Las Vegas resales stay on an upbeat course in November

The holiday season is upon us although this year it might be more subdued than in a long while due to the overall weakness in the national economy. The mortgage and real estate markets have taken unprecedented punishment in most parts of the country that requires extraordinary efforts and just plain old time to turn around. Southern Nevada housing sector, for its share, has paid dearly for past excesses but has lately shown some flickers of hope that perhaps a tentative recovery may be shaping up.

November statistics from Greater Las Vegas Association of Realtors, or GLVAR, back up the cautiously upbeat sentiment. There were 2,183 single-family house sold last month that is well over double the number for the same month in 2007. True, it's a small drop from October that really is a normal development as the slower-paced winter season sets in. For several months now resales in Las Vegas valley have been significantly better than comparable figures a year ago, an entirely positive sign.

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Home builders go hat in hand to Washington for aid

It's becoming the exercise of the year that major industry lobbyists are sent to march up the long, stone steps of the U.S. Capitol and ask for federal help for their struggling businesses. The belief seems to be that Congress is the cradle of group therapy that will cure their problems by dishing out taxpayer money and somehow that will turn things around. The mortgage lenders have been there, the insurance lobby has been there, the banks, the car manufacturers, the list is long.

Now it's the home builders.

They did get a modest tax credit package passed in the spring but it didn't do that much good at all. Now they are aiming higher. Their latest proposal, which is called "Fix Housing First", seeks a home buyer tax credit of 10% of the property's value that would face a limit of $22,000. Moreover, their wish list has a 30-year fixed rate, government-backed conforming home loan product subsidized so that the rate drops to 3% for the first six months in 2009 and 4% for the rest of the year. The National Association of Home Builders, or NAHB, figures the interest rate initiative alone would cost only about $143 billion to the government.

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Mortgage interest rates again move lower

The Primary Mortgage Market Survey turned in a 5.97% rate for 30-year fixed, dropping for the fourth consecutive week. At the same time last year this Freddie Mac index stood at 6.10%. Most interest rates throughout the financial spectrum have been declining recently on account of the flagging economy. Less expensive mortgage money combined with falling home prices make housing more affordable, a development that ought to begin gradually improving the ravaged real estate market.

Foreclosures in Las Vegas ease up in October

Frankly speaking, it has been a tough year for Clark County, Nevada, where Las Vegas is, when it comes to residential real estate. One of the bright spots has been the availability of mortgage money at affordable rates that has kept matters on some sort of a path toward a distant normalcy. Wherever that might be. The solution to that largely rests on how soon the marketplace can first bring to a halt and then reverse the consistently high foreclosure rates here.

The statistics just released by Foreclosures.com for October seem to offer a ray of hope for Southern Nevada. Real estate owned, or REO, in Clark County fell to 2,653 from 3,563 in September, a nice well over 20% drop. Mortgage lenders are clearly in an aggressive mood to move unwanted property off their portfolios. What's more, preforeclosure filings also decreased, although more subtly, to 6,420 from 6,565 in September. Stats like these are nothing but eye candy to keen housing observers.

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Las Vegas developers already drafting new projects

Southern Nevada housing market is in a slump, a description that is widely accepted throughout the community. It started with the residential sector and has now spread over to the commercial and resort sides as well. There are some cautious signs that the residential real estate market is beginning to make some noise as resales, specifically in the lower end of the price scale, are attracting homeowner-candidates and long-term investors. To some it's a welcome indication that a turnaround is already visible on the horizon and they are busy making plans for future developments.

GSG Development is one of them, a local firm with a solid background in commercial real estate. It has set its sights on a Henderson parcel near the Galleria at Sunset mall where it proposes to build a mixed-use project that can be called ambitious. The around 1,600 residences that will be included in Park Heights come in many flavors; mid- and high-rise condominiums, garden homes, townhouses and live-work spaces. Some of these units will be housed in two 30-story towers. Besides residential, as expected, the draft calls for large amounts of office and retail space, a hotel and a civic building. The project still needs an approval from Henderson's Planning Commission before the first dusty shovelful of dirt is turned over.

Nevada tops thorny mortgage ranking

Silver State's housing market was wounded badly in the bubble that burst so spectacularly some time ago. Of course it's not alone in it but that's scant relief. Sales at least in Las Vegas have slowed to a crawl, although especially resales have picked up lately, prices have headed south and the inventory is still high. Now another statistic is published to reveal how deeply the real estate mess has affected the state.

Nevada leads the list that ranks states by how many homes each has upside down, meaning the existing mortgage balance is higher than the property is worth. This marvel is also called being under water. The figures were provided by First American CoreLogic that estimates that 48% of single-family houses here are caught in this menacing vise. An unpleasantly high number. On the other hand, comparable national number is 18%.

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Las Vegas real estate insiders discuss the local marketplace

Every quarter Southern Nevada housing experts meet up to talk about pressing issues in the industry and as is well-known now there are a lot of them to get into. It's aptly called the Crystal Ball housing outlook. Couple of items in the last meeting stand out for further commentary and deliberation.

One of them is new home construction. The real estate boom in Las Vegas was at its hottest roughly from 2004 to 2006. Right in the middle of that, or 2005, local builders produced 38,000 new homes when consumer demand then justified only 25,000, reports SalesTraq, a real estate research shop. That amounts to 13,000 houses out there that would not find an owner any time soon, a serious case of over-building. It's easy to see from that why the housing market here tanked so badly. It also causes many to scratch their heads over builders' ability to forecast demand. What happened to that important piece of business planning?

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Southern Nevada should learn from a past housing fiasco in California

As the U.S. Treasury, according to the recently approved rescue plan, prepares to buy distressed real estate assets to help the faltering financial and mortgage sectors get back on their feet, a real danger lurks in the shadows for Las Vegas. And other communities across the land. The example of what happened in California about 20 years ago will shed light on how the state's agony was prolonged for years.

