Posted by Paul Francis on Sunday, September 12th, 2010 at 3:05pm.
Las Vegas Real Estate News
A quick recap of news for Las Vegas Real Estate:
(Please note – Just passing the word with some commentary. Contact me.)
HUD Secretary Says Las Vegas Home Values Stabilizing- Las Vegas Sun – Buck Wargo – 09/11/2010
“The Las Vegas housing market remains vulnerable because of the weakness in the economy, but it has shown signs that it’s starting to stabilize, according to U.S. Department of Housing and Urban Development Secretary Shaun Donovan.
Donovan appeared in Las Vegas on Friday to highlight $35 million in additional federal funds for the department’s Neighborhood Stabilization Program in which local governments redevelop abandoned and foreclosed homes.
His visit to Las Vegas comes as home sales have started to slow since the expiration of a federal tax credit in April while home prices have remained fairly steady for about 16 months.”
I posted something about the Neighborhood Stabilization Program some time back that you can read here:
Neighborhood Stabilization Program for Las Vegas – 01/22/2010
Make sure you read down to the part where I found out what the NSP really is or just go to the part of that post that begins with: What is The Neighborhood Stabilization Program?
That post was followed up with a couple of months later concerning the Private Sector competing with the Public Sector for Las Vegas Homes after I saw an article in the Wall Street Journal about Las Vegas Real Estate that you can read here:
Private Las Vegas Real Estate Buyers competing with the Government – 03/03/2010
Is a Government Agency / program going to do more for neighborhood stabilization buying homes and leasing them back out then the private market?
Is a Government Agency going to be more efficient in rehabbing homes with “approved contractors” then the private sector who will use the most efficient contractors? (I know a couple of Private companies that specialize in this and I highly doubt that anybody is going to do a better job then them.)
Is $30 Million dollars competing for homes in a market dwindling with supply creating higher home prices for first time home buyers?
Does this program really help current homeowners whose home values have lost so much in equity?
One month later… first time buyers and their agents are clamoring to buy anything they could and submitting offers higher then the list price just to get something before the first time homebuyers tax credit expired on 04/30/2010.
I also have to question why a program like this is needed in Las Vegas when home values have already dropped 50% from the peak. Stabilizing them at this point certainly does not help the Las Vegas home owner who has become unemployed and has a $400,000 loan for a Las Vegas home currently worth $200,000. Las Vegas Short Sale Programs would certainly be more beneficial in my opinion.
Regardless.. The Secretary of HUD feels that Las Vegas Home Values are stabilizing. I just wanted to point out what the Neighborhoood Stabilization Program is since there seems to be a lot of hoopla around it in the media for the past couple of weeks. Yes… I know elections are coming up. 😉
Las Vegas sees Largest Monthly Tourism Gain since 2005 – Las Vegas Sun – Amanda Finnegan – 09/10/2010
Las Vegas Resorts and Casinos have done their part to slash room rates to make Las Vegas a VERY attractive bargain. Results… visitor volume goes up for the biggest % monthly gain in comparison to the same month a year ago. (July)
Great news since Las Vegas runs on tourism. Come to Vegas, spend money, tip well and hopefully that money finds it’s way into the actual local Las Vegas economy. I’ve noticed that the local Las Vegas businesses that have caught on that people don’t make as much money as they used to and have slashed prices are busy. Maybe these businesses are not making as much money as they used to… but at least they are open for business.
Somewhere I have a great article on the relationship between tourism numbers and unemployment. Something to the tune of how many visitors it takes to support the Las Vegas population that has been consistent for a good 20 to 30 years. Pretty fascinating article that I read in a local Las Vegas magazine that I can’t seem to find online to highlight.
Something to note here though: City Center Las Vegas was not open in July of 2009.
Without warm bodies visiting Las Vegas…. we end up with:
All Signs Point to Continuing Las Vegas Exodus – Las Vegas Sun – Jean Guerrero – 09/02/2010
No surprise here. When you talk to the right people you get the truth about what is really going on. The Census Bureau estimates that 1,000 more people left Clark County then moved here in the period from July of 2008 to July of 2009. I’m expecting that number to be much higher from July of 2009 to July of 2010 from my discussions with Las Vegas home sellers.
Occupancy percentages at extended stay motels have also dropped dramatically which is another sign that people are not moving here. I’m not sure if it’s because the rates for these place are too high and apartment complexes are offering better deals so new people are just moving straight to apartments (or buying) or something else. I’ve seen some really good deals for furnished units owned by out of staters/investors that are much nicer then the extended stay places or find the right Las Vegas Homeowner who has a vacant home and is going through foreclosure… you can get a really good deal for a short term stay. (Perfectly Legal as long as the owner has disclosed everything going on to the short term visitor.)
