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(September 2009 Las Vegas real estate report)

Las Vegas home sales for August 2009 were down for July by 13.6%. This is primarily due to the lack of new inventory entering the market while we are experiencing a substantial increase in the number of Buyers in the Las Vegas home market. Although the MLS showed 20,999 listings in the market only 8,579 units were not under contract and waiting to close. Approximately 68% of the total Las Vegas home sales were foreclosures called banks (REO’s). The median price of a Las Vegas home has held some what steady for the last 5 months. The total Las Vegas single family home listings for August fell -2.8% from July 2009. We believe that the foreclosure inventory has yet to increase due to the Banks slowing of final auctions. It has become apparent that the completion of foreclosures through the Sherrifs auction is much slower as the Mortgage holders are flooded with mediation and other internal problems in completing the reposessions. According to Realtytrac we will be seeing increased inventory levels.

We are continuing to see a marked increase in the number of Buyers in the Las Vegas real estate market. Sales are down 13.6% from July in most part due to lack of available REO inventory. We are seeing multiple offers on properties under $250,000 and many of these better properties are recieving over 12 offers. The Sellers (Banks) are now setting asking prices below their market value by as much as 20% in an effort to turn their properties into an eBay style auction. The properties are selling well above the asking price and in some cases above the sales prices of the surrounding properties. With over 40% of the Las Vegas homes being sold for cash to investors the appraisal ceases to be a factor in these cash sales. Investors are purchasing properties based on rental cash flow and in many cases this value exceeds the sales prices of like homes in the area. This results in cash investors paying more than a financed owner occupant can pay for the same home.

We are starting to see foreclosures of loans from prime borrowers on “Alt. A” or cafeteria loans. This means we will see an increase in higher priced, larger Las Vegas homes, resulting in some great buys for buyers with large cash down payments in the purchasing range of $475,000 range and above as the mortgage market is more difficult to qualify for loans over $415,000 currently.

Las Vegas is experiencing increased unemployment of 13.1% in July. The unemployment rate has been growing which will result in additional Las Vegas real estate foreclosures.

With the increase sale activity and drop in new Las Vegas REO inventory it is becoming increasingly harder to find homes in excellent condition to purchase. Las Vegas homes still can be purchased below the median price but these homes are increasingly in need of repair and redecorating. I have seen countless homes for sale at below 50% of what they were selling for at the height of the market. Las Vegas homes are truly ON SALE! But it appears that the Las Vegas real estate market is stabalizing as inventories decrease, sales increase and the median price is now holding steady.

I would  like to invite you to contact me in person for specific opportunities in this exciting Buyers market.

Max Schmidt
702-334-2200

Contact Max and let him know what you are looking for here NOW!

Source: Greater Las Vegas Association of REALTORS®

Las Vegas Real Estate Market Charts

Las Vegas listing history to August 2009

Las Vegas homes SOLD history through August 2009

Median home sales price history Las Vegas real estate through August 2009

(July 2009 Las Vegas real estate report)

Las Vegas real estate review for August 2009

Las Vegas home sales for June 2009 were up once again over May by a substantial increase of 16.3%. This is the largest increase in the number of Las Vegas homes sold in more than 2 years. Approximately 72% of these homes sales were foreclosures called banks (REO’s) which is a 7% decrease in the number of Las Vegas single family REO homes sold from the previous month. This is due in part to the lack on new REO’s being listed in the market place. The median price of a Las Vegas home held steady from May 2009. The total Las Vegas single family home listings for June fell -2.7% from May 2009. We believe that this slowing in inventory is only temporary as a result of the moratorium on foreclosure during the holiday season of 2008. According to Realtytrac we will be seeing increased inventory levels.

We are continuing to see a marked increase in buyers in the Las Vegas real estate market. Sales are up +16.3% over April but in comparison with one year ago they have increase +70.0%. In most cases we are seeing multiple offer bidding (as many as a dozen offers) on some of the best properties in price ranges under $250,000!

We should start to see foreclosures of loans from prime borrowers on “Alt. A” or cafeteria loans. This means we will see an increase in higher priced, larger Las Vegas homes, resulting in some great buys for buyers with large cash down payments in the purchasing range of $475,000 range and above as the mortgage market is more difficult to qualify for loans over $415,000 currently.