That time the federal government's Resolution Trust Corporation was tasked with fixing the savings-and-loan meltdown, many still remember that, and it went ahead and executed an aggressive sales program of troubled real estate units wherever they were in California. To timely move the unwanted inventory prices were lowered and as a result sales were brisk. But the buyers were mostly investors who often flipped the properties for a quick profit. Ultimately a host of these homes became rentals and that further depressed property values in untold communities. To quickly solve the problem the RTC simply dumped real estate on the market without much concern for how it would play out in the long run.

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Las Vegas resales increase while prices decrease in September

Existing single-family houses continued selling well in Southern Nevada in September, as was reported by the Greater Las Vegas Association of Realtors, or GLVAR, that used the MLS for its statistics. All in all 2,783 single-family homes were closed, a nice upsurge from 2,545 done in August and a considerable improvement from a year ago when only 990 homes were sold. Sales numbers have steadily moved up all year, a hopeful sign of better days ahead.

The main reason to the accelerating sales is declining price levels that in turn are largely influenced by the record number of foreclosures. Median values have retreated by some 31% from last year this time which is a large swing. If that's what it takes, however, to get the housing market in Las Vegas back on track, then so be it. Market forces are powerful and will eventually bring much-needed balance to the local real estate environment. The median existing single-family house price slipped below $200,000 for the first time, a psychological yardstick that many thought would never be broken going down. It now reads $195,000 and could continue still lower in the coming months.

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Las Vegas seeks to benefit from HUD foreclosure measure

The Department of Housing and Urban Development, or HUD, has received a grant that totals almost $4 billion to aid cities and states embroiled in mortgage foreclosures. These funds in fact were put aside for this purpose in the recently passed Housing and Economic Recovery Act.

The effort has a fitting name, too, The Neighborhood Stabilization Program, and its aim is to let local and state governments, like Las Vegas and Nevada, use the available money under certain guidelines. They can tear down or restore abandoned homes and buy land temporarily to stabilize deteriorating areas and then promote redevelopment. To read the entire article, please click on the link.

Cosmopolitan condominium and hotel project proceeding toward completion

Earlier this year the Strip project ran into serious problems when the principal developer defaulted on a construction loan. Acting on the obvious decline of the housing market in Las Vegas the lead lender, Deutsche Bank, asked the developer to put more capital into it but he couldn’t get anything because the credit market by then was already having its own difficulties. Since months-long efforts to sell the high-rise, twin-tower undertaking were also unsuccessful, Deutsche Bank did the next best thing and took over the project for $1 billion, actually a nice discount from the original cost of $3.9 billion.

The bank, though, isn’t in the business of owning condo developments and casinos, so it is likely to sell it when it’s completed in late 2009. Currently construction is humming along on the site backed by an agreement reached months ago with the primary builder, Perini Construction, which has managed to adhere to the initial end date.

Deutsche Bank could make a handsome profit out of this if the real estate market, and specifically the condominium sector, does rebound in Las Vegas by the end of next year or even in 2010. It could take longer than that, though. Even if the recovery at first were only gradual it could come out of the situation halfway okay since it did acquire the property for a deep discount.

Another bonus is possible in the shape of the CityCenter project by MGM Mirage going up right now next door. It also is scheduled to be finished late in 2009 and its luxury presence will certainly become a plus for Cosmopolitan. Who wouldn’t want to be only a few steps away from The City within a City? Still, CityCenter will to some degree be competition because it’ll also have a sizable condo component within its multiple towers. Finding the right price ranges for its units should, however, give Cosmo great odds of selling its entire inventory in a timely manner.

Cosmopolitan is one of the rare condominium projects in Southern Nevada that are moving forward despite the difficult challenges in the credit and mortgage markets. The going was tough over the past winter and this spring but somehow it weathered the adverse conditions and is now on a solid footing.

Mortgage creativity went a tad too far

As the international audience today watches major U.S. financial institutions come apart at the seams because they were too carelessly and deeply involved in recently-issued mortgage securities, many experts are already starting to look for reasons to the obvious meltdown. There are many of them but it's hard to put the right weight on each. One of them ceratinly has to be the innovative programs the mortgage industry produced over the last decade or so.

Bringing new, creative products to the home loan marketplace is often invigorating and is normally accepted with open arms by all participants. Borrowers, whether purchasing or doing a refinance, could now find a program that fit them just right and at an interest rate that is affordable. Even many of those who couldn't qualify for a loan before were now able to secure financing and become homeowners. Lenders and mortgage brokers had more programs to offer that helped keep their production pipelines steady. Mortgage buyers on the secondary market, like the infamous Fannie Mae and Freddie Mac, were busy packaging mortgages into securities and selling them on, getting a solid fee at every turn. And the investors who bought these securities marveled at the yields they were receiving. Everybody was happy for the time being.

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Southern Nevada resales demonstrate staying power

The existing single-family house sales in Las Vegas in August were 2,545 which is a slight drop from July at 2,592, reported GLVAR, the Greater Las Vegas Association of Realtors. This number actually breaks a string of increases dating back six or seven consecutive months. When a comparison is made to August of 2007 at a paltry 1,316, it represents, however, a serious leap higher, 93.4% in all that can be called a significant improvement. Resales, although still heavily flavored by foreclosures, do remain healthy and need to stay that way to push this weakened market to a smooth turnaround. To read the entire article, please click on the link.

Las Vegas housing projects in outlying areas slowing up

A few years ago when the real estate boom was happily chugging along home prices in town were breaking records month after month. The predictable result was that many home buyers were beginning to be priced out. Smaller, established communities like Mesquite and Pahrump where land cost a lot less could offer affordable housing and they began growing steadily.

Besides them, developers were also drawing plans for new master-planned communities in the outlying areas, like Coyote Springs straight north from Las Vegas and White Hills in northern Arizona. Again, the key attraction with them was that housing out there would be reasonable. The city was still growing at a healthy clip, so it was entirely viable that any new development out in the distant valleys would draw an enthusiastic response.

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Las Vegas builder earns Developer of the Year honors

The green housing movement is making further gains as the consumer is becoming increasingly aware of how valuable its contributions are to the reduction of energy consumption and greenhouse gas generation. Concordia Homes, a Southern Nevada builder for years, was recently recognized by Las Vegas Business Press as the Developer of the Year in the green building category.

