BluefoxToday blog

Southern Nevada real estate prices firming up in February

Wed, 10 Mar 2010 16:42:00 -0600

Las Vegas homeowners should be mildly encouraged about the direction housing prices are going nowadays. Well, they aren't actually going much of anywhere, and that's what's good about it. They have put the breaks on the slide that seemed to go on forever and are seemingly stabilizing. Mortgage borrowers whose property is underwater can now hope that values will soon start heading in the other direction, up that is. And eventually lift them from the painful, wallet-busting submersion, whenever that'll be.

GLVAR, or Greater Las Vegas Association of Realtors, just released its latest stats for February to show that the median price stood at $135,694, a hard-fought $769 hike from January, or 0.6% improvement. The significance is that it's up at all. It's 12.8% below from February of 2009, though, a stark reminder of how tough the housing and mortgage markets have been, and still are.

Now, altogether 2,390 single-family homes were sold in February, mirroring an 8% drop from the month before. This has got to worry some Las Vegas real estate observers because it's a second consecutive month of decline. Winter season tends to be slower in the housing arena, true, and that might explain it.

The inventory of property for sale grew again over the 20,000 benchmark, registering 20,262 units listed. It's only about 500 higher than in February, so no one should lose sleep over that. Not yet anyway. The positive side here is that it's an 8.5% decrease from the same time last year.

Southern Nevada real estate continues to be embraced by investors, as a lofty 48.7% of sales were cash, when in December this number was "only" 40.4%. Who else can cruise into Sin City and plunk down still-warm greenbacks for houses? That's them. Even though mortgage money is superbly affordable these days, regular buyers looking to snap up property in the lower end of the market can expect to be outshined by these investors.

Las Vegas housing market has now caught a mild case of the flu, normal for winter they say. The figures for February were mixed, demonstrating that soft spots do remain, that a solid recovery is still months away.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Home loans in Southern Nevada - including Las Vegas, Summerlin, Henderson, Green Valley, Mountains Edge, North Las Vegas, Southern Highlands, Anthem, Boulder City, Pahrump and Mesquite - and all of Nevada.

Rhodes Ranch Area Active Listings/Sold Rental & Resale Real Estate January 2010 Market Report

Wed, 10 Mar 2010 07:52:24 -0600

Rhodes Ranch Area Resale Market Report (homes for sale, pending and sold):

Active Listings (2/15/2010):183
Under Contract (2/15/2010): 464
Sold January 2010: 93
Months Inventory: 2.0

Rhodes Ranch Area Rental Market Report (homes for rent, contingent, leased)

Active Listings (2/15/2010): 126
Under Contract (2/15/2010):25
Leased January 2010: 57
Months Inventory: 2.2

How to read my market reports (definitions and terms!)

Last Month's Market Report

Includes: Apache Hills, Apache Springs (The Falls), Astoria Homes at Rhodes Ranch
(Independence), Canyon Trail, Huntington, Liberty @ Warm Springs, Maplewood, Rhodes
Ranch, Richmond@ Rhodes Ranch, Sierra Madre, Venezia, Vistana.

For More information & most current market report on the Rhodes Ranch Area: http://www.livingatrhodesranch.com/

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Real estate transactions may be burdened by private transfer fees

Mon, 08 Mar 2010 15:05:16 -0600

The present housing and mortgage overload is by some estimates only halfway through its painful cycle, still desperately looking for traction to solve high mortgage foreclosure numbers, underwater homeowners by the millions, home loan providers with books still loaded with toxic paper and persistent oversupply. The complexity and severity of the collapse is testing the skills, creativity and persistence of the public and private sectors alike. Progress has been made on many fronts, but a lot more needs to be done.

While the focus now is largely on turning the pummeled housing and mortgage markets around, a new fee is quietly being introduced to be part of a real estate transaction. Here are the basics of it. Whenever a home sale is closed in the next 99 years, a 1% fee of the price is paid to the original developer or can be split between other parties and investors. The seller pays it to a third-party trustee, and if he doesn't do so, the deal is off. The reason is that a special lien is attached to the underlying land, called a private transfer fee covenant. It stays with any home tied to the program for the set period of time. It has nothing to do with a government transfer tax, HOA fee or environmental protection concerns.

