It has been brought to my attention that the Times of London did a piece on Las Vegas foreclosures. In fact, they did two! But I digress. When you have quotes like this, you really need to watch yourself:

Gail Burks, the head of the Nevada Fair Housing Centre, a citizens advice bureau, said that home rage had become common in Las Vegas as dispossessed homeowners vent their frustration. “There have been five foreclosures on my street, three of which ripped everything out. This kind of thing has an impact on the wider community,” said Ms Banks, who receives about 600 requests a month now for advice on foreclosure, compared with about 200 in October last year.

There are 28,655 vacant properties on the market in Las Vegas as a result of foreclosure, Ms Banks said. Elsewhere, planned residential houses have been put on hold as demand and financing evaporates.

Needless to say, when someone starts tossing around extremely specific factoids that tend to indicate that there are thousands of vacant, bank owned properties just waiting to hit the market, I have two thoughts. First, “that sounds unlikely.” Followed by “But if it’s halfway true, there is a terrifying opportunity out there.” Now, those of you who followed me over from ShortWoman know that I am trained as a researcher. So I did some research.

First up, let’s decide how to spell the woman’s name, shall we? Burks or Banks? The editor let this pass? A quick visit to the Nevada Fair Housing Center’s website gives us a good place to start. I mean, beyond the fact that gratuitous sound in a website is never a good thing. According to their annual report, the woman’s name is Gail Burks.

The other thing you may have noticed about that annual report is that it’s from 2004. In fact, the most recent changes I can find to the site are from 2006, in the press releases section. Speaking of press releases, I am not seeing anything from which the Times could have gotten their “data” in this section.

I continued poking around the internet, and found this gentleman’s excellent two-part “deconstruction” of the Times’s article. Here’s the best part:

That’s a good one.

First: There are only 22,434 units available for sale in Las Vegas, as of the 5/17/08 GLVAR MLS database.

Second: Many of those aren’t vacant.

Third: Probably less than 10% of these for sale units have gone through foreclosure. (That’s not to say there aren’t a LOT of foreclosures in the pipeline.)

Now, these numbers are good but not without fault. I don’t have the May 17 GLVAR MLS figures in front of me, but I do have figures from earlier in the month. And according to those, about half of the roughly 22,000 available properties in the MLS are vacant (~11,000). Furthermore, about 19% are marked as having been through foreclosure (in round numbers, 5500). It is safe to say that all these are vacant. Still, 28,655 minus 5500 is roughly 23,000 homes unaccounted for.

I am willing to believe there are maybe 1000-1500 bank-owned properties that have not yet hit the MLS, but I am not willing to believe that there are 23,000 properties that are foreclosed, REO (“Real Estate Owned” is the line on the bank’s asset sheet for these properties), vacant — and yet the bank is doing nothing to sell them. If this were true, not only would there be 4 REO homes sitting on the bank’s asset sheet costing them money for every one they have on the market. It would also mean that the banks are collectively able to double the number of homes on the market. As I said, a terrifying opportunity.

It is only fair to mention that roughly 25% of the homes currently in the MLS are “Short Sales”. Many of them are vacant. Many of them have already received a NOD — Notice of Default — that starts the foreclosure process. I point this out even though it doesn’t really get us any closer to that alarmingly precise 28,655 figure Ms Burks allegedly cites. Remember, I still can’t find any actual source for that; she may have said it over the phone to a Times reporter.

But this is even more damning: remember that CNN article where we learned that 1 in every 44 Vegas homes is in foreclosure? And remember, that figure represents homes in every stage of foreclosure from Notice of Default to bank owned; many of these will still be occupied. 28,655 (vacant due to foreclosure homes) times 44 (homes for every one in foreclosure) is 1,260,820 total homes. Only 1.9 million people live in Clark County, and 283,221 are students in Clark County School District (unlikely to be homeowners).

