But today I want to defend some really bad pictures in a listing by a local Realtor. These were so bad, they were featured on a website that does nothing but bad and amusing real estate listing pictures. Commenters asked why on earth the listing agent actually put these pictures in the listing. One even emailed the agent to ask why she would do such a thing! Here’s the post, feel free to go see for yourself.

How and why can I defend those pictures? Because the listing agent did the right thing by posting them.

When you look at the pictures in the listing, you know this is not a turnkey condo. You know it’s going to take a lot of work before you can move in or rent it out. Before you and the buyer’s agent even drive over there you know that there’s either a broken window or a hole in the wall, you know it needs new carpet and pad, you know it needs to be scrubbed top to bottom, you know the kitchen is in need of updates, you know that to put it politely the bathroom is “in rough shape.” You will arrive with no delusions that FHA financing is possible, and in my experience it will be difficult to get any financing. You know it will take thousands of dollars and several weeks of diligent work after closing before it is habitable. What you see is truly what you get.

In short, she has saved everyone a lot of time by ensuring that only dedicated investors or truly handy individuals will even bother to look. If there were an “Honesty in Listings” award in our local MLS, I would nominate this one.

Summary: Available units are barely over 11,000 again. Notably, the supply of available condominiums and townhomes has dropped by a third in the last 6 months. The number of contingent and pending listings has stopped falling, insuring more closings in the future. The number of contingent short sales is still a concern, as many of these will not receive bank approval to move forward. Closings are solid, but a little lighter than levels we got used to before the end of the year.

Other Information: Here’s a great item on condo overbuilding. Of course it’s easy for everyone to see in hindsight, but local developers knew certain projects were doomed from the beginning. Of course 2009 Vegas property sales are up 36.9% from 2008, but we aren’t out of the woods yet. Nevada still has the top foreclosure rate at 10.17% (that includes everything from Notice of Default through bank owned and for sale) and bankruptcies are up by over 50%. While some temporary modifications are becoming permanent, some experts expect another wave of foreclosures after temporary modifications fail. Just in this morning’s news, we have found that HUD has denied a request for $367 million in stimulus funds for Southern Nevada’s Neighborhood Stabilization Program. While things are steady for now, there is the potential for storms to come.

Available Listings: There are 9142 single family homes (up), with a median price of $170,123 (down), $88 per square foot (unchanged), with median time on market of 89 days (up). In addition, there are 1926 condominiums and townhomes (down), with a median price of $83,000 (up), $72 per square foot (unchanged), and median time on market of 79 days (unchanged).

Distressed Properties: Of available listings, there are 4820 short sales (up) and 2168 bank-owned properties (down). Median price for a short sale is $129,894 (effectively unchanged); median price on a bank-owned home is $128,700 (down). Short sale listings, whether available or contingent, must be considered at risk of becoming bank owned properties. The 4053 non-distressed properties for sale (up) had a median price of $249,900, unchanged.

Single Family Home Prices: Of available listings, 180 under $50,000; 1399 between $50,000-$100,000; 4068 between $100,000-$200,000; 2199 between $200,000-$400,000; 678 between $400,000-$700,000; 239 between $700,000-$1,000,000; and 536 over $1,000,000.

Condo and Townhome Prices: Of available listings, 370 under $50,000; 877 between $50,000-$100,000; 522 between $100,000-$200,000; 147 between $200,000-$400,000; 36 between $400,000-$700,000; 10 between $700,000-$1,000,000; and 9 over $1,000,000.

Contingent and Pending listings: Of the 13396 properties in the process of being purchased (up), 10735 are single family homes with median price of $137,500 (up); 2661 are condominiums or townhomes with median price of $65,000 (unchanged). Final negotiated sales prices are confidential until closing. Of those, 8975 were short sale (up), 3245 were bank owned (up), and 1158 were non-distressed sales (up).

Recently sold: 591 properties closed in the last week, 3374 in the last 30 days, and 1114 so far this year. For properties closed in the last 30 days, median time on market was 25 days (up, time on market including the contingent period was 93 days). Median sales price was $120,200 (unchanged); median list price was $119,900 (unchanged). Short sales accounted for 675 of them, there were 2024 bank owned properties, and 667 non-distressed sales.

Rentals: 5231 homes, townhomes, and condos were available for rent in the Valley according to the MLS system. Median square footage of these units is 1396 and median rent is $1100. There are 632 contingent leases waiting to be signed and 1475 leases signed in the last 30 days.

Need more information or help with your real estate needs? 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.

Cosmopolitan’s developers also misled apartment buyers about completion delays, added units, insufficient parking and changes to the builder contract, according to an amended complaint filed in Nevada. The garage and “underground facilities are under the existing water table, requiring 24-hour pumps and containment walls,” it alleges.

It’s easy to forget that Las Vegas became a stopping place in the desert because of underground springs. Apparently that’s exactly what the developers did.

