Nevada Real Estate >> Las Vegas Real Estate Specialist: February 2007

I guess I am in to catchy headlines also -BUT- I don't pass myself off as "The News".

I have AOL set as my home page.  The kids have AOL addresses.  I guess it isn't cool to have an email address like supercoolteen @ yourdorkywannabesupercoolmom'srealestatedomain dot com.  Yea I know AOL sensationalizes with "Entertainment News" and have a mostly young, hip audience but every once in a while I run across "real estate news" when the screen flashes by and the real estate nerd in me has to click on it, read it and analyze it to disseminate fact from fiction.  Most of these news items are from Money Magazine or Business Week and are credible but the last 24 hours of headlines just has me seeing red!

• We all know part of writing is to capture your audience through catchy or "sexy" (if you will) headlines.  But really, enough is enough already: 

AOL Headline #1, Dateline Yesterday:  Bargain Network's Top 10 Foreclosure Cities.  You may be able to buy a 3 BR home in Las Vegas for $140K but it is going to be a manufactured home converted to real property and the condition will more than likely be less than stellar!  What this "news article" is about is a bit of sensationalism in regards to the foreclosure market and a HUGE advertising for Bargain Network to gain subscribers.  Hello?!?!?  Is this supposed to be the new Realty Trac?  You will be charged 95 cents per week on a monthly basis to get information that is already available to you *for free*.  Call your favorite Realtor and Title Company in your area and ask for NOD's. Foreclosure and Short Sale listings to be delivered in your email - for free - as they come on the market.  Was that hard?

AOL Headline #2, Dateline Today:  Homes For Sale $1.  OK, not happenin folks!  You may be able to find that home for $1 but you are going to have strings attached, like the fact that you have to MOVE that house.  So yes, you have a house, but no land.  Moving costs will probably exceed the price of a new build once you find land (even though the article states otherwise) so these types of homes are not for the bargain hunter but for someone who wants true historic charm in a house. 

AOL Article #3, AOL Jobs:  Confessions of a Real Estate Agent.  You gotta love this one!  A Real Estate Agent who talks about their profession and remains anonymous!  She talks about pocket listings as if they were a common occurence (they happen but not often!) She also talks smack about sellers, which was somewhat true but could have been done in a more tactful manner.  I just wonder why "Sara" didn't want to reveal her true identity and gain some publicity.  Odd.

AOL Article #4:  AOL Real Estate:  Dark Side of the Housing Boom: Shoddy Work.  This is actually a pretty good one but it was written by a Money Magazine Contributor.  All new construction was shoddy?  Probably not.  It has good tips in it.

Low and behold I go to the bottom of one of these articles and I see the following link:  Home Prices Drop in 40 States.  Do you think I am going to ignore that one?  Heck no!  I click on it and it goes to a blog!

Now I am beginning to understand why I get calls from people that harbor crazy notions and inquire on cheap foreclosures, short sales, NOD's & fire sales. We are constantly battling untruths/half truths such as these and setting  the record straight.

I cannot believe what passes off as "news" these days but then again, maybe I am just jealous because my blog wasn't referenced anywhere :smiles:  I can also tell you that I have seen better written articles that have more truth right here on AR than I have read on AOL in the last 24 hours.  Should we tip them off on where they can find better guest authors?

Let me give you a small background on where I came from. I came from a middle, upper class family with a semi-strict upbringing and I never had anything handed to me on a silver platter, although my friends that I attended high school with did. I have three siblings one that is 13 months younger than me and one that is 11 years younger than me and one that is 15 years younger than me. I was very close with my brother, the one who is just a year younger than me. We learned how to scrape and survive on our own. We both had jobs when I we were 15. Can I say my parents NEVER HANDED me anything? Not really. I got handed some of the best tools to succeed in my little adult world, even though I struggled on what I wanted to do when I grew up.

My dad always had a fantastic work ethic and almost everyone knows him where I come from. He always had a penchant for real estate but wasn't involved in it career wise. I always suspected that is what he wanted to do when he grew up! He was lucky with almost every real estate deal he touched (save one, early 80's, you figure it out!) and pushed me early in my married life to own, buy and sell. He is very very clever with real estate and flips homes without very little help from a Realtor. My brother and I grasped that taste and have careers in real estate. He is a custom home builder in the midwest and he isn't as conservative as I am with the way he views real estate so his success is quintuple (or more) of mine. We both were taught the same concepts and values but used different means to achieve our goals/dreams.