Las Vegas is experiencing increased unemployment of 11.3% in May. The unemployment rate has been growing which is resulting in additional Las Vegas real estate foreclosures.

With the increase sale activity and drop in new Las Vegas REO inventory it is becoming increasingly harder to find homes in excellent condition to purchase. Las Vegas homes still can be purchased below the median price but these homes are increasingly in need of repair and redecorating. I have seen countless homes for sale at below 50% of what they were selling for at the height of the market. Las Vegas homes are truly ON SALE! But it appears that the Las Vegas real estate market is stabalizing as inventories decrease, sales increase and the median price is now holding steady in June.

For more insight on the Las Vegas real estate market I invite you to visit my “Las Vegas real estate report” blog.

I would also like to invite you to contact me in person for specific opportunities in this exciting Buyers market.

Max Schmidt
702-334-2200

Contact Max and let him know what you are looking for here NOW!

Source: Greater Las Vegas Association of REALTORS®

Las Vegas Real Estate Market Charts

Las Vegas listing history to June 2009

Las Vegas homes SOLD history through June 2009

Median home sales price history Las Vegas real estate through June 2009

I was recently sent a written interview by an international investor publication concerning investing in Henderson real estate.  I have included both the questions and answers in this series of articles on Henderson Home investment opportunities.

Allison (Question): What is your short-term (6 months) outlook? Long-term (5 years)?

I received an email about buying multiple Las Vegas “Short Sale” homes. 

He writes: “I have some questions  about “Short Sales”

I received a question from James today about real estate taxes.

He writes. ” I am considering purchasing some real estate in Henderson.  How much will property taxes be going up in the Las Vegas area and how should I plan?”

Today I received the following email from an loan officer at Bank of America aka Countrywide.

“UPDATED SHORT SALE TIME LINES AND ESCALATION PROCESS”

In a continuous effort to improve our short sale time lines, please be advised of our current time lines.

Remember that Bank Of America is a servicing company.  We don’t own the note on most of the properties we service.   An investor holds this note.   The investor has to agree to your short sale.

There are three different types of servicing agreements Bank of America has with these investors when a short sale arises.  The different types will affect your turnaround times for an answer.

1)  A “Fully Delegated File” is one where Bank of America has the ability to make a decision is made on the investors behalf without sending them all the paperwork for review.

2)  A “Limited Delegated File” is one where we have the ability to make a decision but with certain conditions.

3) A “Non-Delegated File” is one where a decision cannot be made alone.  All documents received must be forwarded to the investor, plus our research/findings and the investor makes the decision.  This is the most common.

There are three phases in the short sale process:
•        Phase 1: Active – documents and verification should be completed as well as Broker’s Price Opinion or appraisal.
•        Phase 2: Other Follow Up – negotiation and approval letter.
•        Phase 3: Qualified – closing.

THE FOLLOWING WILL OCCUR IN THE FIRST 25 CALENDAR DAYS REGARDLESS OF DELEGATION
All requested docs must be received
Loan is referred by Collections        
File is opened
Offer received (Executed contract and HUD)
Value ordered through bulk order process
Assigned to Phase 1 negotiator

THE FOLLOWING WILL OCCUR IN THE FIRST 40 CALENDAR DAYS REGARDLESS OF DELEGATION        
Documents received,  File assigned to Phase 2 negotiator who will complete negotiations and analysis

IF THE FILE IS DELEGATED, IT WILL ROUTED FOR APPROVAL OR DECLINE IN THE FIRST 45 CALENDAR DAYS AND AN APPROVAL OR DECLINE WILL BE COMMUNICATED

IF THE FILE IS NON-DELEGATED, AND HAS TO GO TO THE INVESTOR, PLEASE ALLOW UP TO 30 MORE CALENDAR DAYS FOR APPROVAL OR DECLINE

UP TO 75 CALENDAR DAYS IS THE TARGET DATE FOR APPROVAL OR DECLINE ON NON-DELEGATED FILES

If renegotiations or additional investor recommendations are made, this can add up to another 15 days.  

So, on the most common files, the non-delegated files, please allow 75 to 90 days for final decisions that include approval or decline communication.

If your short sale goes past 90 days on a non-delegated file, or 45 days on a delegated file, from the date the seller sent in his complete short sale package, you will want to escalate.

