially In Downtown And Vintage Las Vegas

January 9th, 2009 Categories: Market Conditions

 I’m a lot of things, but statistician isn’t one of them.

The last two big posts I did “Four Secrets” and “How The Foreclosure And Lending Crisis Came To Be” didn’t have any statistics or numbers in them. J.C. Melvin, on the other hand, loves numbers and what he shares in this video is well worth watching, especially since it’s NOT BORING.

Of course, the numbers are about Las Vegas in general, and they’re actually even better in  Downtown and Vintage Las Vegas. Even the RJ is capable of giving us good news these days. Today’s RJ has a story entitled “December Brings Dramatic Increases In Las Vegas Home Sales”.

To tie it all together, I think that it’s important that we start to remember once again that price and value aren’t the same thing. The foreclosure sellers (banks) don’t put much value on the homes they’re selling, so they lower the price to get them gone. The owners of MOST homes in Las Vegas (especially in Downtown and Vintage Las Vegas place a value on their homes that’s MUCH higher than current pricing. That’s why there are so few nice homes for sale at the moment.

For the buyer, It’s quite the opposite. To the buyers, the value is scoring a really cool house and getting it while the prices and interest rates are low. JC thinks we’re at the bottom give or take a few dollars. I agree. 

Current Downtown and Vintage Las Vegas Home Owners – If you’d rather be one of the buyers, and you thought your current home is standing in the way….Then we should be talking about a trade in.

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FOUR SECRETS YOU OUGHT TO KNOW ABOUT….Reasonably Well Maintained Homes Whose Owners Haven’t Totally Butchered Or Neglected Them

January 9th, 2009 Categories: Market Conditions

If you’re packing up and leaving Vegas in the next few months or a year, this won’t apply to you, but you’ll find it interesting. It might even tip the scales for you one way or another, as to whether you’re packing it in on your big “living in Las Vegas” adventure. Not all things work out the way we planned. It’s one of those bummer things that we all have to put up with, regardless of who’s “fault” it is. 

For the rest of you….Here Goes:

There’s a lot of very interesting, unique, fun and hip homes out there in VeryVintageVegas land.

They have reasonable to fabulous landscaping. They’re somewhere between clean and meticulously clean, and they don’t look like a bad MLS Photo. Things that have been broken or worn out over the years have been fixed or replaced. The more fun, interesting and well preserved – all the better. And most importantly, they weren’t purchased any where near the top of the market, and they weren’t cash-out re-financed in 2006, either.

VERY FEW of them are on the market at the moment. Most foreclosures don’t get a passing grade. I tend to spot the A’s and the B’s and often sell them as quickly as they come to market. The condition of way too many of the foreclosures is much worse than most buyers are willing or prepared to deal with. The subject at hand are the A’s and B’s.  As I write this, most of the foreclosures get a C, D, or F.

Since the topic is - reasonably well maintained and decorated/landscaped homes who’s owners haven’t totally butchered them over the years.  I’ll let you in on some not so little secrets.

SECRET NUMBER ONE:

Some of the people who currently own them would be willing to sell them now or in the very near future. They just don’t have a reason to sell now. But they would if they had a reason. I’m going to give them one in a minute.

If I heard it on the news once, I heard it ….., as they say. I’ve said it a thousand times as well. “If you don’t have to sell, don’t be on the market”. If you HAVE to be on the market, at least behave as if you are. Especially if you’re a short sale.

SECRET NUMBER TWO:

There’s people out there like Garth and Mary. And Meghan and Erin & Rachel. Steven & Josh are on the list since just the other day. So is my brother Joe-Almost-Elvis. Some of you have met him, I believe. Soeren & Coni and Melissa and Dean and Jake —as well as Susan & Steve, and Well & Yocelyn, and Dana & Marc and Nikki, and Scott & Heidi— were the “list” from the last few months.  Every month there’s a batch of them. Please don’t be upset if I skipped you. Trust me, you’re on my list. During the last 6 months they BOUGHT the best fit, most fun, most interesting, best potential home (at the best damn price they could squeeze out of the seller) that was on the market the day they decided to buy it. 

All of them INSISTED on being in what I call VeryVintageVegas. And most importantly, each of them essentially had declared “This is the bottom of the real estate slide AS FAR AS I’M CONCERNED. I want to own now”. Oh, and they’re not concerned in the least if they were right or wrong about being the ONE person in America who bought at the bottom. There can be only one! We’ll let you know in a few years who the winner was. Ahhhh, the great American real estate lottery.