I personally feel I am attracted to the Profession of Real Estate because everyone needs a home and everyone who practices the virtues of building wealth through real estate can attain wealth.

In my eyes, there is no way to "Get Rich Quick" in real estate. If anyone tells you that, they are making a quick buck off of you and getting rich quick off of a person being naive.  But you can attain wealth throughout a lifetime of owning real estate. The virtues to gain this wealth are: patience, perseverance, delayed gratification and a good eye:

• Patience: You must be prepared to be patient while your home appreciates in value.
• Perseverance: Outline your goals and develop a long term plan. You must understand that it takes time, money and a plan to achieve your goals.
• Delayed Gratification: You must understand that you cannot continually cash out or use your home as an ATM as it appreciates if you want to stay in check with your plan. Be prepared to live a different lifestyle & sacrifice. Be careful with buying fancy cars, clothes and accessories and things that you really don't need, that don't appreciate in value and don't coincide with long term goals.
• Good Eye: Choose your home in a neighborhood with good appreciation value. Buy the smallest home in the neighborhood (as a rule of thumb larger homes are priced at lower prices per square feet.) Go to "the sticks" and find a home, check your local planning department. With growth comes jobs, with jobs comes the need for housing. Trust your gut instincts when you do your research.

I want to share how I accidentally applied these virtues and goals, without realizing it, and combined luck with success to make money I had never dreamed of! Here is my story:

I married at the very young age of 19 - and I am still married to the same man - 18 years on May 20^th. Save four months of living with his mom when we moved to Las Vegas and found jobs and housing & another four months of living in an apartment between a house sale and severely delayed new construction build, my husband and I have always owned our own homes.

Our first home was a 10x60 single wide trailer that we bought in February 1989 for $5000. Our monthly payment was $200 and lot rent was $150. The birth of our first child made it too small and we decided to buy a bigger home a year and a half later. My favorite memory in that house was rocking my lil boy on our swing and having a lovely view of the freeway right from my front porch. We ended up selling it for $2000 more than we bought it a year earlier! This does not happen with manufactured homes. We realized this appreciation because we bought on the smaller, older and low end and did some minor repairs and put new carpet and paint and surface work into it totaling less than a couple hundred dollars. I did have a "hook-up" with the carpeting, that is why it was so cheap.

Our second home was bought for sale by owner with an FHA loan and the sellers paid closing costs. We paid 54,999 for it and closed July 1989. It was a great 3 BR, 1 BA ranch with an unfinished basement on a lot that was close to 1/3 of an acre. I wasn't even 21 years old and was so appreciative of this opportunity! Our monthly payment was $434 and some change. My husband and I had another baby in this home and my favorite memories are of their early childhood: batman meets curly haired girl and the both of them playing without a care in the world on their huge play gym and sand pit. I also opened an in home daycare immediately when we moved in. This allowed us so much: Me to stay at home with my children, income to help my husband have a job where he could mostly concentrate on school and I could go to school through correspondence. I can't tell you how many nights I passed out cold within 1 minute of shutting my eyes laying on my bed! I worked so many 60 hour weeks running a business, studied, raised my kids while my husband worked/went to school! I dreamt for the big payoff to happen and maybe to spend time with my husband alone some day! In the mid nineties when my husband finished school, I went back to school and then finished up with a shiny real estate license in the end! Our big goal was to end up in Las Vegas some day. I didn't realize how quick that day was coming! My husband landed his first job in electronics which (after a series of layoffs) landed him one of the very slot electronics jobs in Council Bluffs, IA. He was #12 out of 12 hired with over 300 applicants! He worked that job for several years before we decided to do something very risky and take the plunge in 1997. Our house sold for $84,500 in December 1997. We owned the second to smallest home in the neighborhood, finished the basement for less than $5000 and saw appreciation mostly due to development of major retail centers/medical corridors within only a couple of miles in all directions. We struggled so much in this home with money (which was always nonexistent) that most repairs and improvements were made by us. Did you know I can plumb a toilet and finish drywall? Through all of the pain, sacrifice & struggle my husband and I had in our early years in this home we learned all of the virtues of building wealth through buying and selling real estate and that would be practiced through our later purchases!