Furthermore, in December of 2008 there were only 581,495 single family homes, 19,317 multi-family homes (condos and apartments), and 28,457 manufactured homes in the county according to the assessor’s office, which ought to know these things. The Times asks you to believe that one out of every 22 homes is not only in foreclosure, but vacant as well. While it may seem like this is plausible in some neighborhoods, it does not play out over the entire metropolitan area.

I am beginning to think that in addition to getting her name wrong, they may have misquoted her. Perhaps she said 8655? Perhaps the figure she used was for all of Nevada? Perhaps the Times should retract the article or get their facts straight.

In Florida, work is underway to syndicate a little reality show called The Foreclosure Shoppe. It follows the wild adventures of Realtor Tom Bruzzesi as he navigates the tricky waters of the REO world of bank owned property. His competitors call him “The Maniac.” As many strange things as I have seen, I can only imagine the weird things he encounters every day.

Also in Florida, the New York Times tells us about some enterprising guys who have set up business working on foreclosed properties. They inspect, secure, maintain, repair, and sometimes even clean up these properties for the banks that own them. Unoccupied homes can deteriorate quickly, particularly when helped along by vandals, moisture, and abandoned animals. On the other hand, banks have discovered that a few hundred or thousand dollars paid to companies like this can prevent problems and municipal fines, help them sell the property quickly, and in the end, save money.

Anyone want to bet on whether these guys know “The Maniac” by now?

Today, tech news community Slashdot brought us a story from the British news site The Register: a company called Switch Communications — which calls itself “The #1 Rated Disaster Avoidance Colocation and Bandwidth Interconnect Facilities in North America” — is building one of the largest data centers in the world. It’s called the SuperNAP. Here’s more coverage from C|Net, Techbays, and Broadband Reports.

If that was “All Geek to you,” collocation is nothing more complicated than putting your computer servers on somebody else’s property. Not only does it ensure that somebody with real tech savvy is there should anything go wrong, but it’s great insurance against natural disasters. Las Vegas doesn’t have a lot of hurricanes (this site is from a guy who rode out Katrina in a collocation center), tornadoes, tsunamis, or things like that. Our flash flooding problem — this fire truck was just minutes from my home and office — has been sharply reduced if not eliminated in all but the most serious of storms by a series of drainage canals under the city (these canals were a critical plot point in at least one episode of CSI). Although Nevada does have some earthquake activity, we have a lot less than California, and most of it is nowhere near Vegas. Knock on wood. NAP is an acronym for Network Access Point; a SuperNAP would be a really, really big Network Access Point!

How big would it be? How about 407,000 square feet with 30 cooling towers and over 7000 server cabinets! Here’s more:

The SuperNAP will cost about $350m, and be about the same size as Google and Microsoft’s $500m data centers. Roy, however, thinks Switch can pack about four times as much computing power in the SuperNAP as these rival centers thanks to the cooling systems and energy supplies.

The irony of putting all this cooling power into a desert area where summer temperatures routinely hit triple digits for weeks on end! Perhaps they will use solar power?

Granted, $350 million is a lot less than the $2.7 billion ($2700 million) it cost to build the Wynn Hotel/Casino, but it will doubtless have a positive impact on our local economy, and put a lot of very smart techie-types to work.

I’ve updated the links, and added a section for Realtor Resources. Some of the other new additions include Frugal Vegas and the personal blog of former Secretary of Labor Robert Reich. One of his recent posts is on the housing bill currently in Congress.

Thinking of the Children:  Child advocacy group First Focus has reported that roughly 40,000 Nevada children will be affected by foreclosure.  This is part of 2 Million kids nationwide. Meanwhile, there are about 2,000 homeless teenagers in Las Vegas. Efforts are underway to get them “survival kits” that include “hand wipes, anti-bacterial hand gel, a toothbrush and toothpaste, shampoo, deodorant, sunscreen, bandages, socks and snacks.”

Looking for a really unique Vegas home?  Well, one is to be auctioned off in early June.  The garage alone is 6500 square feet, 2 to 4 times the size of a typical local family home.  The home itself is 9500 square feet on 2 acres.  Open house this weekend!  Opening bid is only a half million dollars, or $53 per square foot — excluding the garage. Twice this price would be a bargain by any local standard. Here’s a gallery of pictures.

