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.

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.

The intersection of real estate and politics is right here, in this item from the IHT called “U.S. housing bill evolves, but crisis grows deeper”.

Elections have a direct impact on you.  Primaries are in some ways more important than the Big Game in the fall.  It’s not easy finding out about these candidates and their positions, but give it a try, and remember to vote on August 12 if you are a registered Nevada voter.

Since January, when Ian Bruce Eichner, a New York developer, defaulted on a $760 million loan, Deutsche Bank has been giving Perini a monthly check for $70 million to continue construction. It is now in full swing with 2,800 workers on site and a dozen cranes towering overhead.

Deutsche Bank, which declined to comment about the Cosmopolitan, is one of a dozen investment banks that rode a five-year boom in commercial real estate by financing developers and landlords while profiting by packaging loans into securities. But credit markets seized up in 2007, sticking banks and brokerage firms with commercial mortgages and bonds. The amount for large U.S. banks alone reached $169 billion, according to Fitch Ratings.

The Cosmopolitan is clearly worth more to Deutsche Bank as a finished product than a construction site. It’s still scheduled to open in late 2009.

But the Cosmopolitan has other problems too: Cosmopolitan Magazine is suing them over their name! Hearst Publications insists “the Cosmopolitan development has tried to confuse the public into thinking the project is associated with the publishing company.” Now I don’t know about you, but I don’t see how I can confuse the two. Here’s what the Cosmopolitan will look like. Now, here’s what Cosmopolitan Magazine looks like.

Next thing you know, they’ll be forcing bars everywhere to pay a royalty every time they serve a Cosmo.

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.

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.

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.

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.

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.

Also in Florida, the New York Times tells us about some enterprising guys who have set up business working on foreclosed properties. They inspect, secure, maintain, repair, and sometimes even clean up these properties for the banks that own them. Unoccupied homes can deteriorate quickly, particularly when helped along by vandals, moisture, and abandoned animals. On the other hand, banks have discovered that a few hundred or thousand dollars paid to companies like this can prevent problems and municipal fines, help them sell the property quickly, and in the end, save money.

Anyone want to bet on whether these guys know “The Maniac” by now?