We moved to Las Vegas on December 27, 1997. We moved in with my husband's mother in order to find suitable jobs/area and housing. We found our third home in April 1998. It was another FHA loan, closing costs paid by seller and we bought it for $124,000. It was 3 BR and 3 BA. What was I ever to do with 3 baths? Our monthly payment was $995 and it was still cheaper than renting something comparable! My favorite memories include my kids playing roller hockey and riding their bikes in this neighborhood that was so full of life and other children their age! My husband worked with a large slot machine vendor when we started out in Las Vegas and then he switched jobs and moved to a casino just a couple of blocks from our house. Literally two right turns, and then two lefts. We struggled during this time too as the casino he worked for filed bankruptcy and we played it out waiting and worrying if he would lose his job some day. Several years and management companies later, he landed himself some job stability when someone bought the company on the same property! He started to move up the ladder and our house was growing small for our growing children and the cranky neighbor behind us was making me lose my sanity. I also wanted to get the kids in a different high school than what we were zoned for. The search was on! We sold our third home for $166,900 in August 2002. We realized large appreciation because we bought the medium sized home in the neighborhood and it was in an area that had large growth in a short amount of time. Where there was once desert there was now large shopping/retail and restaurant areas (Called Boca Park) and 2 casinos Suncoast and Rampart (the one where my husband works!)

We lived in an apartment between the time our house sold and was being built and finally closed on our Fourth and present home on December 23, 2002.  4 Bedrooms/3 Full baths. I don't know why I am a glutton for punishment with December closes! We bought it for $235,000 and our house payment is $1800. We struggled with the purchase as we saw the area growth potential but weren't exactly sure if we would achieve quick appreciation with this home like we did the other. We saw comparable homes in our neighborhood for rent and wondered if the rental return would ever come close any time soon. In one year (Jan 2004), our house was appraised for $45,000 more and we spent $20,000 putting in a pool as our appreciation could justify the expense. What we didn't know that would lie in the year ahead is that we would watch our house triple in value and be able to refinance our second into a fixed product that would be cheaper than our first (flippin 3 year pre-payment penalty!) In this home, I have watched my beautiful children blossom into adults and we are in the twilight of them getting ready to fly the coop. I decided I wanted to be a real estate agent when I grow up and my husband has moved up the ladder quickly. My home is currently worth $450,000, but to me, this is my forever home so it is priceless!  The views we get of the mountains & Red Rock Canyon from our porch swing of our master bedroom balcony, the relaxation we get from  our own pool and backyard (that we designed ourselves, but the picture shows all of the plants that died this year from the cold) is also something money cannot buy.  Rental value on it has gone from $1200 in 2002 to $2000 presently. All of our initial worries were justified in less than four years. Our goal is to have this paid off around the time we turn 60 (before would be better but I don't like to stress myself out over it!) so we can enjoy our lives and retirement together!  Oh yes, and I will never forget where I come from!  I remember and appreciate it each and every night when I have to go to the bathroom in the middle of the night and that bathroom is in my bedroom!  When we moved here, the directions to get to our home were "go to the edge of the earth and take a left".  Now there is a huge medical corridor and TWO hospitals within two miles along with an abundance of retail/restaurants.  We don't have to go "to town" anymore to get groceries!

Advice for buying your first home:

•  Set Goals!
• Start saving
• Buy young, you can do it!
• Learn how to do your own home improvements to save money. Local hardware stores hold seminars on how to faux paint, set tile, basic plumbing, etc and they are mostly FREE!
• Do not buy more than you can afford. Entry level housing is just that. When you start buying young you appreciate small and it being yours. You appreciate every move up.
• Be patient for the value to rise
• Wait for your stars to align to move up
• Learn how to sacrifice
• Align yourself with a good Realtor/Lender & Tax Professional who will keep you up to speed on when it is a good time to buy or sell, refinance, and if the tax benefits of owning outweigh renting
• Do your own homework and research the area and it's potential
• Stay focused on your goals!

You must also view your home as an investment vehicle: knowing when your stars are aligned and buy and sell at the right time. This should coincide with your goals. Your stars are aligned when you:

• Have the need for a housing change
• Your Home has appreciated in value enough that you have enough equity to provide for a reasonable down payment on a new property
• You have had a change in job status that forces you to consider a relocation, upsize or downsize.