Other local projects [besides One Las Vegas and Streamline Towers] financed by Corus include Meridian ($111.3 million), Platinum ($87.6 million), Loft 5 ($56.5 million), Juhl ($106.2 million), Newport Lofts ($67.1 million), Panorama Towers ($236.3 million), Village Green ($60 million), the Residence Las Vegas ($56.8 million), Soho Lofts ($49.3 million), Copper Canyon ($43 million), Boulders at Lone Mountain ($40.2 million), Verano ($39.5 million) and Spanish Palms ($28.2 million).

At least 3 condo developments and one commercial property are likely to be sold. Of $7 billion in loans, $2 billion are “non-performing” — bank talk for not being paid. While this could be a great opportunity for a well-capitalized investor, it more likely spells future trouble for our luxury and high rise condo market.

The Review-Journal has chosen to spin our sales and availability numbers in a negative light, telling us that both sales and prices are down. However, even they have to admit that once you take pending and contingent sales out of the figures, actual inventory is down. A bright spot is the media coverage of short sales, which done right do save families and banks money by preventing foreclosure. Remember, it’s called a “short sale” because the bank will be “short” money at the end.

Foreclosures aside, we also have a big problem moving high-rise condos. This is particularly true of the developments on the Strip itself, where resale prices are down 50-70%. Great deals can be had for cash purchasers who want to be in the middle of everything.

People who signed up to buy condos in the City Center project are not very happy right now. They bought near the top of the market, and prices in general have plunged 52% since then according to Case and Shiller. Worse yet, many of the people who bought high and early were MGM executives and high rollers. Ouch.

This is more interesting than bad, but the nice folks at Rain City Guide wonder about the wisdom of spending lots of money on rooms your family doesn’t even use.

Office vacancy is up to 15.9%, and apartment vacancy rates are at at 22 year high.

And mortgage fraud is is up… or at least awareness of it is.

If you want the good news too, come back tomorrow for Friday Figures. I will be focusing on year-over-year figures. Except for the drop in prices, things aren’t that bad.

For the moment, let’s drop from consideration the 108 condos that are listing for under $50,000.  Those units are going to need some serious TLC, and probably won’t qualify for FHA financing.  Leave those to some investor:  a savvy investor can pay cash, put $10,000 or even $20,000 into the place, and flip it for roughly double thier money in 3-4 months. 

That still leaves over 700 condos that can be purchased for $50,000-100,000. While some of these will need work, many are very close to move-in ready. These units are in any part of town you could possibly want to live in.

Thursday, new FHA requirements go into place. That means the smallest down-payment allowed will be 3.5%. Let’s flesh out this example with a place that costs $80,000.  Like maybe this one, or that one, or maybe this other one. A 3.5% downpayment would only be $2400 cash, and you might still find a downpayment assistance program with the help of your mortgage broker (or the “First National Bank of Dad”). But let’s also say for the sake of argument that after closing costs, you still end up with roughly $80,000 of mortgage. I have mortgage brokers telling me that with a conventional loan, you can get interest rates below 5%, but an FHA loan is more like 5.5% today.  Don’t blink, because those numbers will change tomorrow. Our hypothetical mortgage payment, principle and interest, is something between $429 and $454. 

You can’t rent a place for that money.  Anywhere. 

Granted, that doesn’t include taxes and insurance and HOA dues, but you can’t find a “real” apartment in Vegas for less than $600.  

And let’s not forget that there are lots of programs out there to help you buy a home, particularly for first time homebuyers.  A good mortgage broker will be able to tell you about the local programs available to you: some require you to live in a particular city or county, some are only open to people in certain jobs (teachers, firefighters, etc.). There’s also the federal tax credit for first time home buyers. The feds will credit you $7500 on your taxes — yes, three times the hypothetical downpayment — but you will have to pay it back over 15 years. 

It’s hard to see a downside to this:  the buyer gets a home for less than it would cost to rent in most cases; the buyer gets the benefit of the home mortgage deduction on his/her taxes every year; prices will at some point start going up instead of down (these are already “can’t build it for that” prices); even if the buyer decides to upgrade to a better place in a few years, these will make great rental properties; and finally, there are all sorts of incentives to buy now rather than wait.

If you want more information, or help finding and buying one of those condos, give me a call or hit the “Contact Me!” link.

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.

If you are starting to think it’s a good idea to buy one of those and rent it out, you will want to look at this set of tenant rules from an experienced landlord.  Alternatively, I can set you up with a top-notch manager who works out of my office.

On the Las Vegas Strip, there’s little sign that the US economy is in trouble.

Glamorous, or merely garish, the Strip – a four mile stretch of huge casinos and outrageously themed hotels -  appears to be in rude health.

[snip]

The truth is a little more complicated.

You’ll have to read the rest over there, including a few paragraphs on a luxury condo development by Frank Pankratz.