Not that I agree with their list, but you might want to check out Lifehacker’s Top 10 Real Estate Links. By way of disclaimer, I do not recommend using Zillow as a serious price comparison tool. First and foremost, it treats foreclosure auctions as equal to sales.  If you see a house that “sold” for 30% less than everything else in the neighborhood 3 months ago, that’s not a sale.  That’s what was owed when the bank took it back!

Tips on real estate listings and fliers are really aimed more at Realtors, but I think Joe and Jane Average can learn from these tips too.

Echelon is paused but not cancelled. Not a problem.  It just pushes some of our growth a little into the future.  Truth be told, that’s probably a good thing in the long run.

As far as economic trends in Vegas, I am reduced to “What He Said!“  We still have jobs being created in Vegas, home sales are up in Vegas, and thousands of new residents still arrive each month.

The Fed Funds Rate is down and mortgage rates are up.  If you are confused about how that works, let me give you the ultra short version:  the Fed does not and cannot control the prime rate or mortgage rates.  Period. What the Fed does control is the interest rate banks charge one another, and the rates banks get when they borrow money directly from the Federal Reserve. To learn more about the Fed, please check out their educational site.

Half of all homeowners are still in denial and think the market value of their home has not gone down. I’m sorry to tell them this, but no matter how nice any particular house is, no matter how fabulous the upgrades, no matter how lovely the renovations, no matter how well the maintenance, housing values are down.

Tomorrow is Nevada Day.  Schools, state offices, and many other things will be closed.  It is, however, your last chance for early voting.  Have a great Nevada Day and a safe Halloween!

I think it’s fair to say that more people are getting out of the real estate business than into it right now, but for those of you who are just beginning a career in real estate, this post is for you.  You are getting into the field at a very exciting time, and if you can survive this market, you can handle almost anything the future can possibly throw at you.  Make no mistake however, this is not an easy career path, and the industry has changed a lot over the years.  I realize that the majority of my readers are everyday people looking for information, not real estate professionals, and not aspiring Realtors.  If you are considering a career in real estate, hit the “read the rest of this entry” link. If not, thank you for your patience.

Read the rest of this entry »

Breaking News…

I may be at REBlogWorld this Friday after all, and sticking around for BlogWorld.  More details as they become available.

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.

No Crown for Vegas: Back in December, Clark County approved the Crown project, which would have been the second tallest structure on the Strip. This week, “Company officials said the recent upheaval in the world financial market caused the plans to be scrapped.” Furthermore, they will stop making payments towards purchasing the land for the project.

The truth about foreclosures: Just because the bank owns it and wants to not own it anymore doesn’t make it a bargain automatically. Buyers still need to do their research, Realtors still need to be aware of market conditions and advise buyers accordingly, and everyone needs to be aware that it takes patience to deal both with the bank and the problems that may arise.

Didn’t I already say this? Tony’s tips for curb appeal on foreclosure sales may be intended for REO agents (who are experienced listing agents or the bank would never call them) and investors who have purchased property from banks (see above). But they still hold true for Joe and Jane Average as they try to sell their home.

Your Friendly Neighborhood Licensee: I bet there’s at least one Realtor that lives in your neighborhood. Heck, there’s at least 3 on my block! Odds are very good that there’s a Realtor or two that takes a vested interest in your neighborhood, even if she lives miles away. She sends newsletters, she knows every house that’s been available for the last year, she goes door to door, maybe she goes to HOA meetings and organizes neighborhood garage sales. Well, she probably does genuinely like the neighborhood — particularly if she chooses to live there! — but the truth is she would like your business too. It’s a win-win situation, because chances are she knows and can highlight the great things about the neighborhood and the homes in it better than any agent in the area.

Lies, Foreclosures, and Gratuitous References to Adult Parties: The Hopps of Florida weren’t the only people making money off the real estate bubble — in fact, I think you could argue that if their actions involved securities, the SEC would be investigating them for “pump and dump“. In fact, many areas had somebody involved in the same sorts of schemes, where homes were bought for no-money-down, taking mortgages for more than the purchase price, and hoping to get out quickly. The Hopps might have been nothing more than a footnote if it weren’t for that one party making the news. The moral? I don’t know, defraud people and corporations as much as you like, as long as everybody keeps their clothes on?

I normally talk general econ over there, but….: Tim Iocono has some things to point out regarding the relationship of real estate holdings to overall net worth of American households.

I won’t bore you with the various conflicting stories I have seen this week regarding the state of the real estate markets. They range from “things will deteriorate for at least another year or three” to “we should see a bottom in the next 6 months” to “we are bottoming now” to “what are you talking about prices have already started to rise again in some places.” But you know how Tip O’Neill said “all politics is local”? Well all real estate is too. And locally, supply is declining. Sometimes when I do “floor duty” (answering real estate inquiries at the office for people who do not have Realtors), the phone rings regularly with people who want to buy. Econ 101 says that when supply declines and demand remains steady — or rises — prices go up.