Concordia has for a long time produced homes using Energy Star guidelines, but then it reached a point where it felt it needed to do better than that. Energy-savvy home buyers were looking for more and it wanted to respond, so when it launched the Sommerset Community in Henderson, Nevada, it was going to go another step or two beyond Energy Star. As a result the signature equipment at the 48-unit development turns out to be the roof-based solar system installed in every home as a standard feature.

GE is the manufacturer of the system that it calls Energy Brilliance. It blends rather well with any roof and offers several years of maintenance-free operation. On the technical side, it’ll produce about 4,400 kilowatt-hours of energy each year. During low-consumption periods in the day the system will usually manage to feed power back into the electric grid, instead of taking from it. Wouldn't it be satisfying to watch the meter run backwards for a change? Especially in Las Vegas with plenty of sunny days, that’ll probably happen quite often. And that then translates into actual dollar savings to the homeowner.

Sommerset homes also come with a GE SmartCommand Envirodashboard, that’s a long one, that actually is an interactive display that keeps homeowners apace of their current and past power and water consumption figures. It can be useful in pinpointing areas where possible waste is occurring.

There are other improvements besides these incorporated into these homes and altogether they add from $20,000 to $25,000 to the price of houses there, which are priced from $295,000 to $339,000. Yet, according to Concordia’s estimates, the real-life energy savings will quickly make up for the cost premium. Well, sure, if the meter runs backwards, that'll do it.

Las Vegas land prices soften up, except on resort corridor

The way the residential real estate market today is going in Southern Nevada it's no surprise that raw land values here are heading south. Demand for land is way down as the housing sector struggles with a large inventory of new and resale homes. Even if a builder wanted to purchase acreage for a project, getting financing now would be a challenge in this lending environment. The slowing economy doesn't help much either.

In the second quarter median vacant land price stood at $570,279 per acre which turns out to be $148,232 less than at the same time last year, or a 21% decline, reports Applied Analysis, a local market research firm. The frenzied speculation of a few years ago has come to a stop and actually reversed course. Prices are now somewhere near where they were about three years ago.

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Southern Nevada luxury market under pressure now

All along it has looked as if the general real estate slowdown here in the Las Vegas valley would leave the high-end segment largely unmarked. Mortgage lenders felt confident for a long time about the viability of the luxury market and kept underwriting loans here for those who needed them. Many, of course, were able to close a purchase by bringing in a sack of cash and that was it.

The outlook has changed, though, quite a bit in the last year or so. The segment has slowed down considerably and is now going through the same type of adjustment that the rest of the market started couple of years ago. The evident overbuilding, the tighter mortgage environment and the slow economy are now adversely touching on it.

SalesTraq, a local real estate research shop, reports that sales of single-family homes and condominiums going for over $1 million nosedived during the first half of the year. 161 homes were closed during the first six months while at the same time last year there were 343 closings. That is a serious decline.

For one thing, it's all over town that mortgage banks have gradually tightened underwriting guidelines overall, including in this segment despite the fact that many of these buyers are financially well-established. Las Vegas being a resort destination, over a third of these high-end purchases are second homes and if the luxury condo end of it is taken alone, the percentage is even higher. Today, anything outside primary residence status is a touchy subject to investors buying mortgages.

Price stability also plays a huge role in this. There are several prominent condo projects here with names like Turnberry Place, Trump and MGM Mirage's Signature that commanded nice prices early on. Now those value levels are eroding as more units enter the market, either as resales or new, while demand is waning. Not surprisingly, lenders are taking a cautious approach to all luxury mortgage applications hitting their desks. And not only lenders, but buyers, too, will take another look at the potentially unfavorable price movement before making a commitment.

Las Vegas second home buying could be affected by new housing bill

The mammoth recent housing bill has gazillion provisions in it, covered in detail on about 600 plus pages of fine print. There is the potential mortgage refinance assistance for those in payment distress, there is the tax credit for first-time homebuyers who qualify and so on. Lots of material that when all of it is implemented and working in the months ahead it is expected to provide a helping layer of stability to the still wobbly mortgage and real estate markets.

One of the new stipulations touches on vacation properties and it can have an unknown effect on Las Vegas where a good portion of single-family homes and condominiums are purchased as such. In short, owners of these are going to lose the capital-gains exclusion when they are sold. During the last decade or so owners did qualify for the $250,000 - $500,000 for couples filing jointly - profit exclusion as long as they played the game of moving from a primary residence to a second home to another principal residence to comply within existing tax laws. But that sort of profitable hopping around will be over soon.

Las Vegas condos slow to close

Southern Nevada hardly had any condominium market just a few short years ago. Especially the high-rise component was pretty much non-existent, save the Regency at Las Vegas Country Club. Then the Turnberry Place was built and it proved hugely successful and things sort of got fired up from there. Over time Vegas had created a reputation that no matter how many new hotel rooms were built, they always got filled with eager visitors. Many of the developers who wanted to come to town and follow the Turnberry recipe, apparently bought into that same idea. Just keep putting them up, condos that is, and they'll come.

They did come early on in the boom cycle, that's true, but things have slowed down considerably now. Many who did recently have aspirations to purchase a unit here are holding off as the market reports aren't that favorable any more. Demand has nearly dried up in the more expensive price points and with that comes the inevitable, prices start sinking.

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Southern Nevada home sales increase again

Las Vegas homeowners and would-be buyers are anxiously keeping an eye on the local real estate market. Homeowners want to see the price slide to finally come to halt as they've already lost a large chunk of equity during the last few years. Prospective buyers are trying to gauge when the time is ripe to make a move and purchase a home before values start climbing again.

The situation appears to be slowly turning favorable for both groups. As reported by the Greater Las Vegas Association of Realtors, or GLVAR, prices seem to be stabilizing now. In May the median single-family house price moved up a notch from the previous month and in June it slipped 4.9%, so it's bouncing along within a narrow band now. The actual median price came in at $225,000. Compared with the June of 2007 price, the drop is much wider at 26.2% and that can make anyone wonder how did that happen.

