While homebuilder confidence remains near a record low, it turns out that actual housing starts are up 22% mostly due to apartments (official Census report). It sounds like the homebuilders have put in a “panic bottom”.

Renters, beware of the NAR lease scam. “In this scam, rental property is offered to consumers, who are led to believe that NAR is functioning as an intermediary to receive rental deposits from prospective tenants and, upon receipt of the deposit, to deliver the keys to the property to the tenant. The tenant is instructed to send money via Western Union to NAR’s purported agent, in the United Kingdom. NAR is not involved in this business and believes it is a scam.” At least it isn’t Elvis. 

A new HUD and DOT initiative is designed to tackle both housing and transportation costs at the same time. Many Americans have found themselves in a situation where they can’t really afford to live anyplace near their work. This is expensive and stressful for the entire family. 

This morning, I was forwarded a report on average closing prices here in Clark County. No shock that prices have declined again and foreclosure sales are up.  Prices are down roughly 60% from their peak, and have declined for 11 straight months. But the rate of decline is slowing. Greed and fear say to wait for prices to fall more, but the fact is that we won’t know where bottom is until prices begin to rise again. That’s one of several reasons I track not only average prices, but the number of homes in various price ranges.

At least we aren’t in Detroit, where the median home price is $7500, roughly what you would pay for a Hyundai. Yet more evidence that housing markets are fundamentally local, not national.

And one last item, how to spend time in Vegas without spending money.

I hope everyone will join me tomorrow for Friday Figures!

In the meantime, if you have a real estate need, please be sure to click the “Contact Me!” link in the sidebar, or just call the phone number at the top of the page.

Forbes noticed that the Las Vegas real estate market has turned:

Something funny’s happening in Las Vegas. Home sale prices from last year are down 28%, but home sales are up 15%.

The reason? Motivated sellers–those in distress or foreclosure–or banks with too many homes on the books are slashing asking prices in order to unload their properties. Motivated sellers in Las Vegas accounted for 64% of sales in October, the highest rate in the country according to Radar Logic, a New York-based derivatives firm that provided the data for this story.

That means buyers are getting deals and hastening Las Vegas’ recovery. In fact, buyers are eating up inventory fast enough that the discounts offered by motivated sellers are tightening as supply contracts. The difference between what motivated sellers have to offer and what non-motivated sellers can command has held steady for three months at a 17% discount, versus the 33% national average. So while it’s still a buyers’ market, prices have dropped to a level that’s stimulated demand.

“There’s a pretty active housing market, it’s simply at a lower-priced inventory,” says Michael Feder, chief executive of Radar Logic. “And there are now bidding wars taking place over homes in foreclosure.”

Prices in general have sunk to 2004 levels.  In some neighborhoods, homes are selling for about what they cost in 2002.  This is a level where it makes sense to buy, particularly if you can take advantage of the tax credit for first time buyers. Remember, you have to buy before the end of June to get it!  You’ll also have to act fast if you want to take advantage of the record low mortgage rates available;  we’re talking under 5%. 

The rest of Forbes’s list of real estate bargain zones is right here, but remember, our median home price is only $211,600 — less than just about anyplace in California. According to my mortgage calculator, you could be buying a median priced home for less than $1200 per month. 

For help finding your ideal Vegas home, call the phone number at the top of the page, or click the “Contact Me!” link in the sidebar.

The other day, I was visiting with the loan officer at a nearby bank branch. He had an interesting flier on his desk. “The joy of working for a Fortune 500 company is that they send all kinds of marketing materials, but this is all I need,” he told me. This flier had a little chart showing how over the course of years, your rent checks add up.  Even a modest sum like $600 per month adds up to $72,000 over only ten years, and $216,000 over thirty years! Boost that to $1000 per month, and you have paid $120,000 in ten years and $360,000 in thirty years.

Now make no mistake: renting is still the best option for a lot of people.  For example, if you only expect to be in an area for a year or two, renting is the way to go.  There are also people whose credit or money situation dictates that they must rent. I have nothing against renting, renters, or apartments.

However, we have a situation here in Vegas where renting is turning out to not be cost effective for many people.  Almost 2 weeks ago, I wrote about the 800 condos currently available for less than $100,000. Today, I ran the numbers on single family homes.

Despite the fact that Vegas home sales were up substantially in 2008 compared to 2007, we still have roughly 17,300 single family homes available today. Of those, 1,930 are priced at $100,000 or less. Only one was in an age restricted community. A total of 1869 are actually in the Las Vegas Valley;  the remainder are in outlying areas such as Pahrump, Mt. Charleston, or Boulder City. 

