You might have heard about some figures released earlier this week:  February saw an 8.2% drop in sales prices with a 2.9% rise in sales.

Even so, many people still refuse to believe the market value of their home has dropped, and if they want to sell it they will have to take less money.   The banks have gotten this message:  most of them have dropped their prices, and that is part of why bank-owned property is moving fast in Las Vegas.

Oh!  And here’s a little follow-up on bogus foreclosure “rescue” schemes:  the Feds have indicted 20 people who defrauded over 100 people out of their homes in California.

One fascinating aspect of our current market is that some houses blow off the market in days, while others languish for many months. While price is certainly an aspect of this phenomenon, it is not the sole factor. Nor is it all in the condition of the home. I am blown away by the fact that people will buy houses with no toilets, or with missing windows, or with huge holes in the wall, and gladly pay up for the privilege.

At the beginning of this week, there were over 17,700 single family homes available and another 4700 condominiums and townhomes. Half of them are vacant; almost one in 5 is a “short sale” where the mortgage balance is greater than the purchase price. These people need to sell their homes, and they need to do it quickly. Just short of 1 in every 10 listings is bank-owned (REO), and they account for over half our sales! That isn’t because banks are underpricing, and it isn’t because repos are necessarily nice places to live. People are getting into bidding wars on these properties, and eventually paying more than asking price in many cases! And then other bank-owned properties have sat, gathering dust, for months upon months.

So what is the difference between the houses that sell quickly, and the houses that simply don’t sell at all? And who is to blame for the ones that don’t sell? Remember, if the market is really declining, a fairly priced house can become a wildly overpriced house over the course of a 3 or 6 month listing agreement. There are many reasons that a quick sale is a good thing, so it is worth our time to consider how to make a home sell quickly. So here is a short list of things:

1. Of course, price still matters. If you walked into the grocery store and told them you had to buy a pound of ground meat for fifty cents, odds are very good you would not get it. If they told you they had to have $15 for a loaf of bread, you wouldn’t buy it. In fact, you would leave the store and go somewhere else — and so do home buyers when the list price is too high! Sadly, your monetary needs do not change the market value of your home. Remember that every for-sale sign in your neighborhood is competition for buyers. Clinging to a need you can’t and won’t get may cost you even more in the long run. After all, you still have to pay the bills. Listen to your Realtor about current market conditions. If she says your price is too high, listen to her.

2. Of course, the condition of your home still matters, too. Volumes have been written about “staging”, the process of preparing your home for sale. I bet there’s one in your local library, or that your Realtor can give you specific tips relevant to your home. The sad fact is that most people have a hard time looking past your clutter, your dirt, your un-done list of little maintenance chores. The last is of particular importance, because prospective buyers will wonder what other maintenance hasn’t been done! A clean house just seems nicer than the same house with dirty carpet and a scratched up front door. Really good REO agents know this, and at the very least send a cleaning crew to spruce things up.

3. Be reasonable about showing your home. Buyers can’t decide whether to buy if they can’t get in the front door. What they can and will decide is that your place is too much trouble. Go ahead and let the Realtor install an electronic lockbox so people can see the place while you aren’t around. The electronic ones available in most areas are very good — I have yet to see one broken into — and can only be accessed by Realtors via an electronic key system. Most are programmed to allow showings only during certain hours. If you are in a situation where you cannot allow people to be in the home unattended, seriously consider waiting to list until that situation is resolved.

4. Don’t put in unreasonable requirements. You know that if you say you will sell your home to “only Good Christians” or “No Blacks”, the Federal government will kick your butt? Well, there are other requirements that are legal but still not reasonable: “must prequalify with XYZ Mortgage, no exceptions” comes to mind. Some requirements are understandable but still not fun to deal with, such as unfortunate cases where sale is subject to court approval.

5. Make it a good listing from the start. If Jane Average does a search on REMAX.com and finds 82 houses that fit her needs, what is the first thing she’s going to do? She’s going to eliminate everything that doesn’t have pictures! And if she still has 50? She’s going to cut everything that only has one picture! Then and only then, she will read the description in the comments while looking at the pictures and online tours. Which would she rather tour: “Bank Owned-Addendums required-Property sold AS-IS. Information is not guaranteed-Buyer to verify all. Spacious two story home with upgrades and pool. Vacant now, show anytime!” or “REMARKABLE, CLEAN, HIGHLY UPGRADED HOME. Energy efficient windows w/custom treatments. Wood laminate floors in entry & kitchen. EnergyStar rated appliances. Big cement patio. Master bdrm separate from other rooms. Antique custom cabinet/sink combo in bath.You will be impressed.” She probably won’t even call Joe Average over to the computer until she’s narrowed things down to 10 or so. House-hunting isn’t what it was even 10 years ago. More people are using the internet — not the newspaper — to pick a short list of homes before they ever get in a Realtor’s car.

6. Be aware that things change. A wise man once said that the only thing that doesn’t change is that everything changes. Both Realtors and their clients need to be aware that market conditions change all the time, and that their strategies must therefore adapt to the way things are, rather than the way they used to be, should be, or the way we want them to be. Prices change, desirable neighborhoods change, the “best” schools change, the kinds of property people want to buy changes, interior design changes (thank goodness). Don’t fight change; adapt to it.

Don’t make things harder than they need to be.

We do love our Master Planned Communities here in Vegas.