Although this letter is fairly technical in nature I think you can get a pretty good idea of the time frame you are in if you make an offer on a “Short Sale” or if you are going to list your property as a “Short Sale.”

See other articles about Short Sales:

Las Vegas homes for sale asking price games!

Short Selling and Foreclosure may put you in trouble in Las Vegas!

  A Las Vegas real estate Buyer Kenson Kuba asked, “Are we near the bottom in home prices in Las Vegas?”

 It depends on what you are buying.  Condo/Tels where financing has dried up and there are about to be thousands put in the market we may see further price declines due to lack of cash Buyers for these expensive high-rise units. 
As to high-rise condos.  These units have still not met break-even levels for investors.  Either rents must go up or expenses decrease or the price of these units may continue to fall.  Some Financiers of whole projects that have foreclosed on these projects are now taking a dual approach trying to rent and/or sell the units.  The cash flows from the rental do not meet the debt loads on the units but do give some cash flows.  For condos that require loans of over $415,000 (jumbo loans) Buyers will commonly need a 50% down payment to acquire financing if at all.  This means these units should continue to see additional price reduction due to lack of demand, financing problems and cash flows.
Regular condos.  This area of the Las Vegas real estate market is the most deeply depreciated area of the market.  Good units can be had for under $50,000.  While adequate units can be had for under $40,000 and poor quality units under $30,000.  The above is a general rule of thumb with exceptions.
I do not see the prices of these units continuing to fall significantly so long as financing is available for the specific project. FHA will not finance a condo in a complex with non-owner occupied units exceeding 51%.  Fannie Mae and Freddie Mac also have new financing requirements hinged on owner-occupancy.  This may preclude a number of condominium complexes from getting financing in the near future.  This will cause them to further depreciate as only cash Buyers will be able to acquire these properties.
Single family homes-  To determine the bottom of the market in single family homes you have to divide them into three distinct categories:
Luxury homes needing Jumbo financing- If a loan of over $415,000 is needed to finance a home purchase then these loans are EXTREMELY HARD TO GET RIGHT NOW!  This means the more as a percentage that the Buyer wishes to finance the less likely they will qualify.  It is not unusual for a Lender to require 50% or more down to gain a commitment for a Jumbo Loan currently.  This means that this sector of Las Vegas homes is not moving well and prices will continue to depreciate on these products.

Medium priced homes $250K to $450K homes.  These homes are usually sold to the move-up Buyer.  Since most of the lower priced homes are REO’s there are not a lot of move up Buyers in the market place.  These homes have already been discounted in the market place and usually reflect a 30 to 60% discount from the top of the market in 2006.  These units do not have financing problems and many are now moving in the market place.  I do not see them continuing on any drastic decline in pricing.  This does not mean that in areas where there are heavy concentrations of these homes that have been repossessed (REO’s) that it is not possible for further isolated discounting.

Low priced and starter homes- up to $250k these homes are the properties most affected by the Sub-prime foreclosure market.  They are also the group that received the fastest price adjustments due to the numbers on the REO lenders books.   We are now receiving multiple bids on these units and it is getting challenging to find units in good shape for Buyers to purchase.  The sales numbers in this price group have soared in the last few months and the number of units in this price range being offered by the banks seem to be declining rapidly. So in this price grouping I think we are past the low in the market baring any substantial increase in financing cost that would drive the Buyers away.

If you would like further more detailed information please contact me:
 Max Schmidt
702-334-2200
Max@MaxSellsVegas.com

Because I sell real estate in Las Vegas I was interested an article about Manitobans buying up deeply discounted homes in the U.S. entitled “A steal of a deal.”  In it Diane Olson, Home Smart in Phoenix gave several examples of excellent buys in Phoenix.

I am helping many Canadian Buyers find real estate in Las Vegas right now and have had great success in matching their needs, wants and budgets for their homes in Las Vegas.  I specialize in helping out of area Buyers find great values in Las Vegas homes and condos. 

Keep in mind that none of the examples below are my listings.  I act as a Buyers agent looking out for the Buyers interests and picking from the more than 13,000 homes and condos listed in the Greater Las Vegas areas including the wonderful suburb of Henderson, Nevada.