The truly positive trend that has industry observers raving is the sales volume of single-family houses. According to GLVAR 2,226 homes were sold in June, up from 2,026 in May. But the remarkable thing here is the year-to-year improvement which grew a whopping 50.8%. That's right, 50 some percent better than in June of 2007.

As has been the case in the last several months, mortgage lender foreclosures again played a big role in the sales numbers. REOs, or real estate owned, have generally accounted for about half of recent closings, but in June they carved out an even larger share of the pie, 65% in all. Regardless, the key thing here is to burn the inventory further down as soon as possible.

Talking about the single-family house listing inventory, another critical element to a healthy housing market, it has edged upward over the last several months which still causes some concern. It moved higher an insignificant 0.2% in June to 23, 388 homes, but is lower by 1.1% from a year ago.

The real estate news from Las Vegas are cautiously getting better. Let's hope there is staying power to it.

Where is Las Vegas on this affordable markets list?

A few weeks ago MSN gave Sperling's Best Places a call and asked them to put together a ranking of most affordable places to live right now. The survey is officially called the 2008 MSN Real Estate Most-livable Bargain Markets list. Okay, kind of long but we'll take a look at it anyway. The criteria was as follows; concentrate on the 100 largest metro areas, find the most affordable ones by using the median income to median home price ratio, then take into account unemployment rate, commute times and the availability of decent entertainment and recreation.

Here are the top nine cities, each with a population over 500,000; Wichita, Kan., Omaha, Neb., Harrisburg-Carlisle, Pa., Madison, Wis., San Antonio, Indianapolis, Pittsburgh, Dallas-Fort Worth and Tulsa, Okla. It's a fine collection of urban areas that are offering residents reasonable housing and good job opportunities, two very important elements in today's trying economic environment.

To read the entire article, please click on the link in the first paragraph.

Las Vegas real estate numbers keep improving

May housing numbers for Southern Nevada are mostly positive. Not too long ago all the key indicators were heading in the wrong direction, but that trend seems to be now history. Recent history for sure, but history anyway. The one truly worrisome category that keeps churning out high figures is the foreclosure filings and it may unfortunately stay that way for a while longer.

On the positive front, as reported by local research shops SalesTraq and Home Builders Research, resales grew 5.2% in May as compared to a year ago, totaling 2,606 homes sold. Bank foreclosures played a large role in this as lenders have slashed prices to unload properties they don't want to keep in their books. Attractive pricing has certainly nudged home buyers and investors off the fence where they've been sitting for the last couple of years. Median values have slumped over 20% from the high of $290,000 in October of 2006. As sales improve, it could also mean that further price declines are unlikely.

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Super-luxury housing market still strong in Las Vegas

This segment seems to have it all figured out. It’s generally considered to include homes that go for upwards from $3 million at which level buyers seem to be little concerned about where the Las Vegas real estate market is, what mortgage rates are doing or how the national economy is behaving. They just go out to find a house to their liking and purchase it, often paying cash for it, too. As long as the money is available, it’s usually going to be an easy closing since there is no need to deal with underwriting issues, meeting conditions and that sort of stuff.

Some of the ultra-luxury sales in the last several months took place at MacDonald Ranch, Shadow Creek, Queensridge, TPC Summerlin and Panorama Towers. In 2003 the top price for a home sold in Southern Nevada exchanged hands at $4.2 million while that number increased to $17.4 million in 2007 for a Shadow Creek property, according to GLVAR, or the Greater Las Vegas Association of Realtors. Clearly the values keep going up nicely in this market segment, apparently pretty much immune to what is taking place elsewhere in the valley.

In a stark contrast, the semi-custom product usually in a guard-gated community that not too long ago ranged in price from $1 to $1.5 million is starting to show real stress. A host of them are now on the market for 30-50% less and local observers predict there is still room to go further down. It’s here where the tough economic times obviously have a real impact on the homeowner, especially when he sees the value of the home drop way low. To be several $100 Ks upside down will definitely make you think and some of them have decided to become “mortgage walkers”. They just hand the keys back to the lender and walk away.

All in all, the super-luxury and the lower-end and mid-range segments seem to be holding up rather well at this point. It's the upper mid-range home that is still going through a serious correction.

Mortgage lender REO count grows

Recent statistics, especially on sales numbers, have instilled some optimism among consumers that the distressed real estate market is about to bottom out in many areas of the country. Maybe it is and that would be a welcome boost for the industry, and also for the beleaguered mortgage lending community. On the other hand, though, perhaps a few more tough months lie straight ahead.

That is what First American CoreLogic, a research shop from California, is indicating in its latest foreclosure report compiled from bank and county sources. Investors in home loans and mortgage lenders together had in their books roughly 660,000 homes by April when the count was 493,000 in January. And in January of 2007 the number was a paltry 231,000. This spring the pace has clearly accelerated and throws a grayish cloud over the hoped-for recovery.

Las Vegas has experienced a moderate increase in home sales in the last few months thanks in part to lenders aggressively dropping prices on their REOs, or real estate owned. Similar trend has taken hold in other hard-hit areas across the land, too. By doing that, the theory goes, it's better to lose a little if values keep decreasing than lose a lot by holding onto the vacant, money-losing property.

Some mortgage firms have read the tea leaves differently. To minimize losses, or even avoid them altogether, they have actively sought out homeowners in distress to work out something so that they can stay in the house. The idea is to completely bypass the REO scenario. Making the loan terms more palatable could solve the problem, or stretching out the payment period might fix it. This approach appears to be more of a win-win nature to both sides, but for some reason it isn't used as much as many would think.

One good thing coming out of the assertive price-cutting alternative to REO sales is that this way a realistic, lower housing value plateau for the area is reached faster. From all appearances Las Vegas seems to be following this route. When median household incomes and real estate prices settle to a workable range the market will cure itself and return to normalcy.

Las Vegas condo-hotel market cooling

Condominiums that can be doubling as hotel rooms was introduced a few years ago as a new concept to Southern Nevada, likely migrating here from Florida where it had already seen quite a bit of success. Vegas being such a hot-spot tourist magnet world over proved to be a fertile ground for the idea. Developers quickly realized the opportunity and were soon elbowing their way to authorities to get building permits. A frenzied housing expansion was already gathering steam in town when this phenomenon was discovered and what it did was add a smaller side boom to merge with the larger general boom.