Tracking the number of people that actually live in Las Vegas has always been whacky and hard to determine since it’s so transient in nature. The whole Driver’s licenses issued number claim for how many people are moving to Las Vegas has always been a scam since it never took into account how many Nevada Driver’s licenses were turned into other states.
Once again… Visitor Numbers are tied in directly to how many people in Las Vegas can be supported as mentioned in the commentary about the Visitor Volume report above. Build all the resorts you want.. unless visitor volume goes up, then every new resort that is built is just taking business from the older resorts.
Greater Las Vegas Association of REALTORS August Sales Report – 09/09/2010
“GLVAR reports slower sales, higher home prices in August
Local housing statistics released today by the Greater Las Vegas Association of REALTORS® (GLVAR) show fewer home sales but higher prices in August compared to the previous month and year.”
Key things to note when reading the report above:
The Median Las Vegas Home price going up does not mean that Las Vegas real home values are going up. The Median Las Vegas Price is simply the middle sales price of all the Las Vegas homes sold. Half of the sales were below $140,000, half of the sales were above $140,000. This has always been confusing for people who do not understand statistics and think that it means appreciation.
I’ve personally witnessed a larger number of potential Las Vegas home buyers in the higher price ranges. One of my Summerlin Listings had multiple viewings the first two days I put it up for sale with offers coming in three days later. It was priced right on the numbers since I don’t believe in the list it for a lower then current market value game. Meanwhile, my listings in the lower price ranges have had a drop in buyer traffic. When I met with a Regional Asset Manager for a Lender this past week, he’s seen the same thing with the lower priced Las Vegas homes. Quite interesting to say the least.
Cash Buyers remained near record highs at 45.9% for Las Vegas homes. Cash buyers are extremely important for stability since it’s kind of obvious that they are not just going to walk away from their homes. Obviously there is no mortgage…
Inventory increased and sales went down. No surprise since the first time homebuyers tax credit ended and I expected that. We still have a lot of Las Vegas homeowners buried in their mortgages and owing far more then what their Las Vegas homes are worth so there is going to be no shortage of inventory. I’ve also come across some new potential short sale sellers where their unemployment benefits are completely over and have held out while looking for a new job. They now have No income to continue and we are in the works of applying under the HAFA short sale program to try to get some relocation money thrown in so they can move.
Keep in mind that we have some months coming up that are going to show a big drop in Year over Year sales numbers and that’s because the First Time Homebuyers Tax Credit was Originally supposed to end on 10/30/2009. That created a rush in sales to beat the original deadline and an increase in sales. So when the gloom and doom percentages hit on how much sales percentages dropped…. well you’ll know why.
(Unless of course another program is rolled out but the HUD secretary in the first article listed says that’s not going to happen.)
The Biggest surprise to me in this report was the number of Las Vegas REALTORS listed in the disclosure being only 12,500. That number has dropped quite a bit in a few years due to the challening Las Vegas Real estate market.
Other News
Investors Take on HOAs and Associations may Suffer – Las Vegas Sun – Buck Wargo – 09/07/2010
Read Full Story Here
Ask any Las Vegas Real Estate agent that does short sales what they think about the amounts racked on in these fees and they’ll tell you what they think. I’ve seen more then one deal blown because a couple of thousand in late HOA dues ends up turning into a $12,000 bill with a bunch of junk fines tacked on. The buyer certainly did not want to pay them, the seller could not pay them and the bank certainly did not want to pay them. Short sale deal cancelled… let the bank foreclose on the property. In my example above, the lender ended up selling the home at the Trustee sale to an investor that I’m pretty sure got stuck with the bill.
Personally… I now require my Las Vegas short sale sellers to keep their HOA dues current during the short sale process. I can see adding reasonable fees for being late, but $100+ to send a letter to the seller saying they are late is ridiculous in my opinion. HOA’s need the money to operate and should be paid but all of the junk fees tacked on that can easily double the amount of past dues should be stopped. Las Vegas homeowners are strapped as it is and insult does not need to be added to the injury.
Investors are not bitter about paying the past due HOA fees… they are bitter because of all the junk fees tacked on. Tack on a 10% late penalty rate and leave it at that… problem solved.
Paul Francis, CRS
Prudential Americana Group, REALTORS
Las Vegas Real Estate
702.592.3058
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