Out on the West side of town, you’ll find Summerlin.  Summerlin has been around for some years, but parts are still under construction.  In fact, this weekend some of the builders are having what is billed as America’s Biggest Open House (warning, inline sound until it loads).  There will be 75 model homes in 19 neighborhoods built by 12 builders.   If you would rather look at these homes from the privacy of your own home, there’s a virtual tour option at the bottom of the page.  Interesting fact:  Summerlin is named after Howard Hughes’s Grandmother!

Down in Henderson — the Southeast end of town — we have Anthem.  Also with new construction still underway, it is in a rapidly growing area of town.  It has the advantage of being relatively near the airport.

Still in the South part of town, we have Mountain’s Edge.  In addition to providing housing to thousands of families (at a profit, of course), and putting thousands of tradesmen to work building that housing, they actually have environmental and philanthropic goals. Oh, and they are the #1 selling master planned community in the country for 2007.

Of course, #5 on that same list is Providence, a very new community on the Northwest side.  I have discussed Providence before, and you can read it here.

Oops! I almost forgot Alliante, on our North side.  Over 20% of their acreage is dedicated to public and recreational use.  That includes 24 miles of concrete trails and yet another championship-quality golf course.  Vegas is big on golf.

If you would like expert assistance finding a new or resale home in any of these great communities — or anywhere else in the Las Vegas Valley — be sure to call me or click the “Contact Me!” link in the side column.

A combination of aggressive mortgages, maxed out home equity lines, and dropping home prices mean that home equity rates in the United States have fallen below 50% for the first time since World War II.  This is of course related to housing being in the “deepest decline since the Great Depression.” There has actually been a major shift in the priorities of debtors, and homeowners are more willing to walk away from their homes than ever before.

This of course means that lenders are becoming more risk-averse — they don’t want to loan money that Joe Borrower might not pay back, and they really don’t want to worry about liquidating Joe’s house down the road.  In fact,  not only are people with good credit having trouble getting refinancing, you can’t get financing at all in some areas for certain kinds of real estate.  For example, if you want to buy one of those 800 high-rise condos currently available in Las Vegas, make sure you have a large cash down-payment.  I can’t blame the banks for not wanting to get involved in what is essentially a niche market, but it does make life “interesting” in our local real estate market.

Even if the current housing problems are not over, I find it very encouraging that pending sales were unchanged — not lower! — in January on a nationwide basis. On a local basis, things are doing even better here in the Las Vegas Valley (many thanks to Tim Kuptz for making sure this data is regularly available to the people who want facts instead of vague impressions).  Bargain hunters are swooping in trying to catch REO (foreclosed and bank owned), short sale, and vacant property at prices that they haven’t seen in years, knowing there is a finite amount of buildable land in the Valley.

Also encouraging on the national level is that the FHA has come out with the new conforming mortgage limits, adjusted for regional conditions.  You can find your local limits here;  in the Las Vegas Valley, it’s $400,000 for a single family home, last revised this past Wednesday, March 5, 2008.  Trust me, I can help you find a nice place to live for $400,000;  what part of town do you like? The FHA getting involved is great news, because everyone expects them to ride in for the rescue, much like they did in 1935.

In the meantime, this might be a great time for some renovations,  but remember these bits of advice:

To ensure that your renovation will pay off, make improvements that others will appreciate as much as you do….  [Some] projects… are a matter of personal taste, and they may not add value in the eyes of a future buyer…. Also, don’t compromise long-term value for short-term convenience.

How true.

CNN has an article about how the Hope Now coalition claims to have helped a million homeowners. At least that is what Treasury Secretary Henry Paulson says. CNN isn’t so sure:

But of those borrowers, only 278,000 actually saw the terms of their mortgages modified. Their lenders either froze or reduced their interest rates, and may have reduced their balances as well to make loans more affordable.

Let’s think about this for a few minutes. According to the guys over at the Census Bureau, there are roughly 303.5 million Americans right now. That number of course rises every minute. Also according to them, roughly 69% of homes are owner-occupied — we own it, or someone we live with does.

Mr. Paulson is asking us to believe that one out of every 304 people has been helped by Hope Now. If you were to fill Robert Kennedy Memorial Stadium with random people, you should be able to find roughly 186 helped by Hope Now; if you filled it with only random homeowners, you should find about 271 people. Doesn’t that seem a bit high to you? Could it be that Mr. Paulson is counting all the way back to the inception of Hope Now’s helpline in 2004?

And where are these people? I am sitting in a metropolitan area where 9.87% of our 22,000 current listings are the Repo market — that’s over 2100 properties! Where are they? How are they helping people in Cleveland, where things are even worse?

The President told us in December that Hope Now was prepared to help 1,200,000 homeowners. If Mr. Paulson’s numbers are right, does that mean we are rapidly coming to the end of what they can do a mere 4 months later?

And what exactly is Hope Now doing to help these people if they are not actually getting loan terms modified? Mr. Paulson admitted that “Loan modifications alone increased 19% from December to January….” Fewer than 1 out of 5 people being “helped” actually got anything that would make their loans more affordable in the long term. Do you count as being “helped” if you call and tell them a sad story? How about if they “help” you by telling you it’s time to consider a short sale, or mailing the keys to the bank?

And one last thing. “Everybody” agrees that none of these mortgage assistance plans should help investors, that they made their beds and should lie in them. So what about the renters those investors leased to? They will most likely lose their homes too, often with only 3 days notice. Do you think you could coordinate finding a new home, packing everything you own, and moving in 72 hours? Probably not, and neither can they. Every day someone in my office deals with the collateral damage of this problem. Where is Hope –Now or any other time — for them?