All good booms come to an end one day, though, as the single-family house and townhome segments in Las Vegas have already proved with their soft performance of late. Now it's the condo-hotel's turn.

To read the entire article, please click on the link in the second paragraph.

Las Vegas pre-foreclosure filings drop in April

Las Vegas real estate market is doing all it can to shake off the jitters that have bothered it for a long time. Since it took a while to get buried this deep into the housing and mortgage mess, it'll likely take at least as long to completely wiggle out of it. That's just the way it is. Nothing is going to happen overnight.

Another positive foreclosure statistic was released this week. The California online research shop Foreclosures.com reports that Clark County, more or less Southern Nevada, logged 4,426 pre-foreclosure filings in April. This figure is a sizable decrease from the record March filings of 6,152, a very welcome development.

To read the entire article, please click on the link in the first paragraph.

Coyote Springs put on hold for now

Development in metropolitan Las Vegas is pushing in all directions, along the cactus-dotted desert floor and up and over craggy foothills and mountains surrounding it. When about 5,000 to 6,000 people move here every month there has to be housing and services for them, but as developable and reasonably-priced land is becoming increasingly scarce, the city is logically forced to spread further out.

A few years ago another master-planned community was announced straight up north about 60 miles from town, way out in the high desert, named Coyote Springs. It's a 40,000 acre spread that'll hold 159,000 homes one day and will have thousands of acres reserved for parks, trails and nature sanctuaries. According to the primary builder, the project is outlined to be "sustainable and environmentally responsible".

To read the entire article, please click on the link in the first paragraph.

Las Vegas housing market slowly improving

As the spring advances toward summer, the Southern Nevada real estate scene continues to show signs of gradual improvement. The long-expected recovery is still fragile and is in its early stages, so it'll be a while before things return to a more balanced market environment. The mortgage industry, despite its own problems, is one key sector that has been helping all along with low interest rates and its cooperation will be sorely needed in the future, too.

In the month of April there were 1,794 single-family home sales in Las Vegas, up about 20% from March, reports GLVAR, or Greater Las Vegas Association of Realtors. This turns out to be the fourth consecutive month when the numbers have grown, and done so decisively, a very encouraging trend. In addition, the sales figure is almost 30% higher than the one from April of 2007, another piece of good news. So, the sales side is doing very well right now.

Home values, on the other hand, are still a concern. The median price of a single-family house retreated 3% from March, settling at $235,875, according to GLVAR. This translates into a nearly 23% drop from last year. The main reason here is that banks have assumed an aggressive stance toward foreclosures weighing down their balance sheets and are now offering them at below-market prices. By the way, over half of the homes sold in April were foreclosures.

The MLS inventory still remains high, edging up marginally from March to 22,942. This is the fifth month in a row when it hasn't really moved much either way. As long as it's not increasing this can be considered a positive development, although industry observers are waiting for the day when it begins heading down.

Station Casinos' lofty goals may include condos

Station Casinos runs a host of successful gambling halls in Las Vegas for the local clientele and is continually building new ones in strategic locations. The Aliante Station in North Las Vegas is the next property to open its doors, scheduled to do so late this year. The company is also set to break ground on another gaming facility up in the northwest section of the valley, at Durango and 95. And they have more land in Southern Nevada to do more of the same when they find the time is right.

It seems to be right for the Viva, a tentative name for a huge project Station Casinos is planning to develop at Tropicana and I-15, in the northwest corner of the intersection. The land parcel measures 110 acres in all, so it can accommodate quite a few buildings and facilities. It's probably going to take a few years before construction begins, but a lot of time nowadays is being spent on it.

To read the entire article please click on the link in the first paragraph.

Las Vegas housing prices turn more affordable

The current crunch that descended on the Southern Nevada real estate market is slowly working on what it is designed to do. It was invited to the valley by stark economic realities that had learned the bazaar had grown overheated and was actually about to spiral out of control. Home prices were zooming, builders were putting up way more houses than was needed and the mortgage money was cheap and accessible to just about anybody.

The crunch watched the frantic housing activity for a stretch and then saw it best to intervene, swooping in to save the day. And its actions are finally starting to produce results.

Home values here have been retreating steadily and are seemingly nearing the bottom. It's one of the three main segments in the overall market that went out of whack. The other two were anemic sales and the excess supply of new and resale houses, or the inventory.

Please click on the link in the first paragraph to read the entire article.

Mortgage and real estate scams alive and well

Now that the mortgage and housing markets are together going through tough times scam artists have come out to sniff for opportunity under just about every rock. They are shamelessly preying on the unaware. The numbers alone tell the story, as FBI's Financial Crimes Enforcement Network, or FinCEN, registered almost 15,000 SARs, or suspicious activity reports, in the first fiscal quarter of 2008 and plans on getting over 60,000 of them for the entire year. Fiscal 2007 had 46,700 and 2006 35,600. That makes for quite an upward curve for the last three years.

And those figures are only part of the story. Banks under federal scrutiny are the only ones required to record SARs while those home loan lenders who fall outside the reporting regimen make up a good majority of the total loan activity. The problem, therefore, is much larger than what these FBI statistics reveal and the current regulatory structure appears to be unable to stop it.

Please click on the link in the first paragraph to read the entire article.

Photo by sellabode.

Mortgage foreclosures more common in Las Vegas suburbs

Very little has changed in the last few months. Nevada still ranks as number 1 in the country in mortgage foreclosure filings with 18,087 for the first quarter of this year, according to California firm foreclosures.com. The state just can't seem to shake that undesirable position. Clark County has nearly 16,000 of that total which in turn aims the red spotlight right on Las Vegas.

The noteworthy aspect here is that the large majority of the foreclosures are in the outlying suburbs. In the new home subdivisions where builders large and small kept putting up house after house during the recent exceptional boom. By zip code the two top "performers" are 89131 in northwest valley and 89031 in North Las Vegas, as tallied by the research shop SalesTraq.

