The next table shows available inventory in the market as of today and the story is tight inventory in the lower price ranges. The third table shows available inventory of Las Vegas homes for sale and foreclosed (bank owned) inventory per month. As you can see the inventory for the homes that are priced less than $250,000 is less than 4 month and foreclosure inventory is less than 1.3 month.

Las Vegas, North Las Vegas, Henderson and Clark County homes sold January, 1st 2010-February 28th, 2010

Current inventory of Las Vegas, North Las Vegas and Henderson homes for sale

 Inventory of Las Vegas, North Las Vegas, Henderson and Clark County homes for sale and foreclosed homes for sale per month

As you can see, one can’t discuss Las Vegas homes market without paying attention to the price range or type of home.  Additionally now perspective Las Vegas home buyers can understand that the lower the price, the harder it is to get an offer accepted. For example for the price range of $50,000-$100,000 which is attractive to Las Vegas real estate investors, there is about 2 month worth of inventory; however, the foreclosure inventory is about 15 days. This is the reason that these bank owned homes get multiple offers and buying them through Las Vegas MLS will requires multiple offers.

On the other hand for the price range of $1,000,000-$2,000,000 there is 41 month worth of inventory and 8 month worth foreclosure inventory. Buying one of these homes is not difficult and one can lowball the initial offer and hope to get the home.

In conclusion, I hope that you understand that Las Vegas is not awash in foreclosures and about one month worth of bank owned homes in Las Vegas do not exert significant downward pressure on the pricing. Additionally in some cases, bank owned homes are priced higher than regular sales, thus, flat pricing this year.

The amounts of Mortgage Backed Securities the Fed is purchasing are slowly dwindling and should   end by March 31st, and they are clearly trying to ration out the remaining portion.

Last week, the Fed bought $11 Billion in Mortgage Backed Securities, which leaves them with $66 Billion to spend out of their original $1.25 Trillion allotment.

 As you can see 95% of the $1,250,000,000,000 (zeros eventually add up) has already been spent. This means that The Fed purchased the mortgage for about 3 out of every 4 home loans during the past year. When such a large buyer leaves the market, it is very likely that prices will worsen.

It is all about risk management and the banks which sold these mortgages had virtually no risk since they bundled their loans and sold it to the Fed. Banks made free money, however now they have to sell their mortgages to investors or keep it and the banks are not in the business of keeping mortgages themselves any longer. You want proof, one of our clients who had about a large sum of money in an IRA account and flawless credit who wanted to get a mortgage on his purchase precisely because of inflation could not get a loan to buy a condo in Las Vegas because his loan could not be sold to the Fed. He eventually got the loan when he threatened to sue the bank where he had his IRA money for denying his loan.

Given that the Fed has less money to last through the remaining months of the program, their ability to keep home loan rates low via their purchasing power, will wane.

 Those who can take advantage of currently low home loan rates should not wait, since the clock on these historically low rates is ticking.

Those who need to finance their Las Vegas home or condominium purchase while foolishly waiting for the bottom, are missing the freight train of high interest rate which will negate any further price decline.

I would love it if you let me know who you are by adding my Las Vegas real estate page on Face Book or Masoud’s My Space Page as a friend.

Las Vegas Real Estate Market Report 2009-2010, regular sales, short sales and foreclosure sales Part Two

The total number of residential real estate properties which have sold through the Las Vegas MLS in Clark County was 46,879 in 2009. and despite all of the false warnings about the tsunami of foreclosure real estate (both commercial and residential and vacant land) the total number of foreclosed properties that were foreclosed and went back to the bank was 30,788 in 2009, while the total number of foreclosures homes, townhomes and condominiums sold through the Las Vegas MLS was 31,445. Over 4000 properties were sold to a third party in a  Las Vegas foreclosure auction.

I have also repeatedly written that price stability for residential real estate in the Greater Las Vegas Valley is directly proportional to the number foreclosed residences that go back to the bank and end up in the Las Vegas MLS, minus the number of foreclosed residential real estate sold through Las Vegas MLS. This number is (-645) and you see the effect of this negative number on our current inventory of homes, town homes and condominiums in the Las Vegas MLS. And as for pricing, we have not seen any price drops for similar properties (COMPS), this is due to lack of excess foreclosure inventory that put downward pressure on the pricing for the market. I don’t care what the meaningless median sales numbers are.