“We must all hang together, or assuredly we shall all hang separately!“  (Quote from Ben Franklin): The Christian Science Monitor asks whether taxpayers will end up paying for the subprime mess one way or the other.

At least there’s one good consequence:  Our current real estate troubles are helping conservationists, both by scuttling projects in environmentally sensitive areas, and by making it easier for areas to be converted to parks and other conservation areas.

And finally, a cartoon:   “moral hazard.”

Have a terrific weekend, everybody!

Remember some months back that the Tropicana begged workers to put off actually depositing their paychecks? Having lived through The Great DotCom Boom and subsequent bust, I know that this is a great big, glowing “get out now” red flag for any company’s prospects.

The inevitable has happened:  Tropicana Entertainment LLC is declaring Chapter 11 bankruptcy.  This does not mean they will be closing down — Reuters makes sure to tell us that the casino remains open! They will be renegotiating $2.8 billion in debt, and the Atlantic City casino will be sold by the State of New Jersey. For the ultra-short version, try this “just the facts, ma’am” rundown.  For more links, try our friends over at Vegas Happens Here, and don’t forget his great commentary on the bankruptcy filing itself.

This is part of a huge jump in the number of American corporations filing for bankruptcy.

TheStreet.com asks and answers 5 Questions about the Mortgage Crisis.

Although you know my opinion regarding the local real estate market*, the question remains whether nationally speaking, we are at or near a bottom. Some people say yes. Some people say no.

* Inventory is slowly dropping, sales are slowly increasing, prices may continue to drop for another couple quarters.

If you’ve ever purchased a home, you have had a Realtor tell you that you should get a home inspection. Even if you rent or lease property, you may have had to open your door to an inspector performing “due diligence” as part of the landlord’s purchase/sale of the property. When you are spending hundreds of thousands or even millions of dollars on something, it only makes sense to make sure all is as it appears to be, right?

Well, as real estate values have declined, taxable values have declined in many places as well. The result is that many local governments are getting squeezed by lower revenues in a time where prices for just about everything but housing are going up. If you look closely, even the Fed has had to admit this was so. And in turn, that means local governments are having to cut corners here and there.

That brings me to today’s local newspaper, which informs me that Las Vegas Has Scrapped Some Structural Inspections. As nearly as I can tell from the limited scope of the article, the inspections involve the blueprints and plans rather than physically going on site and looking at the structure. I welcome comments from anyone who can correct me on this point, and will update this article accordingly. Honestly, I’m not worried about the safety of “strip malls… and big box stores” — the owner has too much to lose if it collapses and so much as injures a single person — but I have a little concern over the exemption for “tract homes”. Homeowners often don’t do the same kind of preventative maintenance that commercial real estate would have; not a big deal over the course of 5 years, but what about 20 years? A small problem can easily become a big one reaching across an entire neighborhood of homes in that time. At least one local lawyer “believes the city’s cost-cutting move could create more problems for local residents. He suggested eliminating the reviews would lead to more litigation over construction defects.”

While many experts feel that these inspections were duplicating inspections that also occur on the state and/or county level, it’s still a good idea to remind everyone that the last line of defense when it comes to avoiding a real estate nightmare is the property inspection.

Of course, there are some things that you can look for yourself and decide whether a property is even worth considering. Your level of “handiness” and willingness to do a lot of repairs will of course come into play. That being said, here’s This Old House’s Tommy Silva on What to Look For Before the Home Inspector Arrives and 18 Red Flags from Samuel Tamkin, who notes that “Of course, all of these problems can be fixed but for a price.”

As for choosing an inspector and what that inspector will do, here are some resources to get you started. Your broker’s office may have a list of inspectors that they have done business with in the past, and more information about the inspection process.

It’s a Caveat Emptor kind of world out there. Protect yourself with a property inspection when buying real estate.