If a home covered by this setup is sold 15 times during this 99 year run, the 1% transfer fee is paid 15 times. That of course generates an inspirational stream of income to the developers and investors at the receiving end. For what, some may ask? From the looks of it there is no economic benefit anywhere in the program, so the sole purpose seems to be to create a 99-year money machine for them. Many real estate industry experts are already calling it a scam or a fancy pyramid scheme. The program is promoted by Freehold Capital Partners out of New York who supposedly have a "patent pending" structure in the works. And its website declares that it has so far signed up partners with real estate projects worth about $488 billion on their drawing boards. That's very impressive, except that none of them are actually named.

The scary part is that Freehold is supposedly in talks with the investment community to securitize bundles of these transfer fees, in other words planning to turn out bonds backed by future cash streams that can be sold to investors. Does that smell like the chopped up subprime mortgage loans shaped into securities no one fully understood that just a few months ago wrecked the home loan industry? Very much so. A good-size red flag right there for the regulators.

Many real estate trade groups, among them National Association of Realtors ( NAR ), National Association of Home Builders ( NAHB ) and American Land Title Association ( ALTA ), aren't convinced that this is the direction to take. There are many pitfalls in the program, besides the money grab. It complicates property transfers by making them uncertain and more costly. The title is clouded for long periods of time and to get releases from the original owners could be impossible. The American Law Institute claims that these transfer fees are "arbitrary, spiteful and capricious" and an "unreasonable restraint on alienation." That's of course lawyer speak. It lowers home prices due to the built-in feature of a fee encumbrance and making them harder to sell.

As of right now, the majority of states have no limits on these types of fees, so housing trade groups against the program are gearing up to spread the word nationwide and stifle its advance. Preferably bury it for good. Home buyers predictably are out of the loop and should be on the lookout for it, specifically asking whether there is a private transfer fee involved when contemplating a real estate purchase.

_______________________________________________________________________________

Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Las Vegas Area Real Estate Market Seller Concession Stand January 2010

Mon, 08 Mar 2010 11:29:56 -0600

Here is what buyers received in seller paid concessions on November 2009 Las Vegas Area (Henderson - N Las Vegas - Las Vegas) Closes:

Less than $500: 64% ($500 only buys you a home warranty or (no and) an appraisal)
Between $501-4000: 19%
Over $4001: 17%

This pretty much means that sellers aren't giving up much of anything since Las Vegas is a Seller's Market and in dire need of sellable inventory! Inventory levels are rising just slightly and we are seeing some movement/improvement in this sector which is good news, especially for buyers who want/need closing costs!

Last Month's Concession Stand

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And We Thought The First Homebuyer Tax Credit Was Expensive

John Mulkey, Housing Guru (TheHousingGuru.com) — Fri, 05 Mar 2010 13:54:12 -0600

In a POST I did last September I explained how the increase in sales directly attributed to the First Time Buyer Tax Credit showed the cost of the program to be as much as $43,000 per additional sale. New information reported by CalculatedRisk.com shows that a tepid response to the program’s extension may leave us with a cost that is more than double that of the original credit, and could equal as much as $100,000 per additional home sold.

Not only does the cost far exceed any benefit from such an artificial stimulation, but the increase in sales appears to be only “stealing” those sales from the future. I reported the same result for the original tax credit in a POST I did last November. Regarding the current credit, Mark Vitner, a senior economist at Wells Fargo Securities, stated, “We clearly pushed demand forward. . . .” Additionally, according to government reports, the original tax credit experienced as much as $500 million in fraud, including fraudulent requests from as many as 53 IRS agents.

Whether we’re talking of stimulating the auto industry with Cash for Clunkers, increasing jobs as in Cash for Caulkers, or boosting the housing industry with the Tax Credit, such programs appear to be ill conceived, fraught with problems, and ultimately cost far more than originally intended. Those of us in the housing industry as well as our political leaders must acknowledge that the recovery will be slow, and that attempts to speed it up only result in wasted money and the potential for future bubbles.

The Housing Guru: The one source for all your housing questions

Las Vegas real estate now most undervalued in U.S.

Fri, 05 Mar 2010 13:44:14 -0600

An eye-catching national housing market study was released in January 2006, right in the middle of the infamous bubble that when it deflated with a lot of noise it threw the country's economy into a tailspin that it is still trying to get out of. It explained that the most overvalued, yes overvalued, real estate then was largely concentrated in California and Florida. Small surprise there. Naples, FL, was crowned the leader in that, being a whopping 84% above what property actually ought to cost. It's anyone's guess how many people would've dared to buy a house there those days had they known, and believed, the overvaluation. Las Vegas is found at the 47^th spot, overvalued by 38%.