Future residential real estate pricing in 2010 is not only dependent on the number of future foreclosures, it is dependent on the US Governments policy. Currently, the Federal Government is buying mortgages from the banks, this has kept interest rates down, and the tax credit has had a positive effect on our real estate market. Any predictions of future pricing have to take these factors into account and changes in these policies would negate any predictions.

I do not have a crystal ball. If I had, I would win a few million dollars and do a really nice good bye blog for you. However, I have explained how I analyze the Las Vegas real estate market and these numbers tell me the pricing will be flat in the current year, at least no significant price declines in the horizon.

We probably have about 50,000-75,000 which will be foreclosed in the future, however don’t look for more than 25,000 foreclosures to hit Las Vegas MLS per year, and as I have shown in this series of blogs, 25,000 foreclosures per year will not force large price drops. All I see this year is flat pricing and in 3-5 years the number of foreclosed properties in Las Vegas should become nominal and no longer affect the Las Vegas real estate market.

I would love it if you let me know who you are by adding my Masoud’s Face Book or Masoud’s My Space Page as a friend.

The following guest article was contributed by Richard Hemby who frequently writes about online degrees and college related topics for Online College Guru, a directory of online degrees.

Recent figures from real estate analysts ZipRealty Inc. indicate that the inventory of unsold homes in Las Vegas decreased by fifty percent in January 2010 as compared to January 2009, providing evidence for what many believe is the stabilization of the housing market in Las Vegas. Home turnover has continued to be brisk despite falling prices and the nationwide housing industry crisis; Las Vegas has seen double-digit property value declines over the last few years. Because inventories of unsold homes are shrinking and Las Vegas foreclosure rates are also decreasing from their record highs, a number of economic experts including the regional firm Applied Analytics believe that the Las Vegas housing market has finally reached its bottom, and that housing prices are unlikely to fall further in the area.

One of the most desirable neighborhoods in the Las Vegas metropolitan area is the Henderson/Green Valley area. Henderson, a city in its own right, offers the convenience of close proximity to the employment and entertainment options available in Las Vegas while retaining much of its small-town charm and folksy atmosphere. Henderson residents enjoy a low property tax rate and the neighborhood features a good mix of condominiums and single-family homes. The Green Valley Ranch development is especially sought-after for its exceptionally low crime rate and beautiful natural scenery. Buyers should be cautioned, however, that these suburban homes are typically more expensive than homes in other areas, and thus may not build equity as quickly in today’s distressed real estate market.

The Estates at Seven Hills, located in Henderson, also provide outstanding location while preserving natural beauty and a quieter, slower-paced lifestyle than the frenetic pace of downtown Las Vegas. The championship Rio Secco Golf Course is one of the prime attractions in this collection of upscale, gated communities. Plentiful green space and planned parks provide recreational opportunities throughout the area. Prices range from around $200,000 to over $2 million for luxury homes in this desirable area.

New home construction continues in Summerlin, an upscale housing development comprising a number of individual villages and located in the western portion of the Las Vegas area. This master-planned community is designed to offer residents a serene and active lifestyle in picturesque natural surroundings; the community is framed by soaring mountains and offers easy access to the local hiking and walking trail system that leads directly to the Red Rock Canyon area. Because each village is designed to provide a somewhat different lifestyle experience, prices for these homes range from about $180,000 in some areas to over $2.5 million for luxury estates in the Boulder Ridge development.

These homes represent a sensible real estate investment in most cases, due to their continuing desirability. Most analysts believe that the worst of the housing downturn has already passed in Las Vegas, so now is the time to buy, before housing prices begin their inevitable upturn once again.

I would love it if you let me know who you are by adding my Masoud’s Face Book or Masoud’s My Space Page as a friend.

Related Web-site pages: Investing in Las Vegas, Henderson and North Las Vegas real estate.

I am only discussing the real estate market in the Greater Las Vegas Valley and not all of Clark County which most of the MLS numbers are based on and will only discuss deals that involved the Las Vegas MLS and not for sale by owner or auction numbers.

I am reproducing the table below so we can analyze it a bit further.

Greater Las Vegas (Las Vegas, Henderson, North Las Vegas, Boulder City and Unincorporated Clark County Homes, condominiums and Townhomes sold in 2009 by price range and type

As you can see the bulk of residential real estate deals in Las Vegas have been for properties that have sold for less than $200,000 (79.5%) and homes, condos and townhomes which sold for $100,000-$200,000 (43.5%) dominate other price ranges.