My best advice that I can give you to achieve wealth: Celebrate Success, Stay Humble and Learn from Your Failures. Use Your Successes and Failures to Teach Yourself How to Become Resourceful.

If you are an AR member with a similar story:  please post about it and link it here!

Here is a consumer based summary for contributors of Las Vegas Area Real Estate Professionals Active Rain Group for 2/14/2007 - 2/24/2007:

• Escrow 911: Subprime Fallout and the Potential Impact on the Las Vegas Valley Rebound by Renee Burrows
• Mortgage Rate Quotes for $500,000 and Higher by Brian Brady
• Can You Justify the Costs?  By Paul Francis
• Curb Appeal:  Are you Spray Painting the Front Lawn?  By Norma Hoag
• Henderson, Nevada: "Southwest 1031 Exchange" in Recievership, 83 Million missing by Norma Hoag

Thank you to all the great contributors of our group and if you are a Las Vegas Area Real Estate Professional who belongs to Active Rain and would like to join our group, click here.

My next one is #100 according to posts on "my home"

I have had great hope for the Las Vegas Valley Real Estate Market over the last 6 months. Looking at facts, figures, stats. I personally predicted hitting the low in January/February provided all economic conditions remain stable.

I watched with glee as our pendings rose dramatically last week, perhaps needing a seasonal adjustment, but nonetheless an upward tick. I started a spreadsheet to analyze monthly inventory just this week and was glorified to watch our inventory go from 13.3 months to 12.3 months overnight one night.

Then the realization of the subprime lending market doom (read Lewis Poretz) hit me midweek. Underwriting guidelines are tightening and we are watching decent rates for the 100% stated-income loan disappear. With foreclosures and shortsales increasing it is easy to admit this should have been seen coming from a mile away.

I am slightly concerned about the effect this will have on the Las Vegas market as I played escrow 911 most of the week because of underwriting guideline changes.

Our job market consists of many, many tipped income jobs. I seriously don't know how high the figure is but it could be as low as 20% and as high as 35%. The restaurant industry alone employs about 14.3% of Nevada's economy. It would be safe to assume that a good portion of those jobs are tipped jobs. When you combine those type of tipped income jobs along with other non food & beverage tipped income jobs (valet, floor person, card dealers, etc) that number rises exponentially. Consider that the IRS/Unions/Casinos make deals called "tip compliance" that allows these people to make so much more than money than they show on paper. While they have the income to support their stated income purchase, they do not have enough income for to document a purchse. What will happen to real estate sales here?

I can honestly say I don't know how this will play out. Perhaps people will have to look towards more traditional means of financing such as: saving their money for a Conventional down, VA and FHA (with a cosigner.)

As this collapses and the winds of change blow by, it will be interesting to watch the changes and the effects this has on our (what I thought was rebounding) market.

As Realtors, it is more important than ever to make sure we team up with a lender who understands this market and has seen this played out in the past (not to drop names but whispering Brian Brady.) It is important to make sure that our clients don't fall for low teaser rates only to be rate jacked when the loan goes to underwriting. Simply because their lender didn't understand or keep on top of new guidelines. We are going to have to do extra work to make sure our buyers for listings are qualified and their Realtors & lenders realize the impact of the changes. Every listing offer with a 100% loan contingency should be looked at with raised eyebrows and scrutinized before consideration by the sellers!

I hate to sound pessimistic or like an alarmist but this could have a serious impact and I really would rather err on the side of caution.

I had my first IRL encounter with AR screen names today!  That would be 2 parts of the Marriott Group:  Tony & Suzanne!

Since I have been stood up twice today (once by a client, second by my husband)  I decided to beat Tony to the punch and post about this.  OK I also need to get to 100 posts somehow for my entry in Mark Flanders & Brian Brady's contests TOMORROW will be my 100th post if my stars align correctly :)  Can I have a triple dip please ?

We had a great chat about the Phoenix Market, the Las Vegas Market, Active Rain, Localism and the Mastermind Meeting they came in town for!

I would have zero reservations about sending them referrals since their energy and real estate knowledge (and sense of humor too) is off the hook!  They have a competent team that serves (from what I gather) almost the entire valley.

Thank you for taking the time out for me! 

Everyone knows him so why do I even have to say his name?  I remember he was the first person to welcome me on AR.  I was so impressed by his calm and cool attitude. 