The report was prepared by IHS Global Insight, a financial information shop, and National City, a financial holding company, since bought out by PNC Financial Services. The research was based on an analysis of median home prices, population density, income levels, local mortgage interest rates and historic premiums or discounts. The numbers for 2006 can be checked out here.

That was then. Today's real estate market only four short years later looks drastically different. So different that modern English language really doesn't have a word for it. The same two financial and real estate research stores published their latest report the other day, using identical criteria as before. This time the focus is squarely on how undervalued, undervalued that is, most markets have become.

Las Vegas housing market has surged to the forefront of the most undervalued list, as many would expect it to do, knowing Sin City's soaring mortgage foreclosure rates, rampant overbuilding and high unemployment. According to this study, real estate in Southern Nevada now sells 41.4% under fair market value. It has swung from being overvalued by 38% to now being way below what it should be. Simply amazing. UNLV students, and others across the land, majoring in finance and real estate must find this development fertile ground for thesis material.

Chasing the Las Vegas housing market for the lead were Vero Beach, FL, at 39.8% undervaluation and Merced, CA, at 37.7%. The stats can be accessed here.

For Las Vegas real estate the bad news is that scores of existing homeowners have seen their equity vanish into thin air and often actually thrown them underwater - the mortgage balance is higher than the home is worth. This is going to have a painful impact on any future upswing as these people are in essence trapped in their homes and cannot be part of the demand side for a while. On a positive note, first-time buyers and real estate investors are happily finding bargains just about under every rock in the desert and are taking advantage of them, too. Affordable mortgage money is also a tempting incentive for those who need financing.

_______________________________________________________________________________

Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Southern Highlands (Las Vegas, NV) January 2010 Real Estate Market Report (Homes For Sale, Under Contract, Sold)

Thu, 04 Mar 2010 13:08:53 -0600

Southern Highlands January 2010 Real Estate Resale Market Report (Homes For Sale/Pending/Sold):

Listings (2/15/2010): 202
Under Contract (2/15/2010): 229
Sold January 2010: 38
Month's Inventory: 5.3

Since Last Month: Listings are UP +4, Pendings are DOWN -9, Sold Units DOWN -38. I do plenty of community market reports and I must say that Southern Highlands saw one of the biggest changes in the last several months of any of the communities I watch!!

Last Month's Report

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HUD steps up mortgage modification scam enforcement - Las Vegas homeowners embrace initiative

Wed, 03 Mar 2010 13:28:24 -0600

Home loan scams are really part of the real estate landscape in any market, but generally speaking affecting only a small percentage of consumers. Now, however, things are very different. This housing and mortgage meltdown ranks right up there among the worst ever to sweep across from coast to coast. It brings with it some juicy opportunities for the con men among us and are they ever trying to take advantage of it.

Many have zeroed in on the mortgage loan modification programs heavily promoted by the government, but only tepidly adopted by the private sector. That has left a huge void for them to slither in, to the detriment of unwary mortgage borrowers. The media continuously reports on the extent of the problem and new twists to the scammers' arsenal to sound the alarm, but the mayhem marches on. Distressed homeowners are promised lower monthly payments and stoppage to the foreclosure process and all sorts of other goodies, anything to make them take the bait. At the end of the day the scammer pulls a Houdini with a pocketful of money from the borrower.

HUD is now taking a tougher stance on the issue. It just unveiled a website www.preventloanscams.org to try to put a stop to this bloodletting. It's doing this together with the Loan Modification Scam Prevention Network, a national group of private and public entities tasked to power up efforts to fight these vultures on local, state and national levels. The network is run by the Lawyer's Committee for Civil Rights Under Law. The website is the go-to place for homeowners to report anything that smells like a scam and hopefully they'll start using it as needed.

Southern Nevada - including Las Vegas, Henderson, Mesquite, Summerlin, Anthem and Mountains Edge - mortgage borrowers and those in other hard-hit areas around the country are being relentlessly pursued by con artists working this angle. So far law enforcement has had only marginal success combating this scourge. The new website will give homeowners an easy access to a national complaint resource that is designed to expedite enforcement on the local level. It's a weapon that will help keep these scammers in check.