Las Vegas, Henderson and North Las Vegas short sales transactions 2009-2010

1932 reo, 4851 short sale and 3793 regular sales residences are currently listed in Las Vegas MLS. Throughout the year, the number of short sale homes, condos and townhomes in Las Vegas fluctuates around 2-4 times the number of the REOS or bank owned homes. The percentage of short sale transactions to foreclosures is almost 16% or 1/6. If one multiplies the two numbers, 1/6×1/2=1/12 or 8.5% is the chance of making an offer and successfully closing on a short sale deal as compared to a foreclosure. This is precisely why we don’t usually show short sales unless they are approved (the bank has already accepted a price to sell the property).

The reason for short sales not closing escrow is that it may take more than 6 months to get a short sale approved and most buyers are not willing to wait so long to get an uncertain answer from the bank. The second reason is that the short sale process starts with an offer and some Las Vegas Realtors put an unreasonably low price on their listings in order to procure an offer to get the negotiations started and lastly doing a short sale transaction is a specialized field which requires a special type of Realtor to see the deal through.

We have referred two listings to a competent short sale agent who is the best at listing Las Vegas short sale homes and condos. One closed after 7 months and she is still working on the other deal and she has been working on it for about 10 months.

The other reason that we don’t do short sales is that I know an agent who is far better at it than we would ever be and we refer short sell home sellers to her, as it is in the best interest of our customers to get their deals done by the best.

The other point is that the percentage of closed short sales in Las Vegas goes up when the prices increase. The percentage of Las Vegas short sales homes and condos which sold for $1,000-$50,000 is 5.75% and for homes and condos and townhomes that sold for $500,000-$750,000 increases to 14.78%.

Las Vegas Foreclosure homes, condominiums and townhomes transactions and Regular sales

 The percentage of foreclosed properties goes down as properties become more expensive. Only 218 bank-owned homes, condos and townhomes have sold for more than $500,000 in 2009, while the number of short sales that sold is 100 and regular sales have been 466. The reason is that those who have previously purchased these homes can’t prove hardship which is a requirement for doing a short sale or foreclosures will seriously affect an owner’s credit.

I believe that the table above is self explanatory and those who plan to buy a home, condominium or townhome should take a look at these numbers in order to gain an understanding about what type of home is available in their price range and their chances of getting an offer accepted.

I will discuss Greater Las Vegas real estate market conditions by type next.

I would love it if you let me know who you are by adding my Masoud’s Face Book or Masoud’s My Space Page as a friend.

Las Vegas MLS shows 46,879 residences have sold in Clark County in 2009. However, I will only discuss homes, condominiums and townhomes which were sold in the Greater Las Vegas Valley, which includes Las Vegas, Henderson, North Las Vegas, Boulder City and Unincorporated Clark County, which were sold through the Las Vegas MLS. That is, a Las Vegas Realtor was involved in the deal. I have excluded properties which were sold through various auctions or for sale by owner, since the sales through the Las Vegas MLS is the engine that drives the residential real estate market in Las Vegas.

Greater Las Vegas homes, condominiums and townhomes sold in 2009

44,868 homes, condominiums and townhomes sold through the MLS in 2009 in the Greater Las Vegas Valley, of these 32,159 or 71% residences were foreclosures or REOS (real estate owned or bank owned), 5,253 or 12% were short sales and 7,456 or 17% were regular sales.

Clark County home sales numbers are the second highest in history, 18,555 sold in 2007 and 28,618 sold in 2008.

Realtors sold 3,472 single-family homes in Las Vegas in December, a 36.9 percent increase from December 2008, the GLVAR reported. So far Jan-2010 sales numbers are 1648, 949 REO, 350 Short Sales, and 349 regular sales so far. Keep in mind that December-2009 sale numbers were homes that went into escrow in October and November, 2009.

Greater Las Vegas (Las Vegas, Henderson, North Las Vegas, Boulder City and Unincorporated Clark County Homes, condominiums and Townhomes sold in 2009 by price range and type

Now, we have not seen any price drops for Comps in the last 6 months and there have been about 2680 foreclosed homes, condo and town homes per month sold in the Greater Las Vegas per month. Our current inventory of foreclosed homes is 2,000, which means that we have less than a one month inventory of foreclosed homes at this time.

 I have also set up a Face Book page for the Las Vegas homes, condos, land and commercial real estate and also a Masoud’s My Space. Although these pages are a work in progress, please feel free to add me as a friend.

More on Las Vegas real estate market in the next blog.

