To be brutally honest, I don’t think things are as bleak as the nice people from the Huffington Post would have you believe. And I find their closing example insulting: a man who just can’t find people to sell fire extinguishers door to door in the desert heat in the middle of summer for what probably works out to less than minimum wage. I’m not lining up for that job either. It is true that we lead the nation in foreclosures, but it’s also true that foreclosure filings are down 15% from last year. The crush of foreclosures and short sales (and the expiration of the buyer’s tax credit) has driven prices down slightly since April. Nevertheless I’m hearing ads for real estate investing seminars and getting ads in my email, so clearly some people think it’s time to take advantage of these lower prices.

It’s also true that the drop in housing prices has meant that Realtor’s commission checks are smaller than they used to be. Strangely enough, I find it encouraging for the Review Journal to print quotes like this:

“So you’d better have a different job because there are 12,000 agents and maybe 500 or 1,000 are making it along and the others are not,” [Real Estate Agent Joe Stewart] said.

Actually there’s over 16,000 licensees in Clark County according to the Real Estate Division. Not all of them are Realtors. As peculiar as it seems, I am looking forward to seeing the number of Realtors in the Valley decline. Hopefully the ones of us that are left will be the smartest and the best.

Thanks for reading Friday Figures! All information from the GLVAR MLS system. Here’s what you really need to know before touring, listing, or making a purchase offer this weekend.

Summary: We’re up to 12960 available units, just under 13,000 and about a 30% increase from the low we set earlier this year. No surprise that prices are under downward pressure. Contingent and pending listings are down, however, and we may eventually work through the huge backlog of contingent short sales one way or another. 600-700 closing properties a week seems to be the “new normal” for a little while, but I do expect more closings this coming week as banks try to clear the July books.

Other Information: Unfortunately, the economy is of great concern going forward. Nevada unemployment is at 14.2% and in the Las Vegas Valley it’s 14.5%. Builders are also nervous about the economy. Home sales are slowing nationwide — which the experts did anticipate after the home buyer tax credit expired. This week has also seen a lot of criticism of how few people have really been helped by the HAMP program — and a few pointing out how little help it is to some of the people who have gotten modifications. There is still some good news to report: mortgage rates are at yet another all time low; many Clark Country residents got lower property tax bills in the mail this week (which may result in budget shortfalls, but that’s another issue); and apartment rents are down. So far I have seen no real drop in rental home prices, partly because those owners have fixed expenses and a slightly different business plan.

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The headline over at the New York Times is “Seeking a Mortgage? Don’t Get Pregnant“. Over at CNBC, the same article is called “Need a Mortgage? Don’t Get Pregnant.” The gist is that if you are expecting or on maternity leave, you aren’t getting a mortgage because their “income has temporarily fallen while they are on leave.”

The problem is that Familial Status, including the presence of children under the age of 18, is a protected class under Federal Fair Housing Law. In fact, HUD says “Familial status protection also applies to pregnant women” right on their website. So these lenders are treading on very, very thin ice.

Perhaps that’s why the oncologist whose example is used in the NYT/CNBC article got her loan approved after her real estate professional had a polite chat with the loan officer. Nobody wants a $10,000 fine. Per incident.

Like all Realtors, there are a few niches and neighborhoods that I specifically track. What I am seeing in these micro-markets isn’t particularly pretty. I’ve noticed a bunch of listings fall out of contingent status and become available again — usually with a hefty price cut. While I am not party to these listings, often the “agent to agent remarks” will tell you, either directly or indirectly, what happened.

The most common reason is a problem with a short sale: either the “short sale approval” was more of a “short sale declined,” the bank decides they want a substantial amount more than the contract amount, or the buyer decides they’ve had enough waiting and they walk away. At least banks are working through the backlog of short sale approvals. That’s the only silver lining here.

The other common reason I am seeing for properties going back on the market is inspection/appraisal problems. Particularly when it comes to bank owned properties, some of our inventory is kind of beat up. Homeowner renovations with no permits are called out as the obvious disasters they usually are. Underwriting requirements to fix something (for example, a failing roof or broken windows) come to loggerheads with institutional owners who insist that the property is sold AS IS with NO REPAIRS, and yes, that’s often in capital letters in the contract. Inasmuch as I have seen conventional loans held to FHA standards recently, this problem isn’t going away.