SECRET NUMBER THREE:

There’s a whole lot of people just like the new homeowners in Secret Number 2. Except that they haven’t bought YET. I’ve been talking to many hundreds of them over the last two years since I started this VeryVintageVegas marketing campaign. (Note: VeryVintageVegas is almost two years old, but I’ve been a full time Realtor for 18 years and have been living and working downtown since 1987).  There’s plenty more who haven’t ever called me or any other realtor yet. And there’s even some who have a sister-in-law with a real estate license. She’ll be VERY upset if they didn’t use her when they buy a home. I’m willing to help them also with advice and commentary, if they ask. Maybe they’ll be buying one of my listings.

Many of them are already well along the path of getting ready to be homeowners. Some are so set to go, that the minute the right one comes along……they’re going to grab it. Some will think about a house too long and miss their opportunity. Trust me, it’s happened more than you think. Some are going to negotiate to a deal I didn’t think I could EVER get accepted. On the other hand, some of them are fixing their credit or saving up some money, or getting back in on the good graces of dad. Some of them will probably never get it together.

I’m happy to report that All of them really like what I’m doing, and are looking forward to joining with me by investing themselves in home ownership, as long as it’s in VeryVintageVegas land. It’s a funny thing, but, no one ever calls ME, to tell me they want to live in Summerlin or Green Valley.

These future buyers have been watching HGTV. They’ve been dreaming about doing over an “old” home and making it as green and as unique as they can muster. They’re thinking about it generally as a home to live in, and NOT TO FLIP. The bloom’s off of that rose. The professional investors who are buying the MOST BROKEN of homes now and during the next year in order to flip them, need to be sure they know what their future buyer is going to be looking for. If not,  I’ll be starting a new series called “Dumb things flippers do to mess up a Mid Mod”. 

I haven’t spoken to many of these potential buyers since they first called and talked to me that one time. The seminars that I attend and often ignore say I should be calling them every 2 weeks. And I should be sending them a postcard every week. The same holds true for the potential sellers who I’ve casually talked to.

I blog instead, which makes it easy for all of you to keep track of me, instead of my keeping track of all of you. I’m good about answering calls and returning phone messages and emails, and I get the job done.

Some who’ve called me recently only wanted to ask a question and or get a little perspective. For many, we put a 3 month or 6 month or 2 year plan together that would lead them to being able to buy. If they follow it, or some similar plan, then they’ll probably be calling me back sometime to prove to me and a lender that they’ve put their financial house in order. Then, they can pick a house, too.

Slowly but surely, and then faster and faster, these are the buyer’s who are going to be buying in the next year or so.

So Secret number TWO and THREE are actually secrets that the potential future sellers need to hear.

Secret Number 4:

If the potential sellers are looking for a reason to sell, then I suggest they think on this idea:

There’s probably another home (that currently belongs to one of the people just like you) that would fit you better. And There’s one for that seller, also. Need another room? Want another bathroom? Want to stop cleaning so many bathrooms? A whole wall rock fireplace that was built by REAL stonemasons in the 50’s (that hasn’t been painted over – preferably) might be nice. Really cool crank out corner windows? Ever dream about a big wall of glass overlooking your lush landscape and pool? How about one that’s already fixed up kind of like the way you were going to do your current home? If you’ve done everything you can think to do, then maybe it’s time to start over on a clean pallet?  

It’s the move up (or down) game. We’ve been playing it for thousands of years. The game isn’t over yet. If the game’s to end, it’s going to take a total meltdown and collapse of EVERYTHING we know and love. In my opinion, we’re only experiencing a real good, well deserved scare.  Kind of like my heart attack. Others beg to differ. Of course, if we do totally melt-down, then the game will just start all over again. Period.

Typically, it’s about moving up on the lifestyle and standard of living scale. It still is. But here’s the twist. (Every good game show has to have a twist). The twist is that financially it might only be a sideways trade at worse. But you will be in a different home that better suits your lifestyle, taste or family needs.

So it works like this. You bought your house for a hundred grand  6 or ten years ago. A few years later, you rubbed your hands gleefully thinking it was worth $200,000.  Now it’s a hundred again IF YOU SELL NOW. It’s worth WAY MORE THAN THAT TO YOU, unless theirs a good reason to SELL IT NOW.