 Buying a home that is within your means is not easy. You need to shop around a lot, compare mortgage rates, loan options and choose the loan that is right for you. You need to compare the loan terms, interest rates, APRs and other fees before coming up with a decision. While you’re on your way to buy your dream home, some mortgage-related questions might arise in your mind. These questions are commonly known as frequently asked questions (FAQs) and homebuyers often make these queries to the lenders or mortgage brokers. Some of these FAQs and their answers are given below:

What is Truth in Lending Disclosure and why should I get it?        

The Truth in Lending Disclosure is planned to offer you all the details on your loan so that you can compare these costs with similar loan programs offered by other lenders.

 What is the APR (Annual Percentage Rate)?

 The APR (Annual Percentage Rate) is the cost of borrowing credit and it is expressed as a yearly percentage. Since you might be paying discount points and other prepaid finance costs during closing, the disclosed APR is usually higher than the nominal rate or interest rate on your loan. The Annual Percentage Rate on a particular loan can be compared with the APR of other similar loan programs and it works as a tool to compare loan options.  

 Why does the APR differ from the interest rate?

 The APR doesn’t only include the interest rate but other costs like prepaid interest, mortgage insurance as well as other fees. As a result, the Annual Percentage Rate is always higher than your interest rate.

 What is the amount financed?

 The amount of credit offered to you less the prepaid finance charges is the amount financed. Prepaid finance charges incorporate items paid during or prior to closing like discount or commitment fees (points), loan origination fees, preliminary mortgage insurance premium and adjusted interest. The amount financed would always be less than the amount that you requested for since it signifies a net amount. If you requested for $60,000 and the prepaid finance charges amount to $3,000, the amount financed would be $57,000.

 Does this suggest I would get a smaller loan than I requested for?    

 No. If your loan is sanctioned in the amount applied for, you get credit for buying your home or refinancing for the total amount for which you asked for. In the aforesaid example, you would get a $60,000 loan and not $57,000. 

What is the finance charge?

 It is the cost of credit and expressed as a dollar value. It is the overall amount of interest worked out at the interest rate throughout the loan term together with prepaid finance charges and the overall amount of mortgage insurance needed for the loan term. 

 What is the total of payments?

 This number stands for the total you’d have paid if you make the necessary minimum payments for the whole repayment term. This includes interest, principal and mortgage insurance premiums but doesn’t incorporate property insurance premiums or real estate taxes.

 My Truth in Lending Disclosure stipulates that if I make a premature repayment of the loan, I wouldn’t be allowed to get a reimbursement of a portion of the finance charge. What does this signify?

 This implies that you would be asked to pay interest charge for the time period for which you utilized the money offered to you. Your prepaid finance charges are not usually reimbursable nor is any interest that you have already paid.

 What is filing fee?

 This fee is a ballpark figure of the cost of registering your legal documents like deed of trust, mortgage deed and other documents related to your transaction. The fee would be charged at the time of closing.

  I have also set up a Face Book page for the Las Vegas homes, condos, land and commercial real estate and also a My Space page for Masoud Saberzadeh. Although these pages are a work in progress, please feel free to add me as a friend.

Aerial View of the parcel which is located about 1200 feet from Shelburne Ave and Rainbow Blvd in S.W. Las Vegas

This parcel is less than 1200 feet from the Rainbow Boulevard in Pinnacle Peaks which is within the Coronado Ranch and is within the walking distance of Nevada Trails and easy drive to hospitals, shopping centers and less than 2 miles from high way 215 and Rainbow Boulevard interchange.

American West Homes is building and selling homes on the adjacent parcel in the Kings Bridge sub division. These homes are built on 3K-4K lots and selling for $219k-$295K as starting price.

Foreclosed homes which are larger than 2300 square foot are selling for $225,000-$295,000 in Las Vegas MLS. Although there are a few subdivided parcels around my listing which have not built yet, Kings Bridge is selling 1-2 homes per week and due to increasing activity in new homes sector, these parcels could be built out in short order.

The net acreage for this S. W. Las Vegas land is about 4.05 acres, this means 32 homes could be built on this parcel which brings the price per door to about $46,000 as you can see there is a lot of room to make a god profit on the homes which will be built on this parcel.

This parcel is located at Sonata within Pinnacle Peaks in S. W. Las Vegas within walking distance of Nevada Trails, easy 10 minute drive from the world famous Las Vegas Boulevard (Strip)

Foreclosures have taken a big toll on the vacant land prices in Las Vegas. I tell those land owners who call me to list their parcel that asking price for their parcel have to realistic and reflect the price reduction due to foreclosures. Many of these land owners decide not to sell their parcel now and wait a few years for a price increase and I don’t blame them a bit, however the owners of this parcel agreed to the realistic pricing that I suggested to them or I would not be listing this parcel.