I hope everyone has a great weekend.

I’ve updated the links, and added a section for Realtor Resources. Some of the other new additions include Frugal Vegas and the personal blog of former Secretary of Labor Robert Reich. One of his recent posts is on the housing bill currently in Congress.

It turns out I am not the only person who is taking a hard look at the various fees that mortgage companies are trying to squeeze out of people. “Slowly but surely, a handful of public-minded bankruptcy court judges are drawing back the curtain on the mortgage servicing business, exposing, among other questionable practices, the sundry and onerous fees that big banks and financial companies levy on troubled borrowers.” Over and above the miscalculated interest, the sloppy record keeping, and the fees upon fees that can keep people from ever being able to put their loans in good standing, some lenders are adding fees back on after judges have tossed them out and discharged a bankruptcy!

The Christian Science Monitor reports that some potential home sellers are deciding not to play the game at all and pulling their property off the market. Eventually these homes will come back, as the owners find themselves needing to sell rather than wanting to. Others will someday decide that the market has improved enough to chance a new listing. Some will sadly end up in foreclosure and become REO properties. Short version, this trend helps shore up supply now but bodes ill for some future date.

And now for a completely different kind of real estate, French lighthouses. Interested in a tough historical preservation project?

Speaking of foreign real estate, you probably don’t know how lucky we have it here in the states in some ways. Let Robert Brady spell it out for you: “Believe me when I tell you that, when it comes to business (that is, the purchase of real estate), the agent you’re working with is not working for you. Buyers’ agents don’t exist outside of North America. In many of the markets I recommend, real estate agents aren’t regulated or even licensed.”

A message to all those Realtors out there: I know about “Realtor Standard Time” and I know that things happen, but you still have to make an effort to be on time. Got that? Would it have killed you to call and let somebody know you were going to be late?

In a move that surprises nobody who has thought about things for a few minutes, economists have found that housing prices have declined most in places where the commute is longest. I suppose if you can work remotely, you can get some screaming housing deals in the far-flung ‘burbs right now. In the meantime, remember that the Las Vegas Valley is relatively small; I can be on the opposite side of town in a half hour…. traffic permitting of course.

And last but not least, two fun if kitschy tours of Vegas: the mob history tour (hey, they’re all legitimate businessmen!); and the haunted Vegas tour.

That’s all for tonight!

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.

According to the NAR, a REALTOR can help you get more money out of selling your property — even after commissions.  Doubters will of course point out that these numbers were put together by an organization with a vested interest in the outcome.   Even so critics and economists who doubt these figures concede that REALTORS provide valuable services to their clients and will never be completely replaced by such things as websites that allow sellers to list their FSBO (“For Sale By Owner”) homes for a flat fee.  A new study from Stanford spells it out:

Sellers potentially benefit from [real estate] brokers’ services in a variety of ways. First, brokers provide promotional services. They help prepare a house for sales, circulate flyers, place advertisements, hold open houses, and recommend the house to individual buyers. Second, they often assist with negotiations. Third, they screen prospective buyers, facilitating and potentially accelerating the process of matching buyers and sellers. Fourth, they provide access to the Multiple Listing Service (MLS), which lists all homes available for sale. Fifth, they provide market information and recommendations pertaining to the appropriate asking price. Sixth, they often assist with paperwork and legal documentation.

It’s a short version of the list, but it gets the point across.

Of course, the same report comes to a couple of interesting conclusions:  They did not find the same improved pricing that NAR and other research has reported, but they did find that  “[sellers] who use brokers sell their houses more quickly.”

That’s an important finding!   We are currently in a national real estate market where sales are at the lowest level since 1999, prices are declining over time, and we have an average of 10.3 months supply of housing on the market right now.  Locally, inventory has declined to a mere 21.22 months. Add to that the fact that foreclosures are up 57% since last year and 8% since December — including over 45,000 actual bank repossessions! — and it is clear that a lot more homes are coming on the market, either as short-sales or as REO (bank owned) property.  Even if Congress manages to pass Senator Dodd’s HOLC proposal, a lot of people will need to get out of homes they simply can’t afford.

Do you have 21 months to sell your home?  No!  Of course you don’t!

And are you prepared for the fact that if your home sells 6 or 10 months from now, you may very well get less for it than if you were to get a buyer 30 to 60 days from now?

Yes, selling a home more quickly is a big deal, even if you don’t have to relocate quickly.  In a declining market, time on market is money lost on market.

To get my free publication on how a REALTOR can help you titled “50 Things a Licensed Real Estate Agent Does”, or to get help finding or listing property, be sure to call me or click the “Contact Me!” link to the side.

Looking forward to seeing some of you at the Desert Shores Dojo this Friday night!

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!