I’ve been doing a weekly report of the Vegas real estate market for over a year now. This is the first in a new set of informational offerings. The month-end luxury housing report is likely to evolve to meet the needs of you and my clients, so please put your suggestions in the comments!

Entry Level Luxury Available Properties: In the $500,000 to $1,000,000 price range, there were 545 available properties, none in Auction status. Median price was $695,000; median size was 3703 square feet, and median time on market was 181 days. A total of 71 are noted as short sales, 26 are bank-owned, and 444 are non-distressed sales. There were 12 condominiums, 3 manufactured homes (pricing is justified by lot size), 526 single family homes, and 4 townhomes.

Mid-Range Luxury Available Properties: in the $1,000,000 to $5,000,000 price range, there were 458 available properties, none in Auction status. Median price was $1,762,500, median size was 5832 square feet, and median time on market was 240 days. Of these, 24 are short sales, 15 are bank-owned, and 417 are non-distressed sales. There were 1 condominium, 1 manufactured home (on a 3+ acre lot), 456 single family homes, and no townhomes.

High-End Luxury Available Properties: in the $5,000,000 and up price range, there were 43 available properties, none in Auction status. Median price was $8,750,000 (highest price was $18,500,000), median size was 11,255 square feet (highest was 25,924 square feet), and median time on market was 328 days. There were no condominiums, no manufactured homes, 43 single family homes, and no townhomes.

Features of Available Luxury Properties: Of our total 1041 luxury properties currently available, 419 had at least 5 bedrooms. All had at minimum a 3 car garage. 711 featured a private pool. 672 are less than 10 years old, while only 66 are over 30 years old. 728 are in gated or guard gated communities. 50 are in age restricted communities. 363 are on country clubs or golfing communities. 107 are on lots bigger than on acre. 56 are equestrian “horse friendly” properties.

Contingent and Pending Luxury Properties: There are 259 Contingent and Pending properties under contract to be sold. 209 were Contingent (inspections not yet completed, short sale approval not yet obtained, etc), and 50 were Pending. 216 were Entry Level, 43 were Mid-Level, and none were High-End. Median price was 650,000, median size was 4258 square feet, and median time on market (before accepting a contract) was 69.

Closed Luxury Properties: We had 64 closings in the last 30 days and 174 year to date. Of properties closed this month, median list price was $697,000, median sales price was $632,500. Luxury property is one of the few areas of the market where sales price is less than list price at the present time. Median size was 4072 square feet. Median time on market was 53 days, 190 days including the contingent period.

To find out more — or find a special property of your own –  call me today at 702-727-7842 or email bmagnus@bridgetmagnus.com. Although this information is available to all GLVAR members through the MLS system, this article was written and copyright by Bridget Magnus, and is her sole property.

Not very long ago, it was common to have a second mortgage just to avoid private mortgage insurance. The first mortgage would be the traditional 80% of the purchase price. The second could be a conventional, ARM, or even HELOC for 10% or even 15% of the purchase price (MSN seems to think these are still available, but I don’t know any local mortgage brokers who do them). Many people used this sensibly to pad out the finances during a big move, and paid off the second mortgage after their previous house closed. Of course this isn’t the only way people used second mortgages: many others used their homes as an “ATM” to pay for home improvements, open businesses, and whatnot.

The point is that there are a lot of second mortgages out there and that is making refinancing, modifications, short sales, and all other foreclosure avoidance measures difficult now.

There is good news, sort of. The latest adjustments to the Federal foreclosure avoidance programs include a provision to make sure the holders of the second mortgage get something, even if it isn’t very much. It does put principal reduction for both first and second mortgages on the table, too. The hope is that 3,000,000 to 4,000,000 foreclosures can be prevented over the next 3 years. That sounds like a lot until you realize that experts like Lawrence Yun expect that many foreclosures this year alone. Given Mr. Yun’s track record, I consider that an optimistic number. Some experts think that as many as 12,000,000 homes are “at risk.” Only preventing a quarter to a third of those foreclosures is merely a smaller catastrophe for families and communities as well as anybody who works in banking, real estate, or the construction trades.

While it is certainly true that we aren’t going to work through this mess without addressing second mortgages and the fact that market value of most American homes are far below what they are mortgaged for, this is only a first step. Some think it doesn’t go far enough, that bankruptcy law needs to be amended to account for this sad reality. Others wonder how far Washington can or should go, when it is clear that nobody can prevent all the coming foreclosures; they wonder what will happen to those of us who followed the rules, and exactly how long we should let this failed government initiative continue to operate.

As for myself, I think the banks are part of the problem, and have been for some years due to the unique banking combination of bureaucracy and pursuit of profit. It is important to put in place good procedures for short sales and modifications and insist that everyone abide by them. Failure to do so will insure more foreclosures, collapsing property values, no incentive to build anything, and great incentive for those of us who “played by the rules” to walk away. But the hard part will be convincing the bank to stop pretending that the loans on their books are worth face value. If you own stocks, you know what you paid doesn’t change what it is worth now. Banks are still pretending they can get full value out of homes that are worth half that — thanks in part to the predatory pricing tactics of banks on other foreclosed properties! This will of course be big trouble for banking profits.

Once again it turns out that the problems in foreclosures and in banking are related and must be tackled together.