I truly believe in cooperating with other Las Vegas real estate agents and have cut my own commission in order to provide cooperating agents with a generous 3.25% commission while most like properties only offer 1.5%-2.5% commission to selling agents.

People usually don’t believe in something unless it is reported in some sort of news outlet and the latest land news in Las Vegas is that residential vacant land like this with zoning like RS (8 units per acre are getting a lot of action.

The following is from RJ.

“Las Vegas Real Estate: Homebuilders hunt for land. Las Vegas one of areas with falling prices. Las Vegas Review-Journal 11/07/09. But now Las Vegas homebuilders are on the hunt again, vying for choice parcels even in foreclosure-riddled markets such as Las Vegas, Southern California and Orlando, Fla., where prices are cheap and there are early signs of a recovery. It was primarily investors buying lots in Las Vegas for the past two to three years. Since August, major builders such as KB Home, Richmond American and Harmony have jumped back in the game.”

This parcel of land can make someone a lot of money, so, Please call me at 702-478-7800 for more details. Masoud

“Two reports showed that more than half of home mortgages are underwater, meaning the owner owes more than the property is worth, according to two reports.”

“Zillow.com reported that 81.8 percent of Las Vegas home borrowers are underwater”

These lines scare the heck out of prospective buyers and make those who were SMART ENOUGH to buy feel bad. So I have decided to go back a few months and see how these predictions and fear mongering worked out by now.

Below are a few headlines from March and May 2009

“REAL ESTATE: Loan delinquencies soar for Nevadans, Nevadans behind on mortgage payments push state to top of national list

About one in eight Nevadans is now behind on their residential mortgage, new data from the Mortgage Bankers Association show. It’s probably an indication that more foreclosures are on the way for Nevada, which ranks first nationally in mortgage delinquencies and first in foreclosures started in the first quarter.

RealtyTrac showed Nevada foreclosure activity was down 18 percent in April from the previous month, but increased 111 percent from a year ago.” Las Vegas Review Journal May 29, 09

“The first-quarter total of 13,642 is on pace to shatter last year’s record 31,416 foreclosures for 2008 in Clark County, Sacramento, Calif.-based Foreclosures.com reported.” LVRJ April 17^th, 2009

What would a reader expect to happen by now, a big increase in the number of homes that are foreclosed and put on the market by the lender? Well this is not what happened in reality.

Actually the number of properties that have been foreclosed by the lender in Las Vegas Valley which went to the bank is lower in 2009 than 2008.

2008 Foreclosed properties that went to the lender 31,146

2009 Foreclosed properties that went to the lender by Dec-7^th 28,189

The most important factor in Las Vegas residential real estate market,

I will repeat one more time. The most important factor in Las Vegas residential real estate market is:

The number of properties that are foreclosed by the bank that go back to the bank versus the number bank owned properties which are sold through Las Vegas MLS every month.

If the number of monthly foreclosures is greater than the number of bank owned properties sold through MLS then prices will go down. If they are nearly equal, we have stable pricing and if more sell on MLS than are foreclosed then we will have rising prices.

No more, no less.

Now let’s look at these numbers for the last month and last three months.

As you can see, 8165 Residential properties have sold through Las Vegas MLS while 6417 have been foreclosed and went back to the bank.

It is easy to scare people to gain publicity or sell newspapers, however if one looks back six or nine months, it is easy to see that a 110% increase in number of foreclosures not only did not materialize, it actually went down. However, the biggest asset a stupid analyst or a site like forclosure.com has is a short memory.

In conclusion, I have been doing a bit of fear mongering myself about the impending tsunami of commercial real estate foreclosures which should have been well underway by now, it is not materializing either, but more on this later.

Related web site links: Las Vegas homes, condos, land and commercial real estate, Las Vegas homes for sale, Las Vegas condominiums for sale, Las Vegas residential real estate news

Now real estate news articles only discuss the median price and I keep writing that median price does not provide any useful information about the market. Below is why.

Median is a mathematical term that indicates that one half of a set of numbers is higher and one half lower. For example if 101 homes sell in a given area and we order the price in ascending order, then the price of the 50^th home would be the median price since 50 homes are priced higher and 50 homes priced lower.