Most of the investors who came to town to fuel the runup in prices bought new houses. They signed contracts while the homes were still under construction, then contently watched as the builders kept hiking the prices due to high demand and when they took possession, the property was promptly sold at a nice profit. They are actually called flippers because of the quick turnover.

Another thing that attracted them to the new subdivisions was the flexible mortgage service the builders provided. It became like an assembly line for the developers to put through buyer after buyer to their spanking-new homes and the mortgage process was just one easy step along the way. Just about any flipper would qualify for a loan, one important reason why the sales figures soared.

The outlying suburbs also attracted upward-mobile homeowners who were seeking bigger houses so they could brag about it at work and on the golf course. Many really didn't need a larger home but the status factor made them throw prudence into the wind. Besides, the builder was so accommodating with the financing and the value increases showed no signs of slowing down. How can you go wrong in that kind of a real estate market? Getting a big house was one thing, the bonus was to turn into an instant and successful investor on the side.

The end game of those excesses is being played out now.

It is quite ironic how the business cycle works. The new subdivisions were getting most of the action when the market was hot a few years ago in terms of sales and price increases. It's getting most of the activity again, only this time on the downward side of the curve with foreclosures and price decreases.

Southern Nevada real estate market warming up

March was a promising month for Las Vegas residential real estate. Spring is here and people are finally starting to believe that now is probably as good a time to buy a home as any. Mortgage rates continue to be under 6%, meaning that end is still favorable, and prices have decreased quite a bit, so there are excellent deals out in the field right now that may not last all that long.

GLVAR, or Greater Las Vegas Association of Realtors, disclosed that 1,478 single-family homes closed escrow in March which is a 34.6% jump from February, representing the third monthly hike in a row. That is very encouraging. This is one of the three important components that determine the market's health and it's moving steadily in the right direction.

The noteworthy item here is that 52% of the sales were foreclosures and short sales, or properties that are going for less than the underlying mortgage. It's more and more common now that these listings are getting multiple offers and the surprising volume is in fact putting a bit of a strain on short-staffed mortgage lenders and title firms. Isn't it nice to be busy again.

The second component in the big scheme of things is the single-family house inventory level and that actually inched up again, to 22,763. It's a 1,2% increase from February. Not much, but still up. When it begins heading down it signals improving strength for the market.

The third factor is the price. It gave ground in March, a negative sign. Just a bit, though. The median price slipped 1.4% to $243,169, but is off a somber 20.3% from a year ago.

All in all, one component is solidly positive and the other two are getting closer to being there, so the market is working hard to right itself. Cautious optimism is taking over.

Mortgage refinance made troublesome

The residential real estate markets in many areas of the country are plodding along in high weeds. When that is combined with a home loan industry that is grappling with serious balance sheet tremors, the situation is ripe for a healthy head scratching for a homeowner who needs to refinance his explosive mortgage. As if that isn't enough reason to take a deep breath, there is another new, potentially crippling twist to the scenario.

The refinance process can turn murky, even impossible, if a second mortgage is involved. It usually is subordinate to the 1st loan, so in case of a default the 1st loan is paid off first and what's left goes to satisfy the second. Clearly the second mortgage holder takes a bath if the sales proceeds aren't enough. To read the entire article, please click on the link in this paragraph.

Two Las Vegas condo and hotel projects in financial straits

Home buyers and refinance hopefuls are currently struggling with a mortgage market that has retooled its guidelines several degrees harder. They aren't alone, however. The same thing is now happening to the commercial finance sector, too. Even major developers are finding it difficult to secure financing for their projects and if they find it, it comes at a cost that may be too high to make sense.

A few weeks ago it was reported that the Cosmopolitan had worked out a tentative deal with Global Hyatt Corp. and Marathon Asset Management who would recapitalize the troubled condominium and hotel undertaking on the Strip, next to the under-construction CityCenter. The details were supposed to be worked out by Thursday, but the deadline was missed and now Deutsche Bank, the main lender, has informed the principals that foreclosure papers are being filed on its $760 million loan. Please click on the link in this paragraph to read the entire article.

Las Vegas Sands has grand plans

First the rapidly-growing hotel, gaming and resort company built the Venetian at the corner of Las Vegas Boulevard, better known as the Strip, and Sands Avenue to compliment the huge convention facility Sands Expo Center. It promptly became a major hit among convention goers and up-scale visitors to town. Since the demand was there, they soon went ahead and built the luxurious Palazzo next door, opening it in January and connected it directly to the Venetian.

There is more in the pipeline, though. A piece of prime land sits right in front of the Palazzo and the owner of that wanted to put a shopping center on it and repeatedly declined to sell his prized holding, so Las Vegas Sands negotiated an airspace agreement with him that allows the construction of a 400-unit condominium tower above the street-level shops. That's a first for Las Vegas. Airspace deals and other tight building arrangements are common in New York and other large metropolitan areas, but not here. To read the entire article, please click on the link in this paragraph.

Las Vegas housing market report mixed

Southern Nevada residential real estate market is actively seeking a solid foundation to stand on. Some of its more meaningful components are either moving up a little or heading down a bit, instead of going steadily in either direction. The positive thing is that the shifts now are minor which usually indicates the correction here is nearing the end of its cycle.

Local housing experts are loudly cheering the 11.7% increase in sales of single-family houses in February, as was reported by GLVAR, the Greater Las Vegas Association of Realtors. The total came to 1,098 sales. A considerable 41.5% of the transactions were short sales, where the property is bought for below its mortgage balance, or lender-owned homes banks unloaded at discounted prices. Regardless, the main point is that the buyer appears again to be showing some confidence in the market and is willing to act on the opportunities out there. To read the entire article please click on the link in this paragraph.

The picture above is from UNLV campus in 1969. Observe the vacant land all around.

Summerlin introduces creative real estate marketing

Like so many other housing markets across the country Las Vegas, too, is feeling the adverse effects of tightening mortgage guidelines, slumping home values and skittish buyers. It's a major task to sell a property under these testing circumstances.

