Forbes Magazine has come out with a list of 10 Increasingly Affordable U.S. Housing Markets.  You can watch the slideshow outlining them all, but I have a little spoiler for you.

Number One is none other than Las Vegas!  Among the figures they use to back that up, 56% of our housing is affordable at median income; prices have dropped 20% since last year; and huge selection.

It must be nice to be a Congressman. They’re already out for the Independence Day holiday. Of course they left a few little things undone. Like, say, that bill that might have helped homeowners and mortgage companies prevent some foreclosures. Don’t get me wrong, the ideas on the table were far from perfect, but they were better than nothing.

Vacant homes — abandoned, foreclosed, or simply waiting to be sold — are now a serious problem in many communities across the nation. It’s no longer just an “inner city Detroit” sort of issue; even “nice” neighborhoods have boarded up homes that attract parties, drug use, vandalism, and theft.

However, even if we had enough buyers for these properties, there is the problem of getting the money to purchase (and renovate where needed) all those homes. We still have a “credit crunch” where many banks don’t have money to lend. Some of them over-extended credit to construction firms that were themselves overextended. Some of those builders have slashed prices just to raise capital, and in the process slashed market values in the neighborhoods they were building.

But today there is more to talk about than doom and gloom. Today in the Greater Las Vegas Association of Realtors (GLVAR) MLS, we have 21,390 available homes, 16,806 of them Single Family Residences. This level is high, but stable. In addition, we have 7,032 homes that are “contingent” or “pending”. These homes have signed purchase contracts, and the overwhelming majority of them will close within 30 to 60 days. However, the sale is not final yet. Of the available homes, 11,171 are currently vacant (54.7%); 5,809 are short sales (27.2%); 4,737 are REO/foreclosed/bank owned (22.1%). All those percentages are up over last month, and they represent “motivated sellers.” These figures must be taken along with these (courtesy of our friends over at Frothing Developer): taxable sales in the Valley are up (meaning economic growth, and the promise of more jobs); home sales are better than they were this time last year; and despite a regional “recession”, net new residents of 4,600 in May. That’s a slow way to fill those available homes, but it’s better than nothing.

Some time back I mentioned that many countries do not have the same level of regulation for real estate agents that we have here in the United States. Did you know that many states model their rules for real estate salespeople and brokers in part on the National Association of Realtors’ Code of Ethics? Well, in Britain, there is a movement to institute basic minimum qualifications and standards for “estate agents”, including a regulatory body and what appears to be disclosure requirements.

Maybe you remember when I wrote about Barbara Ehrenreich getting it wrong? Now Brad DeLong says she “has gone totally off the rails” when she insists that only the rich can afford to live in beautiful places. I suppose a lot depends on what a beautiful place means to you.

Objective data — actual real figures — show that the Las Vegas real estate market is getting better, thank you very much, with 3000 pending sales and an additional 4000 contingent.

As for the much hyped RealtyTrac figures that 1 out of every 118 Nevada homes got a foreclosure notice in May, that figure seems a bit odd. The last time I found a foreclosure figure “odd” it turned out to be totally bogus. Their figures also indicate that “Nearly 74,000 properties were repossessed by lenders nationwide in May, while more than 58,000 received default notices,” while Foreclosures.com said that nationally, “Lenders took possession of 74,570 homes in April, down more than 5 percent from March….” They also found that “Clark County had 4,426 preforeclosures in April, more than double the 2,029 preforeclosures in the same month a year ago. The number is down from a record 6,152 preforeclosures in March. REOs, or real estate owned by the lender through foreclosure, declined to 1,911 in April, compared with 1,937 in March.” In fact, you can see their stats right here: Nevada had 4,985 new foreclosure filings in May, compared to 5,177 in April and a high of 6,876 in May. And they saved me the trouble of adding up the number of homes total in each county: 742,752 total homes in the state. One out of 149 homes is still alarming, but improved. You can click on Nevada to get a county-by-county list: Clark County as a whole had 24,585 foreclosure filings year-to-date, including 4,222 in May as part of a 2 month decline, for a total of 4.80% out of our total 512,253 households. Keep in mind that many of the foreclosures from earlier in the year are already in the hands of the bank — and in some cases sold already. So the real news turns out to be both better and worse than originally reported.

And I promised a bonus: You know you’re a real estate investor when….

That’s all for today. Make it a good day.