Photo by tomsaint11

_______________________________________________________________________________

Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Economic Conditions for the Las Vegas Valley February 2010

Wed, 03 Mar 2010 12:14:07 -0600

Economic Conditions for the Las Vegas Valley December 2009

Housing Conditions:

Foreclosure/Short Sale Listings (2/15/2010): Total Listings 10211; Short Sales: 4834, 47% of all listings; Bank Owned Listings: 1738, 17% of all listings. Short sale and REO listings consume 64% of total listings
New Home Sales (Juanary 2010, units sold): 240 Year Change -15.5% (excl condo conversions, highrises)
New Home Sales (January 2010, median price): $200,716 Year Change -14.6% (excl condo conversions, highrises)
Existing Home Sales (January 2010, units sold): 3774 Year Change +22.7%
Existing Home Sales (January 2010, median price): $125,000 Year Change: -19.4%
New Home Permits (January 2010): 380 Year Change +112.3%
Rental Rate (MLS Monthly Average January 2010): $1582/month

My analysis: Distressed listings (foreclosures and short sales) are 64% of total listings. Credit markets must be watched as underwriting guidelines continue to tighten. Condos are barely financeable. Resale sold units and pendings remain impressive. Builders cannot compete with bank owned listing prices, thus sales remain lackluster. The rental market is softening due to all the investor/first time buyer combination of activity. This adds more supply and creates less demand.

New Residents/Employment Conditions:

New Residents (December 2009): 4311, Year Change -7.4%
Total Employment (December 2009): 833,000 Year Change -7.4%
Unemployment Rate (December 2009) 13.1%, Year Change +50.6%

My analysis: The tourism, gaming and convention numbers need to improve before these numbers improve. New Resident Count will continue to plummet if no new jobs are created. Economists are hoping that City Center brings tens of thousands of new jobs. The Las Vegas Valley has lost -93900 jobs since April 2008. I am not optimistic that City Center can pull us out of this slump. (see Tourism/Gaming conditions below!) City Center is expected to draw in anywhere from 10,000-15,000 new jobs. Unfortunately around 8500 construction workers from the project will be unemployed so that really boils down to only 2500-7500 new jobs. Unemployment rate is painful yet again.

Tourism/Gaming Conditions:

McCarran Airport Total Passengers (December 2009): 3,097,382 Year Change -2.1%
Gaming Revenue (December 2009): $753,169,630, Year Change -2.4%
Visitor Volume (December 2009): 3,000,539, Year Change +0.1%
Convention Attendance (December 2009): 137,959, Year Change +11.6%
Hotel/Motel Occupancy (NDecember 2009): 71.3% Year Change -2.7%

My analysis: After rising in double digits for one month, Convention attendance is in the black again. This sector (tourism) needs to see some serious price corrections before we see a comeback. Corporate credit is not coming back any time soon. It will be hard to get convention attendance back up without corporate credit. Glad to see regular tourists are making their way here with the imbalance of the other numbers to replace the convention attendee numbers. Gaming and convention business is big business and those numbers MUST increase for jobs to increase and for our entire economy to stabilize. Any convention attendance decrease of over 10% is extremely painful to this economy and all the overbuilt convention space. It will be interesting to see what hotel/motel occupancy boils down to after city center opens with almost 6,000 new rooms online. Anyone else seeing price corrections in store for the Las Vegas Strip?

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. Information deemed reliable but not guaranteed. My analysis is my humble opinion

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The Lakes (Las Vegas NV) January 2010 Real Estate Market Report (Homes For Sale, Under Contract, Sold)

Wed, 03 Mar 2010 08:12:45 -0600

The Lakes January 2010 Real Estate Resale Market Report:

Listings (2/15/2010): 58
Under Contract (2/10/2010): 71
Sold January 2010: 18
Month's Inventory: 3.2

Since Last Month's Report: Listings DOWN -4, Pendings UP +10, Sold NO CHANGE

Why Las Vegas Pendings Aren't Selling

View Last Month's The Lakes Market Report Right Here!

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Coronado Ranch (Las Vegas, NV) January 2010 Real Estate Market Report (Homes for Sale, Under Contract, Sold)

Tue, 02 Mar 2010 07:44:42 -0600

Coronado Ranch January 2010 Real Estate Resale Market Report (Homes For Sale/Pending/Sold):

Listings (2/15/2010): 34
Under Contract (2/15/2010): 50
Sold January 2010: 18
Month's Inventory: 1.9

Since Last Month: Listings are UP +6, Pendings are DOWN -10, Solds Units are UP +6.