You sell your house for a 100k and buy one like you’ve been talking about moving up or down to, at the screaming best deal lowest price you can get it for. The seller you buy from is going to take an even bigger hit than you are. It’s a simple formula. It works and it’s true at every price point. Better house….and at worst – financially even.

If you’ve talked to me over the last few years about selling your house, or if something/anything (like my idea above) sparks an idea in your mind, or if it crosses your mind in a month or 6, and certainly if the situation arises where you HAVE to sell now and won’t be buying again, then give me a call.

I might well already know the buyer for your house, and I’ll probably know a damn cool house for you to buy.

I got ALL that said, without ever using the words Mid Century Modern even…ooooops.

Posted by Jack LeVine | Currently 1 Comment »

How The Foreclosure and Lending Crisis Came To Be

January 8th, 2009 Categories: Market Conditions

For months now, I’ve been hearing CNBC talking heads talk about “Mark To Market” accounting rules and how they should be changed or repealed. None of them ever really explained to me what it means.

I found this great video and that explains it real well. I see now that what I’ve been saying about the REAL value of our homes isn’t really what the foreclosures are selling for. It’s just that the foreclosures are current market, and if you’re going to sell…you’ve also got to “mark to market”. All of the appraisers are doing just that.

I’ve been telling everyone for a year to just sit tight if you’re not HAVING to sell. If you HAVE to sell, then you’re just like the banks and will have to “mark to market”.

On the positive note, there’s suddenly a lot of people saying to me “get me what you can for my old house. I’m going to trade it in on a bigger, better one (or smaller, even cheaper one). As long as you’re buying another, replacement home at a give away price, then you’re just trading even for one you’d rather have than the one you have now.

If you can afford to sell, and would actually rather be in a better or different home, then think about the fact that you’ll be buying in again at 2000 or earlier prices with historically low interest rates.

Watch the video here, or read a synopsis of it just below the video. It’s long by “short attention span” standards, but worth watching. The video isn’t embeddable, so you’ll have to click away to see it.

Here’s a snippet:

So what’s the problem?

Before we get into what this means for banks, let me make a quick analogy using a scenario that should make perfect sense to you and your clients.

Let’s imagine that you own a house in a neighborhood where all of the houses are priced at around $300,000.

Unfortunately, your neighbor, who owns his home free and clear, falls ill and needs emergency cash quickly. Because he is under duress, he must sell the home for $200,000 in order to get the cash he needs right away, even though the home is worth considerably more.

Now would this mean that your home is now worth the same $200,000 that your neighbor sold his for? Of course not, because you are not forced to sell under duress. It just means that your new neighbor got a great deal.

However, if you were a publicly traded company and had to abide by Mark to Market accounting rules, you and the rest of your neighbors would now have to say, by law, that your home was worth only $200,000 – not the $300,000 you would get for it if you actually sold. So what’s the big deal? Read on.

Then, there’s this video which has been making the rounds of the Realtor Community. It’s hysterically funny and pathetically sad at the same time. If you actually click on it to watch it directly at the YouTube site, then you’ll see that there’s a lot of other parodies using the same footage.

I’ve been sitting on it for a couple of weeks, and finally decided, what the hell, since it also makes the point about the foreclosure and lending crisis and how it affects all of us.

Posted by Jack LeVine | Currently 3 Comments »

A Case In Point About How The Banks Are Selling Their Foreclosure REO Homes In Las Vegas

January 2nd, 2009 Categories: Market Conditions

I get emails every morning telling me what’s newly listed, newly contracted or newly closed. I have an automatic search set up for almost every neighborhood that I pay attention to. The Marycrest – Crestview - Morning View neighborhoods are among them. You can do the same for yourself with our MLS Search, if you’re inclined.

On November 24, about 38 days ago, I got an email about 1733 S. 17^th Street in Morning View Heights.

$65000.

I pinpointed which house it was and got there in about 5 minutes. One of my cash investor buyers put in a bid at list price about 2 hours later. Almost everyone I work with has their own search set up. The buyer that I wrote the offer for was the first one to call me from the alert. Even they were surprised that I already had been there. That’s how Meghan got the “Dean Martin’s Cousin’s House”, as well. (and here also)

The thing is….the house should have been listed for about 120. There were comps (recent sales) of fairly decent houses to support 120,000 if there was an appraisal. There was even a comp in the 180’s with a pool that was the same size. Why the 65,000 list price? Why were the very broken 1 bathroom Huntridge foreclosures being listed, and then selling quickly for 65000+-?  After all, there’s even smaller homes with one bathroom in North Las Vegas being listed and sold in the 60k’s. Why this one at 65,000. Why not at 100,000? Why not 120,000?