Most people have never heard of Ivanpah. No, not the “ghost town“. The proposed solar power farm? Well, that’s closer.

I am referring to Ivanpah International Airport — currently a hunk of desert near Jean, Nevada — a facility well supported in Nevada and almost unanimously supported by Congress. It is supposed to take some of the passengers that currently fly to McCarran International Airport in Las Vegas, a facility projected to reach its capacity within a few years. Eventually, Ivanpah is supposed to be able to handle 35 million yearly visitors, compared to McCarran’s projected 53 million visitors.

Of course, it doesn’t take much thought to realize that it is going to take some infrastructure to get those visitors from Ivanpah to Las Vegas proper. Proposals include more roads and high-speed rail. Of course, in my mind even better would be high speed rail from Vegas to Los Angeles, perhaps with a stop at Ivanpah. That would sure take a load off McCarran and LAX too, to say nothing of saving fuel as motorists decide to take the train instead of drive.

While most people don’t have a lot to say on the matter, not everyone is happy. Some people worry about the impact it might have on the nearby Mohave Desert, and argue that even if we need an airport it should go elsewhere. Due to military restrictions, such a facility cannot be built north of town, and terrain restricts many other locations. Others argue that between the problems airlines are having and fuel costs, we don’t really need the facility at all, and certainly not in the middle of the desert.

The real strength of Ivanpah is not as a passenger airport. Fares would have to be ludicrously low to get most people to give up flying into McCarran (5 minutes from the Strip) to land in Jean (a half hour away, according to Google). Ivanpah’s real purpose is as a cargo airport. Some experts estimate that bypassing Los Angeles with international cargo could shave days if not a whole week off shipping times.

Of course I would be remiss if I did not mention the jobs that will be created building and subsequently staffing this airport. Jean is close enough that it is commutable from Henderson and the southern half of Las Vegas, although I would expect more development down the I-15 corridor between the two.

Alex Edelstein of Frothing Developer is on a tear about what he feels are inaccurate numbers of high rise condos under development being reported. And he should know — he’s the developer behind a bunch of those condos!  It turns out that the Las Vegas Review Journal reported total condos being built as just high-rise condos.  Oops!

Of course, as we learned in my last post, the County Assessor says there are 19,317 condos and other multi-family dwellings here.  So the additional 12,479 units under development will make for quite a jump of inventory.  Thankfully we still have a growing population;  by the time those condos are done, we should have people waiting to move in.

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.

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!

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.

Maybe you saw today’s news that pending home sales are at an all-time low… well, a low since the National Association of Realtors started compiling those figures in 2001. It’s down 1.9% from last month and 21.4% since last year! Of course, not all regions had the same performance. To listen to the market gurus talk on CNBC this morning, you would think that a long, dark road is ahead for our nation as they made fun of the NAR for daring to predict yet again that there would be a recovery real soon now. Alan Greenspan even did an exclusive interview with CNBC where he disavowed any responsibility for the current mortgage mess.

Meanwhile, a small chorus of experts is joining me in saying that “Southern Nevada’s housing slump is on the verge of hitting rock bottom, if it hasn’t already done so.” Of course if you have been looking at the actual data for Las Vegas residential real estate on a regular basis (and many thanks to Tim Kuptz for making this available every week in an easy-to-read format), you have already seen inventory start to fall and pending sales start to rise. It’s going to take some time to get through the excess inventory, and it’s going to take time to get back to “normal” levels of short sales and repossessed property (bank owned or “REO”). There may even be a little more room for prices to fall in the short term. However, our housing market on the right track at last. When all is said and done, Las Vegas is still ranked #9 nationally in population growth, and all those people moving here still need places to live.

I will be at the United Studios of Self Defense Desert Shores Dojo on Friday, February 29, from 6:00 PM to 8:00 PM to meet you and answer any questions you may have about buying or selling property, local market conditions, the economy, and real estate in general.  I will also gladly set up appointments to list your property for sale, or help you find a great property to buy.  They are located at 8410 W. Cheyenne, Suite #104 (in front of Albertsons and CVS, for a map click here).  You will also be able to meet with representatives from other local businesses.

Yesterday, Sensei Brian told me there are a number of RSVPs, so to get your business represented or get a list of businesses that will be there, call him or Miss Teri today.  Their phone number is (702) 396-9944.

I’m looking forward to seeing you there!