Last Month's Coronado Ranch Market Update

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Repeat Buyer Tax Credit Offering Little Stimulus To Market

John Mulkey, Housing Guru (TheHousingGuru.com) — Sun, 28 Feb 2010 20:44:18 -0600

An article on Yahoo Finance provides yet another example of why artificial attempts to stimulate the housing market are a bad idea. When offered on a grand scale, as in the easy money of the last decade, they only serve to create bubble markets which at some point must collapse. And we’ve all experienced the disasters created by the bursting of such bubbles. And when the offer is more limited, as in the First Time Buyer Tax Credit or Cash for Clunkers, they do little more than “steal” future sales.

According to the article, Realtors® around the country are reporting a tepid response to the present $6,500 credit for existing home owners. The author outlined several reasons, some of which I discussed in a recent POST; and all point to the improbability that large numbers of existing home owners will be seeking new digs in the near term. Many are either underwater or have lost so much equity that a sale would fail to generate sufficient cash for a new purchase, commission, closing costs, and moving expenses. And, of course, millions are currently unemployed.

While the spring market may experience some growth, it now appears that a dramatic increase in sales is unlikely.

The Housing Guru: The one source for all your housing questions

Mortgage lenders in HUD's crosshairs over high FHA insurance claims

Sun, 28 Feb 2010 20:05:57 -0600

FHA-insured home loans have carved a large chunk of the market during this prolonged housing meltdown. Conventional mortgage lenders have withdrawn in large numbers into the shadows to get TLC from the government just to be able to survive. Many have plain vanished from the scene, generally swallowed by a little stronger bank.

FHA has become the favorite of first-time home buyers for its more lenient underwriting guidelines and lower down payment requirements. Its programs, however, are open to all applicants and many refinances have been done through it. Since FHA started gobbling up market share a couple of years ago, to some degree it stepped into the subprime vacuum left by conventional mortgage providers, real estate values have continued to lose ground in most areas of the country and that has caused scores of its insured home loans to go sour. Borrowers often found themselves upside down in a matter of months after closing if they only put down the minimum of 3.5% allowed by FHA and quickly became vulnerable to drawing a distressed status label.

Now HUD - US Department of Housing and Urban Development - has begun a review of mortgage lenders, actually already served them subpoenas for documents and information, who have a "significant" amount of claims against the FHA mortgage insurance program. HUD suspects there is more to the high default rates than just declining prices. It's looking closely at each mortgage lenders' underwriting practices to determine whether further action is needed. The list of the 15 home loan lenders receiving the subpoenas can be found here.

Climbing foreclosure numbers at FHA have forced HUD's hand. With these subpoenas it's looking into possible fraud as one of the reasons to FHA's problems. It is also determined to manage risk better from here on out. Its actions will obviously create a tighter mortgage approval regime, thus to some degree dampen demand, delaying any meaningful housing rebound. Yet, it's better to have a solvent FHA issuing mortgage insurance at a slower pace than none at all.

_______________________________________________________________________________

Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Silverado Ranch Las Vegas Real Estate January 2010 Resale Market Report (Homes For Sale, Under Contract, Sold)

Sun, 28 Feb 2010 18:54:23 -0600

Silverado Ranch January 2010 Real Estate Resale Market Report (Homes For Sale, Pending, Sold):

Listings (2/15/2010): 159
Under Contract (2/15/2010): 231
Sold January 2010: 41
Month's Inventory: 3.8

Since last month: Listings are UP +6, Under Contract DOWN -5, Sales are DOWN -41

Read Last Month's Report Here

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Las Vegas Area Market Trends: The Trustee Sale Flip is the New REO

Sun, 28 Feb 2010 18:40:07 -0600

While we all understand that the "Trustee Sale Flip" is not "new", I have taken note through some simple observations that the Trustee Sale Flip has gained ground over REO. As I mentioned in my last market trend post, I saw it gaining ground through my extensive work with BPOs (Broker Price Opinions.)

I now have it validated through several different sources: My referal partners and I have not written any REO offers in the last week to two weeks for any buyers (all short sale and trustee flips) + looking back at some of my past market reports.

Compare June 2009 Sales to January 2010 Sales (By percentage:)

Just look at how much ground REO closings have lost and short sales have gained. "Other" has gone up a bit but I expect it to jump up in the spring months as investors are snatching up properties in Trustee Sales.

Unfortunately there is no way to filter out standard sales vs trustee flips. Some list agents even label them as "REO" in the MLS but not bad enough to skew the numbers. I would say a very large number of the "other" or standard sales are trustee flips.

At any rate, it is much easier to submit offers for agents working for the "investors" than it is REO. There aren't as many gatekeepers to bypass, overlays or rules in the game even though the process should be all "net". (swoosh)

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