We were told at 2m that there was already another offer coming in.

Ooops, multiple offer situation. Not uncommon lately.  On the 25^th we got it in writing with what’s called a “highest and best” counter offer from the listing agent. 5pm on the 26th would be the deadline to counter back with our best offer. Then it’s just waiting to see who won the guessing game.

It’s a lot like poker. But not as immediate. Well anyway, before turning in our best bid, we got wind that we were bidding against an FHA buyer who would be living in the house. I knew the house would pass FHA if a few roof shingles and a window got replaced. On the 25th, I ran into another agent when I was at the property. He had an investor buyer with him. They were trying to scare us off and we were doing the same in reverse. Getting this house at anywhere even within 20,000 of the list price, would have allowed room to fix the place up and flip it. For the last year, almost all the investors are/were buying and renting them out for a year or 2. At 100 to 120,000 that would have happened to this property. At 65,000, there would have been room to flip. We also assumed that an owner occupied buyer would see the house as an already pretty livable property for a really low amount, so they’d be willing to pay more that an investor would. My buyer was actually rooting for the FHA buyer, however. Our bid? A paltry 70,000, instead of dropping out completely….just in case there was a going to be a miracle.

Somehow, this story sounds vaguely sounds familiar…HMMMMM. A three year old flashback? Something’s different though. Oh, yea,  the numbers are different.

Anyway, the results were posted today. The FHA buyer got the house. Turns out out the other investor never put in a bid. Turns out that the bank could have gotten a whole lot more, and sold it just as quickly at a considerably higher list price. Turns out that the buyer got a not so “pretty” but perfectly livable home that only needed minor maintenance repairs. The major cosmetic overhaul might get done sooner or later….or not.

And the FHA buyer managed to land an 1800 sf home with a view of Sunrise Mountain, on a terrific street in Downtown Las Vegas for only $75,000.

The shame is that all the negotiations from typing it into the MLS to the declaring that the bank had accepted an offer was all of 3.5 days. If it had been listed at even $100,000., and shown over the next weekend, then a lot more buyers would have found it, especially a lot more FHA want to live in it buyers, WHO WORK DURING THE WEEK. I believe it would have sold at over a 100 if they would have listed it that way.

Moral? No one’s smarter than anyone else. There are no rules. It’s totally a guessing game. The banks are screwing themselves yet again. And they’re SCREWING ALL OF US AT THE SAME TIME. Why? Because CONSUMER SENTIMENT AND WILLINGNESS TO SPEND and our whole overall economy is heavily dependent on how we feel about our home prices!

Thousands of homeowners and scores of other banks got hurt hugely by this “NEW COMP” in the record. One homeowner made out like a bandit. I’m happy for them. Really.

And that’s why prices have crashed well beyond “correction of the excesses of a few years ago”. That’s why when they give away perfectly livable (even though a foreclosure REO) homes for the same price per square foot as the totally trashed homes, prices go down even further.

ATTENTION ALL BANKS. It’s not that far to ZERO. Give a couple of them away for a dollar and watch how fast we can start an upward skyrocketing price trend when the next bank sees see the comp you just created. We’d unload ALL THE FORECLOSURES AND REO property in a matter of weeks. Then we could have a stable market again.

Maybe that’s what they’re trying to do. Anyone who buys a house this year is going to be  be among this year’s winners. But on the other hand, it doesn’t make any sense to be waiting around for the $1 house.

Posted by Jack LeVine | Currently 2 Comments »

Support NAR’s Four-Point Housing Stimulus Plan

December 4th, 2008 Categories: Market Conditions

The most recent economic stimulus bill, the Emergency Economic Stabilization Act, was a good first step towards stabilizing our nation’s economy.  Unfortunately, a number of the Act’s provisions have not proven to be as useful at stabilizing the nation’s housing markets as was first thought.

Congress may consider second economic stimulus bill this month.  If they do, there are a number of changes that could help to provide more stability to the nation’s real estate markets which most agree is a necessary step towards recovery.

NAR has urged Congress to include the following provisions in any future legislation:

• Make the $7500 first-time homebuyer tax credit available to all buyers and eliminate repayment requirements. The credit’s limited availability and repayment requirement severely limit the credit’s use and effectiveness.
• Make the 2008 FHA, Fannie Mae and Freddie Mac loan limits permanent. New rules for 2009 will reduce them. Now is not the time to limit mortgage affordability.
• Get the Treasury relief program back on track and target more funds to mortgage relief. Create a federal mortgage interest buy-down program to make below-market rates available and stabilize home prices.
• Permanently bar banks from engaging in real estate brokerage and management. The banks have proven they have enough to do to simply manage the loan process. Banks should not manage home sales and purchases.