When I talked about condos, I eliminated the ones that were under $50,000 from consideration: they almost certainly need a lot of work to be habitable, and they almost universally won’t qualify for FHA financing. When we do that to our pool of single family houses here in the Valley, we find 1,664 homes priced between $50,000 and $100,000.

I wanted to know more specific information about these houses, so I narrowed the search to homes in the Northwest part of town for the sake of simplicity. There were almost 60 of them. It turns out that these houses ranged from roughly 900-1800 square feet, and sat on lots that measured roughly 1700-8000 square feet — a huge range. The vast majority were 2, 3, or 4 bedroom homes, but there was one 5 bedroom home. All had 2-3 bathrooms. Most had garages. There were even 2 that had swimming pools. Sure, it’s a safe bet that they need paint and carpet and maybe some repairs. 

Interest rates are still pretty close to what they were at the first of the year. We are still talking about being in an $80,000 mortgage for less than $500 per month, with perhaps less than $3000 in out-of-pocket closing costs — which can even be a gift from a family member — and a nice juicy tax credit for first time buyers. If we look at a $150,000 mortgage, the principal and interest is still roughly $850, well within the budget of someone currently spending $1000 per month in rent.

If you are planning on staying in the Valley a few years, and you are spending more than $600 per month on rent, you owe it to yourself to see if one of these homes might be right for you. If you are an investor, you have a great chance to either “fix and flip” or put together a portfolio of rental properties. 

That knocking sound you hear? It’s opportunity. 

To learn more about these homes, evaluate your housing needs, or discuss a purchase, please contact Bridget Magnus. Click the “Contact Me!” link or just call the number at the top of this page today.

I’ve been studying the latest information on the Las Vegas housing market. This week, we had just under 17,000 single family homes available, and an additional 4500 condos and townhomes. Sure, prices are down almost 30% over last year, but actual closed sales are up over 40% from last year. That’s simple supply and demand: prices dropped low enough to stimulate demand.

I am still concerned about the fact that rental inventory is pretty slim, but it’s up from where it was a couple months ago as investors are starting to snap up some fantastic deals in the under $150,000 range. This is in turn creating a competitive market for young and working-class people who are using this opportunity to purchase their first home in the mid $100k range. “Lowballs” just aren’t being taken on homes listing below about $250,000.

While Concordia Homes is not going out of business, they will cease selling homes in Nevada.  They will be returning deposits on homes where construction has not yet begun. Five active subdivisions are being shut down. Here’s an interesting quote from Dennis Smith of Home Builders Research:

This is not strictly about demand. This is also credit. You’ve got buyers and you can’t get loans approved. What do you do? You close subdivisions.

Clearly the “credit crunch” will impact the recovery of our housing market. In this case, it’s reducing future inventory.  While this seems like a good thing for right now, I am forced to wonder if it will still be a good thing a year from now.

According to the Prof, Nick Cage is selling his Vegas home. Of course, Prof has a couple details off.  According to the listing as seen on remax.com, it’s 14,306 square feet on a 15,682 square foot lot.  It does have 7 bedrooms, but only 5 full baths, two 3/4 baths, and a half bath.  For $9.95M, Mr. Cage will throw in the furnishings.  In addition to a fabulous view, the MLS shows that the home features a sauna, steamroom, private movie theater, generator, and an elevator.

I sure would be curious what Mr. Cage has parked in that 16 car garage.

Here’s BondDad on Freddie and Fannie.

Or perhaps you’d rather read TheStreet.com on IndyMac (if you have any pending business with them, you’d better give somebody a call first thing Monday).

And memo to the Review Journal:  all of us around the office could do without you folks making up pessimistic figures! My “trained monkey” only got about 16,500 active listings.  Maybe some went contingent between monkeys?

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!

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.

I am proud to announce that I will be on hand at the United Studios of Self-Defense Desert Shores Dojo for a networking open house on Friday, February 29 from 6-8 PM. The dojo is at 8410 W. Cheyenne, Suite #104, near the intersection of Rampart/Durango and Cheyenne in the Albertsons parking lot.

I will be on hand to answer your questions about the Las Vegas real estate market, real estate in general, local neighborhoods, and of course I will be glad to discuss helping you buy or sell a home. If you have specific issues you want to discuss with me, don’t wait: call me at 702-727-7842 today! If you would like to search listings first, click here!

Other businesses will be on hand to discuss their products and services as well. For more information, a list of businesses that will be there, or to reserve room for your business, be sure to call 702-396-9944 and talk to Miss Teri or Sensei Bryan today!