I thought it may be helpful to give “A steal of a deal in Las Vegas area”:

Example One:  For those that want to be within walking distance of all the action on the “Strip” but can’t afford the High Rise condos with prices from $500 to $1,200 U.S. dollars per square foot.  Surrounded by the Rio, Gold Coast and Palms these Las Vegas condo units are asking  under $60 per square foot!  For a 2 bedroom, 2 bath unit  with over 900 sq. ft. and an asking price of under $50,000!  Perfect for that Las Vegas condo get away and to share with friends and family. You can even put it in a commercial rental pool.

Example Two:  If your looking for some place a little farther away from the “Strip” where you don’t need to take care of the exterior with added security.  This great gated Las Vegas condo community with on site management is centrally located and has several pools for you to choose from to soak up that Las Vegas sunshine.  For a 2 bedroom, 2 bath unit with just under 1,100 square feet they are asking under $73,000 (about $67 per sq. ft.). Close to all kinds of shopping this is a great place for you to have your place in the Sun.

Example Three: If your a NASCAR lover then you just found your spot being less than 5 miles to the Las Vegas Speedway this unit includes a 1 car garage, community pool, and is gated with a small patio area.  With an asking price of approximately $39 per sq. ft. (no this is not a typo) this 2 bedroom, 2 bath, 1,000+ sq. ft. unit is a steal with an asking price of under $40,000!

Example Four:  Located right on the “Strip” aka Las Vegas Blvd. these condo units are in a gated condo community with clubhouse, exercise room and a wonderful pool. One unit includes a 1 car garage and is over 1,060 sq. ft. with an asking price of under $70,000 that is under $65 per sq. ft. for this 2 bed, 2 bath Las Vegas condominium.

Example Five: If your willing to do a little work here is a great home in a great location! Asking under $166,000 for a 4 bedroom, 2 & 1/2 bath Las Vegas home, Plus a den, pool and more! At just under 2,500 sq. ft. that’s under $64 a sq. ft.

There are so many of these great deals in Las Vegas homes and condos it is impossible to even start to tell you about all of them.  The best way to help you is for you to contact me via email and give me your phone number in Canada so that I can call you and determin your wants, needs and desires.  Then I can send you homes that meet your specific requirements and I will keep sending them as new homes or condos get listed here in Las Vegas!

Keep in mind that these specific units will probably be sold in the next 10 days or so but others will replace them and together we can find your Steal of a deal in Las Vegas real estate.

Max Schmidt
www.MaxSellsVegas.com
702-334-2200
Max@MaxSellsVegas.com

Las Vegas real estate. The good, the bad, the ugly!

All the real estate experts will tell you how the Las Vegas market as a whole is doing.  However the main driving force in the Las Vegas real estate market is R.E.O’s or Bank owned homes being sold off at huge discounts.  I am going to give you the statistics on this important driving force in the Las Vegas real estate market. What these current statistic reveal is that things are already changing in the Las Vegas real estate markets.

Prices continued to fall through April 2009 (click picture for larger image)

Las Vegas single family home R.E.O. sales prices continued on their price dive through April 2009.   The median price of a Las Vegas home including condos, townhomes and mobile homes was reported to be $125,000  by the Greater Las Vegas Association of Realtors.  The above median price of $129,175 reflects only single family R.E.O. sales only for the month of April.

Number of R.E.O.s Sold for the year ending in April 2009 (click to enlarge)

 The number of Las Vegas R.E.O. single family residences sold here have increased over 300% from April of 2008.  This is now starting to dry up available inventories of R.E.O.’s leaving room for the expected new wave coming to sale in the next 60 days.

Las Vegas R.E.O. single family homes average days on market (click for larger view)

The average days that an R.E.O. is on the market is starting to fall quickly which is further indication of the increased sales in the Las Vegas single family homes.

Las Vegas homes Listed vs Sold monthly totals through April 2009 (click to enlarge)

 The above chart shows the number of homes listed verses the number of homes sold in any one month in Las Vegas.  Looking back around November 2005 we see the number of listings and the number of sales get very close signifying that their was very little inventory in the market place with relatively high demand.  This was a primary cause of the Las Vegas real estate price boom that lasted through 2007.  You will notice that in April 2009 these lines are once again converging.  I am NOT suggesting that we are going to have another real estate boom in Las Vegas but what we are seeing is that demand is increasing while supply has been decreasing.  If this trend continues then the supply of homes would dry up do to the increased demand.  This would stop the decrease in prices as people scramble to find homes in the market.  I may even increase prices slowly.