Real estate agents, FSBOs, banks, whoever is selling, have burned the midnight oil in a quest to discover marketing tools that work. Wide screen TVs have been offered as enticements, vacation packages, cars etc., they've all been put into action. House auctions became popular a while back, although the results with them have been mixed.

One of the latest innovations in Las Vegas is the Foreclosure Express, simply an airport shuttle bus with appropriate signage that seats 24 passengers. It's run by a local agent team that for now takes buyer candidates out to tour foreclosed homes in Summerlin. The concept has been successful enough that the plan is to expand its reach across town to Green Valley, Henderson and North Las Vegas. Selling a house is all about exposure and this ought to help.

The reaction in Summerlin neighborhoods the bus has so far visited has been lukewarm at best. Homeowners obviously feel that this approach will deflate their property values even more. It certainly might in the short term. But the benefits of moving vacant foreclosed houses as quickly as possible seem to outweigh the price decrease. The distressed homes become eyesores for lack of maintenance, vandalism is always a threat and the area's property taxes are likely to increase because foreclosed homes drop out of the collection roster, to mention a few of the drawbacks.

In addition, Southern Nevada is amidst a painful residential real estate correction and the sooner it runs its course, the faster the eventual recovery can begin. That will benefit in the long run every homeowner in town.

Las Vegas condos land on non-permissible list

When the residential real estate market turns soft, mortgage lenders typically are the first ones to take notice and begin studying where their exposure can get them in trouble. Countless banks operating in Las Vegas have already in their own way reacted to the slowdown here and more are certainly doing so as the situation warrants.

BankUnited from Florida has paid particular attention to the condominium market and has decided to cease underwriting mortgages on 191 projects nationwide, 14 of which are here in Southern Nevada. The bank is hardly an household name to many in the business, but its action underlines the present difficulties the sector is experiencing. Most of the black-listed condos are in the Miami area. To read the entire article, please click on the link in this paragraph.

Palms Place just about ready for occupancy

The condominium tower standing west of Palms Casino Resort was recently granted a temporary certificate of occupancy by Clark County. Buyers who have purchased property there may now close on them and start ferrying in furniture as early as February 29.

The project will add 599 units, ranging in size from a 600-square-foot studio to a 1,200-square-foot one-bedroom suite, to the already saturated Las Vegas condo scene. In addition, the building's highest four floors hold 21 penthouses that are still being worked on and are scheduled for completion in May. Despite the currently soft real estate market here in Southern Nevada, the stellar, celebrity-flavored reputation of Palms should give it an extra boost in selling the condominiums.

Palms Place is also a condo-hotel where owners can allow the hotel to rent their units out when not occupied. In this arrangement the parties split evenly the collected money and Palms does not guarantee any revenue to the owners. According to the hotel's projection around 80% of the condos will be handled in this manner.

Some of the celebrities who have already bought units there are Eminem, Jessica Simpson, Hulk Hogan and guitar player Paul Stanley of Kiss. In marketing the tower these names will admittedly come in handy.

Mortgage lenders and new "redlining"

The nation's home loan companies have been battling deteriorating housing market conditions for some time now and that has caused severe losses for many of them. Property values are dropping in several areas and borrowers in these markets increasingly face the threat of foreclosure as their exotic ARMs reset higher and make payments unmanageable. Times are tough on both sides of the fence, to say the least.

In an effort to stem the bleeding, mortgage lenders have instituted a bunch of new policies, one of which has drawn pretty heavy criticism from consumer advocacy groups and some in the lending industry itself. They call it new "redlining". It all started when Fannie Mae in December announced that from mid-January on it would require an extra 5% down payment from loans originated in declining areas. To read the entire article, please click on the link in this paragraph.

Las Vegas resale house inventory stable

Single-family home inventory for January stayed flat, announced Greater Las Vegas Association of Realtors or GLVAR, after having declined gradually for four successive months. That can still be categorized as positive news on account it didn’t go up. The market appears to be firming up, possibly managing in the coming months to nurse the numbers further down.

The movement in prices continues to be the sore spot. Single-family house’s median price sagged 17.3% from January of 2007, settling at $249,900. Foreclosed homes made up 38% of sales, becoming a major factor to the rather steep drop. It’s very likely that foreclosures and short sales will keep influencing the market’s performance because thousands of investors who bought mortgage-backed securities in the past few years are now permitting lenders to sell off their real estate holdings. That will bring an untold number of properties to the market in the next several months and put more strain on prices.

It’s clear that presently REOs, or bank-owner real estate, hold the near-term fate of the Las Vegas marketplace in their hands. The sooner the bulk of them is liquidated, the faster a sustainable recovery can get up and running.

Steve Bottfeld from Marketing Solutions believes the market in the valley is about to stage a decent comeback this year. He predicts a 10% rise in resale values and 8% for new homes. His crystal ball might be right.

Large Las Vegas developer seeks to renegotiate loans

The flagging Southern Nevada real estate market is giving major headaches to developers large and small. The overbuilt housing environment and the mortgage industry woes as one-two punch are putting tremendous pressure on them as they look for ways to survive. It's actually somewhat of a surprise that so many of them have hung in there this long.

Focus Property Group is one of the bigger developers in the Las Vegas valley and it recently announced that it'll cease making interest payments on several loans totaling $500 million. The debt is secured by land located in Las Vegas, Pahrump and Victorville, CA. The company is well-known in the area for actively buying vast tracts of land in the Bureau of Land Management auctions, often persistently outbidding the competition.

Focus relied on hard money lenders to finance the land acquisitions, firms that get funds from private investors and then lend that to developers on short-term basis and usually at interest rates in double-digits. In a market downturn like now, this type of financing quickly becomes harder to satisfy than the usual mainstream arrangements.

The developer has hired the Blackstone Group to advise it on restructuring the multiple obligations and it's not planning to file for bankruptcy. For one it's hoping for forbearance on the interest payments for up to two years. It's also gazing into the future and sees that the real estate and mortgage chaos will likely pass in a few years and the Las Vegas market will predictably become viable again. That assessment certainly has many backers in the local business community. The promising future here might convince its lenders to work out a mutually acceptable solution to the debt dilemma.