He made such an impression that I mentioned his name to the second person from AR who called me and I was told "oh he specializes in hard money loans so that is what he does mostly."

So that is what I thought.

Until I called him about a month and a half later and asked if he did VA loans.  I may have needed an LO in a pinch that weekend.  Well of course he does!  He also explained the 3% funding fee and other options that were available and comparable products. 

Since then I have called him about a bunch of other weird scenarios.  Of course he knows about all of those products and would go into great detail about them.  I have started to link to his website with my internet leads today even if I don't have their contact information other than their email address.

I am convinced that this guy knows everything about everything mortgage!  I feel bad because I have not had the privilege to close a transaction with him yet but I have the confidence that he can get the job done and if he can't he will be truthful from the start!  He is calm, cool and collected and isn't used car salesman slick like some mortgage brokers seem.

No loan seems to be too big or small.  No difficult scenario seems to be a challenge.

Thank you Brian Brady!

That basically Las Vegas' entry level new single family home standing inventory is virtually gone. Yes, we see the occasional fall out of escrow fire sale (see Brian Brady's post on what is going on!) The market is turning each and every day and soon the buyers in the new home market will feel the pain and lack patience with a long build and turn to the resale market to absorb some of that inventory.

Currently (just my unscientific poll from working with buyers) there is about a 4-6 month build out valley wide for the entry level (less than $300K) market. The builder I was speaking about in Brian Brady's above post has held their fire sale and already raised prices! This is a matter of TWO WEEKS since they lowered prices to a level which moved their standing inventory and dirt lots that are out 4-6 months. We are seeing incentives disappear and it is my humble opinion that the pain point for new home buyers to start jumping into the resale market will be a 10 month build.

It isn't unrealistic to see a 10 month build out in a matter of a couple of months when it was only a couple of months ago (November/December 2006) that the entry level single family market saw an abundance of standing inventory!

What this means for our inventory soaked resale market with 16708 (2/18/2007) single family homes currently listed with 1506 (2/18/2006) that currently closed in the last month is that if we see even 1000 more closings in the next month (we currently have 2756 pendings/contingents 2/18/2007)) that our single family home inventory will be cut from 11 months of inventory to 6 months of inventory instantly!

It is sensational to report of new home purchase incentives that includes pools, Cadillacs and plasma TVs. It isn't sensational to report that in January of 2007 Las Vegas Valley had the most January closings of new homes EVER and those incentives disappeared last fall.

It is sensational to report about new home starts being down. It isn't sensational to report that 2006 was our third best year of new home sales EVER in Las Vegas Valley.

It is sensational to report about an abundance of inventory. It isn't sensational to report economic conditions that could turn our market overnight.

It is sensational to report about stangant or lower prices. It isn't sensational to report about new product hitting the resale market that affects our stagnant median prices.

It is sensational to report about the rise in foreclosures. It isn't sensational to report about timeshares foreclosing and affecting our foreclosure rate.

It is sensational to report about how housing is unaffordable. It isn't sensational to report the 1 month of rental inventory that is on our market and we are watching rents rise quickly.

It isn't sensational to report that these statistics include our condo/townhome market that is incredibly saturated right now and is still in it's correction phase.

It isn't sensational to report that you should contact your trusted market real estate professional to figure out if it is the right time to buy the right product because statistics CAN be manipulated.

Sources: GLVAR, Salestraq

So why are so many buyers still sitting on the sidelines? I have been busy calling my buyers who have been sitting on the fence and letting them know "now is the time". I am also alerting the non-motivated sellers that have been patiently waiting behind the golden gate that the gate will be opening soon.

It has definitely been a challenge to get those buyers to jump off that fence but with the bargains (builders, resales, short sales and foreclosures) that are out there, the jump becomes swift and painless no-brainers! While I have been looking at properties with one client, I spot something for another at deep discounts. Just as I predicted, prices are going down slightly (and I it is my humble opinion they are bottoming out,) builder's incentives are disappearing as quick as standing inventory in the entry level market is! Weekends are insanely busy for builders who have their homes priced right (search) and this past weekend I sat in a builder's office and there were so many people in there we were packed like sardines!

So what do you think of buying now? "Where are all the bargains?" North Las Vegas seems to be the hot spot right now and I opened two NLV escrows just this week alone!