The above converging demand and supply should stop the declining real estate values in Las Vegas and help stabilize the market.  Look for further increases in inventory but a matching increase in Buyers demand to get their homes while the prices are down in the Las Vegas home market.

“The Good”

The price of a Las Vegas home in April reached prices not seen since 1998. The median Las Vegas home price dipped to $125,000.  With a $8,000 tax credit for first time home buyers and interest rates at an all time low of around 5% FHA.  First time home buyers are with good credit, good jobs and 3.5% cash down payment are not passing up this once in a life time opportunity to purchase their home.  For many they can buy and have a lower payment than rent!

Retirees are also coming with cash in hand to find that perfect Las Vegas retirement home/condo at wholesale prices.  The price of  a home here is 55% cheaper than it was in February of 2007!  Many retirees are finding that even though their retirement funds have been hit by the stock market the deals in on Las Vegas condos and homes are just to good to pass up.  The prices here are some of the best in the country and with lower property taxes, home owners insurance rates, no hurricanes,  no humidity, and no personal state income tax Las Vegas is the best place to retire.  Las Vegas also offers many more things to do than most retirement areas of the the country.  Many retirees are selling their homes for 15% to 25% off what they could get 2 years ago and coming to Las Vegas and buying for 55% to 65% off what they could have purchased just two years ago.  They are saving 40% in the process!

Foreign purchasers are also flooding the Las Vegas condo market buying their place in the sun and “the City that never sleeps.”  Canadians in particular are paying cash and finding great condos for as little as $50,000.  This gives them a place to come to for 5 months while their homes in the north are engulfed in snow and ice.

Investors are grabbing up property like it was a one day dress sale at a Bridal wear shop!  They understand that Las Vegas is transforming from a City with 60% home ownership just 2 years ago to a 40% home ownership.  This translates into 20% more (400,000 people) who will be renting now instead of owning.  That is a huge swing in the rental market and savvy investors know this.  They also know that property prices have dipped well below the cost of construction. This means that in a few years these homes will be worth a great deal more than they are today.  The key is that investors are buying, renting and holding these assets for 5 to 7 years.

“The Bad”

It may not be the time to celebrate as so many people here in Las Vegas have been devastated by the Niagara stile fall of real estate prices here. 

We will see in the next 60 days another flood of repossessed homes come on the market.  This is a direct result of the moratorium on repossessions during the Christmas holidays and many mortgage companies waited for the new Obama administrations new policies before resuming repossessions.  All this is now culminating in many more “Sheriff Sales” and as these properties, now owned by the banks, are moved from the repossession departments and into the banks asset management departments they will start once again flooding into the market.

“The Ugly”

Many people have been literally wiped out by:  1)  The 55% fall of their home values in conjunction with the a 60% increase in monthly payments for many.  2)  The huge loss of their retirement accounts value coupled with a simultanious increase in credit card interest payments.  3)  The either loss of their job (10.4% unemployment) or facing a 25% cut back in their hours worked and devastating loss of  income. 

This 3 prong financial punch have left may hard working folks flat on the mate knocked out and now they must start over. Most home owners in Las Vegas owe more on their mortgage than their home is worth.  And many are either waiting for foreclosure or have mailed the keys back to their lender after vacating. Yes, the tail of Las Vegas as the foreclosure capital of the world is not over yet.  We will continue to see vast numbers of foreclosed homes flood the market as more and more Las Vegans loose their part of the American Dream.

Recently some of the largest employers here in the casino industry issued an edict to all employees to be happy during work and not discuss the problems for locals with the tourists.  Although this is good business it shows the now hidden toll this financial crisis has taken on the people of Las Vegas.

You can see the dispare in their faces in the grocery store and on the street.  It reveals it self the most in the well dressed people who have a vacant lost look in their eyes as they stroll the isles picking and choosing carefully their purchases to fit their new life’s budget.  This crisis has not just wiped out those that over spent and should have never purchased a home.  It has also wiped out those with excellent credit, hard working, responsible people with ethics, morals who now stand unemployed and without recourse as their worlds fall apart around them.

We need to help our neighbors, family, friends and strangers through this devastating time in our history.