Yesterday, Bank of America finally took a painful step regarding their mortgage portfolio. They realized that they are going to have to write down principal balances on some of them. B of A is the first “too big to fail” bank to take this step although some smaller institutions have already started doing this.

Now, don’t pick up the phone to pester Customer Service about it just yet. This program is only open to a limited number of qualifying homeowners who have option ARM, 2-year hybrid, or certain types subprime mortgages. Most of these were in fact written by Countrywide. This is estimated to be only about 45,000 loans total.

One interesting detail is that this plan was developed in cooperation with the Commonwealth of Massachusetts (did you know that Massachusetts wasn’t just a “state”?). Was there perhaps some legal arm-twisting? Will homeowners outside Massachusetts be able to take advantage of this program?

Right now, B of A has some huge image problems when it comes to distressed properties: it’s difficult to make a short sale work, and sometimes there are difficulties after closing; they have a reputation for foreclosing on the wrong address; I still see many listings that require pre-approval with B of A before you are allowed to place a purchase offer on one of their properties (right, because they will be so much better a judge of this buyer’s ability to pay than they were of the previous owner); they are also one of the culprit banks I see destroying neighborhood housing values by pricing foreclosures at absurdly low levels. In short, they are one of the reasons Alan Greenspan calls our housing prices “fragile”.

The bottom line: I hope my fears are unfounded and that Bank of America does this right. More, I hope they realize that they can take care of a lot of future balance sheet pain by writing down principal widely in areas that have been hard hit by housing value declines.

Welcome (or welcome back) to Friday Figures! All information from the GLVAR MLS system. Here is what you and your Realtor need to know before touring, making an offer, or listing a home in the Las Vegas Valley this weekend.

Summary: Available inventory dropped just a little more to 10,562 units. To keep things in perspective, that’s just over half of what we had a year ago! No surprise that with available inventory down, pending and contingent inventory is up, now over 15,000. Of course, about 2/3 of those are short sales; when will they close, if ever? Sales continue to close at a brisk pace, and it is worth noting that median sales price was higher than median listing price! This is not a time for serious buyers to make low-ball offers. Rental inventory has been shrinking, giving rise to hopes that some new owners are planning on renting out their properties.

Other Information: A million homeowners are now in modifications, but only about 170,000 of those are permanent. Without permanent modifications, those homes stand a very good chance of becoming future foreclosures. As more sub-prime and variable rate loans reset over the next 2 years, this will become a more important issue. Some experts think that working through foreclosures — probably something on the order of 7 million more of them — is the only way to get back to a healthy housing market. However, there are signs that we are closer to the end than the beginning of our housing problems.

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You may recall that some time ago I wrote about how important it is to re-key the locks on your new home after closing. This is even more important on bank owned homes because most of them are keyed to a “master” key. The Department of Housing and Urban Development is much like a bank in this respect, except that instead of sticking a key into a lockbox, there is a “HUD key.” This means that HUD officials can access any of the roughly 600 homes they own in our local market and the thousands of homes they own nationwide. Realtors can apply to have a HUD key so they can show any units that are currently for sale.

But what happens if one of those keys falls into the wrong hands?

Here in Vegas, at least one person is posing as a real estate licensee with a HUD key. This person is showing the home, taking rental applications, and taking a deposit for a home that is owned by HUD. The scammer pockets the money, and the would-be tenant is left with a lighter wallet. At least we do not have reports of people moving in and paying rent until the Feds show up to evict the trespassing “tenant” — yet.  Similar scams are occurring elsewhere in the nation.

So how do you avoid being a victim of such a scam? First, meet your Realtor at her office, at least the first time. Ideally, she should want to meet you there too! Not only are there safety concerns, you will see that she really works there. A good Realtor will also want you to take a few minutes to sign a paper called “Duties Owed by a Nevada Real Estate Licensee,” or “duties owed” for short. This form doesn’t obligate clients, but talks about the ways the real estate agent is obligated to the clients. It’s a required document for any purchase, listing, or rental, so consider it a sign of her professionalism that she wants to let you know what duties she owes you up front.

Second, take a few minutes to find out who owns the property you want to rent. The records are held by your county recorder’s office. Here in Clark County, you can search online. If it is a bank, FNMA, HUD, or a government office, do not put down any deposit! These properties are almost never available as rentals, so you should consider it a scam until proven otherwise.

While I am fully licensed to assist renters, I do not handle rentals at this time. If you have rental property needs, I will gladly refer you to a colleague who specializes in them and does them right.

Lead poisoning is serious stuff, particularly for children under the age of 6. And sadly, children this age are more likely to come in contact with dust contaminated by lead simply by doing the things little kids do. HUD recommends a pretty rigorous cleaning regimen for older homes to minimize the risks of lead poisoning.

Lead abatement — the process of getting rid of the lead altogether and properly disposing of it — is an expensive proposition. However, yesterday HUD announced that they will award $13,000,000 in grants for 25 local projects including lead abatement, research, public education, and related activities.

Lead paint has not been put in American homes since 1978, but there are still a lot of homes that have lead paint contamination. The Department of Housing and Urban Development (HUD) estimates that number at roughly 24,000,000 homes. Under federal law, the buyer of any home built before 1978 has to be warned of the possibility of lead contamination, if the seller knows about lead based pain he must disclose it (even institutional sellers like banks must sign this disclosure), and all buyers must receive this pamphlet on the dangers of lead based paint (PDF).