So do you think we should go looking today or tomorrow? "I want to wait for awhile!" Building permits are still being pulled at a 1:2.5 purchase ratio right now which will lower the amount of inventory in the resale market very soon. Why not buy now when homes are still relatively inexpensive, you can get incentives and closing costs paid by motivated sellers and you have a CHOICE with plenty of resale inventory and 4-6 month dirt lot build outs?

Economicallly speaking, Las Vegas Real Estate proves to be a good value:

• No Income Taxes
• Low, Capped Property taxes: 3% Owner Occupied, 8% Non-Owner Occupied
• Low Unemployment Rate
• Land Scarcity
• Many many new residents each month!
• Great weather (well for the most part!)
• Impending Boomer Retirement (it's all about the sunbelt, baby!)

So you aren't convinced to buy yet? "It's cheaper to rent!" We can't make more land, the people are still coming here in droves and rent prices are CLIMBING! In the entry level market single family (read: NOT CONDO) market, there is almost no disparity between rent prices and the price of a new mortgage payment - especially when you factor in that mortgage interest TAX DEDUCTION!

Are you ready to buy now? "But, but, but, but.....the newspaper and TV channels say....." Let me stop you right there. The newspaper and TV channels say LIST prices are going down and our valley's wages cannot support this, right? "uh huh" List prices don't change value of real estate, SALE prices determine value, along with a couple of other things such as property condition, area and concessions. Also, this valley is home to a large percentage of boomers, tipped workers and investors, those types of residents do NOT make real wages and housing remains incredibly affordable to them!

Can we go today? Sure, does 2 or 3 sound good?

Well I haven't really been able to make a same day appointment for several weeks but it makes for good drama:)

Colleen you are such a great inspiration and motivator!

Here is a consumer based summary for contributors of Las Vegas Area Real Estate Professionals Active Rain Group for 2/07/2007 - 2/14/2007:

• Renee Burrows:  Economic Conditions for February 2007
• Renee Burrows:  Foreclosures & Short Sales Deal or No Deal?
• Jacqulyn Rickey:  Bark in The Park  I have this on my calendar, maybe we can meet up if you will be there?  I will also alert my Italian Greyhound Meetup club to this event.  Thanks Jacqui!
• Brian Brady:  Can the Middle Sized Traditional Broker Survive?   Another great debate that pertains to our valley!
• Jacqulyn Richey:  New Tax Break for Home Buyers This Year
• Jacqulyn Richey:  Pet Friendly Rentals in Las Vegas

Thank you to all the great contributors of our group and if you are a Las Vegas Area Real Estate Professional who belongs to Active Rain and would like to join our group, click here.

January 2007 Economic Conditions

Housing Conditions:

• Foreclosure/Short Sale Listings (1/21/2007): Total Listings (2/13/2007) 20,688; Foreclosures Commenced (listings 2/13/2007) 330, 1.6% of all listings; Short Sales (listings 2/13/2007) 743, 3.6% of all listings; Both Foreclosures Commenced AND Short Sales (listings 2/13/2007) 250, 1.2% of all listings.
• New Home Sales (December 2006, units sold): 2,384 Year Change -24.2% (excl condo conversions, highrises)
• New Home Sales (December 2006, median price): $330,094 Year Change -4.4% (excl condo conversions, highrises)
• Existing Home Sales (December 2006, units sold): 2,678 Year Change -36.8%
• Existing Home Sales (December 2006, median price): $285,000 Year Change: 0
• Single Family Residential Permits (December 2006): 1,118 Year Change -52.6%
• Apartment Rental Rate (4 Q 2006): $850 Year Change +4.5%

My analysis: Watch for rents to rise as housing becomes less affordable. New home incentives will disappear the first two quarters of 2007 as housing permits continue their downward trend. Potential new home buyers will move into the inventory soaked resale markets and normal market conditions may return by the end of 2007.

New Residents/Employment Conditions:

• New Residents (January 2007): 5,506, Year Change -12.5%
• Total Employment (December 2006): 947,600, Year Change +5.1%
• Unemployment Rate (December 2006) 4.2%, Year Change +20%

My analysis: We need more jobs to continue strong growth. Our employment rate is still low.