Another sign that the market is slowing down: I am starting to see a few bank owned properties that are reasonably priced and in decent condition sit on the market for 2 weeks and then cut the price. This is something I haven’t seen happen in about 18 months now. It does mean that some institutional sellers are serious about getting these properties off the books. It also means we aren’t seeing as many buyers as we did 6 months ago. So while prices may have ticked up a bit in May, they are ticking down now.

I’d like to leave you with just a few items on foreclosures, short sales, and mortgage modifications. Some short-sighted people are pushing to hold you responsible for a foreclosed mortgage — in effect manufacturing a personal guarantee after the fact — despite the fact that a mortgage is secured with a real asset. In some cases, and I am begging you to consult a lawyer if you think this may apply to you (Are you in Nevada? I’ll recommend one!), bankruptcy may leave you in a better position than a foreclosure. The MERS mess gets worse, but you won’t be able to take advantage unless you are in bankruptcy or a state with judicial foreclosure. Massive equity loss means that severely underwater homes are now almost everybody’s problem (short sales aren’t going away any time soon). And finally, if you are negotiating a loan modification or short sale, please make sure your negotiator is in regular contact with the loss mitigation department, the foreclosure department, and the trustee!

Thanks for reading Friday Figures! All information from the GLVAR MLS system. Here’s the real scoop that you and your Realtor need to know before touring, listing, or making a purchase offer this weekend.

Summary: The number of properties for sale rose yet again to 12,266. We are seeing clear signs of fewer buyers now that the tax credit is over. The rise in the number of available short sales is dramatic. One obstacle to clearing the inventory of very low priced homes is that financing such properties is almost impossibly difficult. The number of properties under contract to be sold did drop slightly as more of them moved on to closing. There’s still over 14,000, and most of them are still waiting for short sales to be approved. The number of properties that closed in the last week plummeted, as most buyers (and some sellers) pushed hard to close before the end of June. While the year to date sales figures are not as high as last year, they are far above 2007 and 2008 levels.

Other Information: I’m not sure what to make of ABC’s report that “liar loans” are making a comeback. Nobody thinks it’s a good idea to sell people a house they ultimately can’t afford, but many people in Las Vegas make more money in tips than in salary! Wells Fargo is completely shutting down its sub-prime operations, so be prepared to show them lots of documents to get a mortgage. Rates are down again to a new record low, and as a result mortgage applications are up. Good news for our local economy is that hotel occupancy nationwide is up; our economy relies heavily on tourism. Another bit of good news courtesy of our reader Jacob, General Growth will very likely sell over 7 acres of land for a high-tech manufacturing facility. This will bring construction jobs now and tech manufacturing jobs for years to come. And finally, nationwide, apartment vacancy is down, and rents are up. The theory is that the economy has improved enough that people who had roommates are moving out on their own.

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Office vacancies are up to a 17 year high at 17.4%. Obviously, a quick look at inventory will show you that some buildings have higher occupancy than others, and that the usual factors are at play — price, location, lease terms. That building in poor repair, or with unreasonably high rents and other costs, or in the middle of nowhere, or with security issues, or with a lousy allowance for tenant improvements is going to have a lower occupancy rate (higher vacancy rate) than a building without those problems.

Nevertheless, what is bad news for investors may be great news for new and/or growing business ventures. High vacancy puts potential tenants in a great position to negotiate a favorable lease.

While commercial real estate is not my area of expertise, I will gladly refer interested parties to a qualified licensee.

FHA financing has become very popular over the last few years, as it allows buyers to put as little as 3.5% of the purchase price as a downpayment. But many people don’t consider FHA financing because they think there are income limitations, or that they are only for first time buyers. That’s why I would like to offer you this list of 7 things you should know about FHA loans.

As far as I am concerned, the important one is the last one: FHA loans are assumable! That means that when the property is sold, the new buyer — assuming they are qualified — can simply agree to take over the existing mortgage, with the same payments and interest rates. Most conventional loans can’t be assumed. This is a great advantage in the current market. And with interest rates at record low levels, it is worth considering an FHA loan now to lock in that rate for 30 years. It could make your property more desirable years from now when it is time to sell.