Las Vegas housing weak in 2007

2007 was one of those years in Las Vegas residential real estate that many will remember for a long time. The glut of homes on the market, new and resales alike, from single-family houses and townhomes to condominiums, put tremendous pressure on prices. On top of that the mortgage industry ran into homeowner and investor payment problems and as a result foreclosures began to rise steeply. In summary, it was an ugly year.

New home sales totaled 19,670 for all of 2007, a serious 45.6% decline from 2006. On the resale side last year's final number was 24,838 which amounted to a 40.7% drop from 2006, as was recorded by Home Builders Research. Combined sales haven't been this low since 1997 when they were 39,187. This last comparison alone is enough to indicate how far the market has thus far dropped.

The price structure has pretty much followed the same path. The median new home value decreased 20.1% to $273,359, while the existing one slid 11.2% to $253,000. The importance is that today's median is at about the same level with 2004, erasing some hefty gains made that year and to some degree the next. As the market seeks to recover its health those absurd appreciation rates at the pinnacle of the boom are being neutralized, which really is the only route to go.

Yet, despite the obvious weak spots in the mortgage and sales sectors, the market is ripe for the taking by the buyer. Home loan interest rates remain low and prices are rather advantageous, so what else can he ask for.

Las Vegas condominium project faces difficulties

The frustrating mortgage lending environment and soft residential real estate market in Las Vegas are testing the resolve of many condo developers. Several projects in the past few years have been cancelled or put on hold. Some that are presently under construction are struggling to attract buyers offering their usual amenities, so they have done the next best thing and lowered prices, sometimes substantially. But even that hasn't always been enough, though.

Newport Lofts is a downtown condo project being built by West Seegmiller that had recently advertised an auction of 60 of its units, priced from $229,000 on up. Evidently sales had been lagging, so an auction became a viable option. Soon after the announcement one of the lenders, Pyramis Global Advisors which is the institutional asset management arm of Fidelity Investments, decided to intervene and assumed control of the 23-story development. That effectively cancelled the planned auction.

To read the entire article, please click on the link in the first paragraph.

CityCenter condos selling briskly

MGM Mirage's CityCenter is a massive entertainment and residential enterprise located right on the Strip south of Bellagio. Construction is moving on schedule and the project is estimated to open its doors in November of 2009.

The development will have a total of 2,650 luxury condominiums in four separate buildings, namely in Veer Towers, Mandarin Oriental, Vdara Condo Hotel and Harmon Hotel. About half of the available units have been sold to date which has produced $1.63 billion in revenue, nearly 60% of the total projection at sell-out.

It could well be that all of them are sold by the opening day. Las Vegas residential real estate in general is struggling today under the weight of overbuilding and a fluid mortgage market, but it obviously hasn't affected the upscale condo sector. The one where units go for over $1 million each. It is operating at its own level, as per square foot prices ranging from a whopping $1,500 to $3,000 at CityCenter prove.

The last property to offer its condominiums to the public is the Harmon Hotel, Spa & Residences which began sales this week. Besides the 207 condos, the resort will have 400 hotel rooms in a 47-story tower and it'll only be accessible to hotel guests, unit owners and diners at Mr. Chow. It'll be a private venture, but still be connected to the entire collection of CityCenter's amenities. The project is managed by the Light Group, better known for operating trendy nightclubs and restaurants in MGM Mirage properties.

Las Vegas single-family house inventory drops again

For the local real estate market the new year starts with some rare positive news. The Greater Las Vegas Association of Realtors, or GLVAR, released its December statistics and they show that the single-family house inventory in the MLS decreased to 22,005, a drop of 1,489 units from November.

Some may argue that December is traditionally slow, which it is, yet the inventory has been slowly sliding since August and that is significant. It's a four-month trend that cannot be ignored. It just might indicate that the housing sector is cautiously heading toward a working balance between supply and demand, which eventually will translate into a more stable marketplace.

In other categories, the single-family inventory, although now falling, is still 23.4% higher than a year ago, so there remains work to be done. The condominium and townhouse listings grew 14% from December of 2006.

The median price for a single-family house declined 15.1% from last year, standing now at $260,000. The price level is moving down to narrow the boom-widened gap with the average household income, a necessary development for a healthy market. It wouldn't be surprising at all if it went even lower in the coming months.

December sales were down 46.5% from a year ago, about where it has been for several months. Over one-fourth of them were either bank-owned, or repossessed, homes or short sales, which is noteworthy. Banks don't want to own real estate, so they often sell homes for less than the appraised value and that pushes the median price point lower. Sort of an artificial adjustment. This may continue well into 2008 as thousands of exotic adjustable rate mortgages, or ARMs, will reset higher during the year and predictably bring about more foreclosures.

The housing inventory slipping for several months in a row is welcome news, but as the other numbers describe, the market still has a way to go.

Las Vegas condo owners sue developer

Just like the rest of the real estate market in the Entertainment Capital of the World the condominium sector has fallen on hard times. Units for sale are sitting unsold for months on end and prices are dropping. That makes a lot of owners nervous, especially those who are in it as investors.

A group of them at the Signature, the MGM Mirage - Turnberry Associates condo-hotel project with three towers, has decided to sue the developer for fraud, for selling them high-rise units that are unprofitable. Yes, that is the reason for the legal action. Unprofitable condos. Disputes typically arise when deposits are paid and then the project fails to get off the ground or when the building opens with material defects and missed features. As is evident, this particular grievance is rather unusual.

According to the complaint, the developer enticed them to purchase condominiums that would bring net profits when they are rented out, in addition to the potential for appreciation. In this setup the owners would have a management company rent their units to visitors when they are unoccupied. But for many owners rental incomes haven't even been enough to cover the underlying mortgage payments and high maintenance fees, much less bring a profit, and they feel exploited.

On the surface it appears to be very difficult to prove that the developer is at fault. The profit assurance assumably wasn't included in any written contracts, so what promises the sales agents orally made is hard to establish. It really is the investor's responsibility to do his homework before signing anything and if the market turns, like it has now done, it's just part of investing, and also a learning experience. Seeking help for a questionable business decision making from the courts is stretching it.

Photo by Steve Marcus