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.