Tourism/Gaming Conditions:

• McCarran Total Passengers (December 2006): 3,801,405, Year Change +7.9%
• Gaming Revenue (November 2006): $989,644,606, Year Change +16.9%
• Visitor Volume (November 2006): 3,496,110, Year Change 0
• Convention Attendance (November 2006): 585,047, Year Change +2.9%
• Hotel/Motel Occupancy (November 2006): 87.5% Year Change +1.4%

My analysis: The gaming/tourism industry is still strong. Still not strong enough to support all proposed new rooms (condotel and hotel) developments.

Sources: Salestraq, Home Builder's Research, Greater Las Vegas Association of Realtors, Nevada State Gaming Control Board, Nevada Department of Motor Vehicles, McCarran International Airport, Las Vegas Convention & Visitor's Authority, Nevada Department of Employment, Training and Rehabilitation

I was challenged on another blog about the amount of Foreclosures/Pre-Foreclosures in Las Vegas with this article. 

First of all I would like to define a couple of terms. 

• A notice of default (NOD) is a pre-foreclosure.  The home has not been foreclosed upon yet but the owners are behind on their payments.  Realty Trac includes this in their statistics also.  Sometimes the owner can cure the default and get back on track.  100% of these homes will not go into foreclosure.
• A short sale is when an owner is forced to sell for less than what they owe on the property.  They may be in distress or they may be forced to move out of state for one reason or another.

Raise your hand if you realize that time shares are included in Realty Trac's statistics?  One day I received (in my notice of defaults) close to one hundred pre-foreclosures of timeshares.  Do you think that this will skew the results of Realtytrac's foreclosure statistics?  ABSOLUTELY!  It isn't sexy to report about timeshares foreclosing but it is sexy to report about people having financial difficulties because of icky loans they got "trapped" into.

I have been receiving many calls from many different types of buyers (first time buyers and investors) who want foreclosure commenced, REO and short sale information.  Their main focus is that they are under the impression that they will receive a great bargain to either live in these homes or flip. 

IT is my job to find out WHY these people want these types of properties or any type of property for that matter and to counsel them on whether that type of property will work for them and the ongoing process to get from point A (a purchase contract) to point B (a close of escrow).  While it is ultimately the consumer's job to find the best property to suit their needs at the best possible price, they need to know and understand what they are getting in to.

First of all, most NOD's and Short Sales are fairly competitively priced in this market at this time.  Even a 5% bargain may not be enough to recoup possible costs from two main problems that are usually associated with short sales and foreclosures:

• Liens
• Deferred Maintenance

If they can't pay their mortgage why would you assume that they are paying their association dues, trash, sewer bills and general maintenance of their home?  Most banks sell these properties AS IS and will NOT correct liens & material defects.  It is important to run a preliminary title report prior to writing up an offer and to put a contingency for a home inspection in it.  While the bank or homeowner will not be liable for fixing defects and it minimizes your chances for getting your offer accepted, at least you can back out if there is something majorly wrong that you cannot live with!

There are plenty of sellers wigging out right now and lowering their prices and these are not necessarily people in distress financially:  they just believe the sky is falling in on the Las Vegas Real Estate Market which is blatantly untrue!  Read:  Inventory Shrinkage..., Real Estate Has Never Been a Better Value..., Here we grow again...

You can find a better deal right now other than a short sale or foreclosure!!!!!!!!!  We currently have 20578 listings (numbers from 2/10/2007) in the valley.  Of those 20578:

• 565 are Foreclosures which is 2.7% of our listings
• 722 are Short Sales which is 3.5% of our listings
• 241 are both which is 1.1% of our listings

Compare those numbers to last month's statistics and it is pretty much the same!  So my point is, why do you want to limit yourself to only 3.5% of listings to find yourself that bargain?

Alright, you find a short sale or preforeclosure and you want to put in an offer!  What do you need to know? 

• Have your Realtor get with a title company and run a preliminary title report prior to wasting valuable time and writing up an offer.  Make sure that you can live with paying off the liens and correcting title defects if the bank won't.
• Be prepared to wait wait wait for the bank to consider your offer.  This isn't an overnight or 48 hour decision!
• Write your highest and best offer if it is priced right because while the bank is considering your offer, others will probably roll in to be considered!
• Put as much cash down as you can.
• Live without as many contingencies as you can.
• Make the COE (close of escrow) as short as you can.

Good Luck!