There’s an easy way for you to tell Congress you support this stimulus plan from the National Association of Realtors. Click here. It’s easy and in everyone’s best interest.

Sincerely,

Uncle Jack

Tags: nar, national+association+of+realtors, congress, housing+stimulus+plan

Posted by Jack LeVine | Currently No Comments »

A Shortage Of Homes For Sale In Las Vegas?

September 24th, 2008 Categories: Market Conditions

Well, it’s certainly true that there’s a shortage of very nice, well kept homes in Vintage Vegas. 

It’s not true out in the suburbs where there are whole neighborhoods of practically new homes that are being given away by the banks. The Map shows the density of the foreclosures in Las Vegas. You’ll notice, if you click on the map, that the density in Vintage Vegas is still extremely low. I’ve been screaming for many many months that the foreclosure crisis is a suburban thing. The headlines, however, don’t make that distinction.

“Location, location, location” is the most famous real estate cliche in the world. We’ve all heard it before. The thing about cliches is that they’re almost always absolutely true. There’s 3 locations in the cliche. There’s the big picture location of Las Vegas in general. There’s the medium location of “which part of town” and there’s the very specialized location that is specific to a given neighborhood, location, era or some other micro criteria. Combine location with charm, character, and uniqueness, and you’ve pretty much summed up why I love Vintage Vegas.

Since I spend a good part of each day actually looking at the properties that are for sale in Vintage Las Vegas, I can say with as much authority as I can muster, that the foreclosures in the historic neighborhoods are the most neglected, most broken and most beat up of the homes for sale in the whole valley. They’re also the oldest. “OLD” homes, to most of my readers, are the most desirable.  

But not everyone wants a total or partial gut job fixer upper. They do want a home with charm and character and great location. In every neighborhood that I cover, there’s a shortage of nice homes, that is, ones that aren’t in foreclosure or already bank owned, and that have been loved and taken care of.

Why would there be a shortage? Because the sellers have been scared away. They’re waiting for the market to get better. They won’t let go of the fantasy price that they could have gotten 2 years ago. Some of them owe too much because they refinanced or borrowed against the home, already taken out their equity, and can’t or won’t give it back.

Those who aren’t upside down don’t realize  that they can still get much more for their well loved home than the bank is going to get for the crap that’s on the market right now. It won’t be as much as they’d have gotten before, and it’ll be a long while before they get that price again. But they can get their home sold if they’ll go back on the market at a reasonable price.

That, of course, begs the question of what’s reasonable. It’s really a simple formula. Can a buyer buy a beat up house, fix it up and bring it to the standard of the well loved home? How much will they spend to acquire the crappy house, fix it up, and feel like they’re still not upside down and that they got a bargain? The well loved home is worth about 10% more than that. That’s how much a comparable nice home is worth in today’s market. An extraordinary home will still do even better. But it’s not going to get 2006 prices no matter how much the seller prays.

The buyers are going to compare the following 2 scenarios. The scenario one buyer is to buy the bargain/repo/fixer, spend a lot of time money and energy, and have a great home when they’re done. Scenario two, is to buy a well loved, fun, exciting home right up front and maybe do a little painting, or change the flooring. Naturally, scenario two will cost the buyer more up front, but the whole purchase can be financed into the new mortgage. Buyer one will need to have lots of cash or lots of credit card reserves to get to the same place.

The fixer upper buyer has a lot more choice right now than the buyer for the well loved home. If you’ve considered selling, and waited, or gave up from a previous attempt, at least now that we’re at the bottom of the market,  I can tell you that the house will be worth the same today as it will during the next year or so. If moving on is in your plans, now is as good as next year.  

Recent proof is the “Dean Martin’s cousin’s house” or my listing on Papago, or the Liberace Townhouse, or my listing on 15^th street. All sold in less than 30 days. All getting top dollar in today’s market. All bought by buyers who don’t want a fixer upper. All priced reasonably, but not “given away”. Giving them away is the bank’s job, and the buyers for the give-aways aren’t the same buyers that are looking for nice well loved homes.

If you’ve been thinking or re-thinking being a seller….give me a call.

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