Average price is different and is calculated by totaling the sales prices of all houses sold in an area and dividing that number by the number of homes. To explain this a bit better, let’s say that we have sold 11 homes that are priced at:

$10,000, $30,000, $30,000, $40,000, $45,000, $70,000, $75,000, $76,000, $90,000, $100,000, $100,000

The median price for these homes would be $70,000 since five homes have sold for more and five homes have sold for less.

Now imagine that the prices above have increased by $5,000 for each home. However instead of selling a $70,000 property we sold one for $55,000. The new sale prices are:

$15,000, 35,000, 35,000, 45,000, 45,000, 55,000, 80,000, 81,000, 85,000, 95,000,105,000, $105,000

Even though we have increased prices by $5,000, the median price has decreased by $15,000. Now this is an extreme example due to the small sampling of numbers but it proves how useless median numbers are when discussing real estate market or direction.

Related web site pages: Las Vegas real estate for sale, Las Vega real estate market report

I have always written that attending a Las Vegas real estate auction and buying from one requires expertise that most real estate professionals in Las Vegas lack, let alone amateurs. Some silly buyers call me and want me to give them pointers on how to buy a from a real estate auction so they can do this on their own. I am in business to make a living, my job is not to teach silly people to do something that takes years of experience in both buying from auctions and doing real estate transactions.

I have repeatedly written that one needs to find targets to shoot at and before a buyer even thinks to buy from a real estate auction, he/she should find target properties through the Las Vegas MLS, find out exactly what the comparable properties sell for and only then start to wait for a comparable property to hit the auction.  Keeping in mind what I have written about buying from a Las Vegas real estate auction, then one can attempt to buy from the auction. If a buyer does everything right, that doesn’t guarantee success in a real estate auction. Click on the link below for the story of experienced real estate investors who hired a Las Vegas Realtor to help them, researched about 50 homes, were the highest bidder on one property and ended up with nothing since their bid did not satisfy the reserve price by the bank.

Investors Picking Up Cheap Las Vegas Real Estate

The deal is doing everything right in a Las Vegas real estate auction doesn’t guaranty success, but not doing everything correctly only guaranties failure.

As for the real estate market here, the mad rush to buy a home for the $8,000 tax credit has subsided and the market has cooled down some. We have even low balled the banks for a couple of homes for sale for $340,000 in Seven Hills in Henderson and it worked, we are getting a lot of offers in all price ranges accepted and I am happy about this. We tried very hard to protect our customers from making unreasonable offers and succeeded, all our offers have appraised so far. I have repeatedly written that the best time to buy real estate in Las Vegas will be mid November to January 1^st. Here is why:

1: The rush on homes or condos that will satisfy the new tax credit extension will intensify as we get closer to the June deadline and by that time we will have more than 9 months of stable pricing which will bring more conservative investors to the market.

2: A big part of getting a good deal is timing and I am not talking about timing the bottom of the market, I am taking about buying when others are busy planning for Thanksgiving and Christmas, November and December are traditionally slow times in real estate.

As for me, last month was one to forget and I am recovering from severe back and neck problems. I am starting to feel better now and hopefully will blog more frequently.

I repeat again, now is the time to buy real estate in Las Vegas.

I told our California ladies that they should pay particular attention to the price per square foot while looking at the homes that we showed them in Henderson, Green Valley and Seven Hills since this is the only way to compare between several different homes with varying square footage, lot size and locations.

The largest home was a 4100 square foot, 2005, highly upgraded two story home in South East Las Vegas around Boulder Highway that was selling for about $77 per square foot and the smallest was a 2547 square foot, 1998 built home at $110 per square foot in Seven Hills. I have used these two properties to show that when one gets away from the green and mature areas like Anthem Country Club or Seven Hills and goes inside the town, the homes get newer, more upgraded and larger.

We showed these ladies all kind of homes with different levels of upgrades and floor plans and one chose a home in Seven Hills that we made an offer on; we are still looking for the other lady.

Investors have to understand that newer homes in choice locations are hard to come by and homes that are built after 2003 on should be considered as newer homes as we have not had a lot of new home construction in Las Vegas or Henderson. Actually this month was one of the best months and the new home builders in Greater Las Vegas have sold only 400 homes.

One last note; these ladies wanted to go much higher in price and I talked them out of it. The reason was that my buyers can buy really nice homes for less than $400,000 anywhere in Las Vegas. These homes used to sell for twice as much only 2-4 years ago. The other issue is that a buyer makes or loses money when she/he buys a home and not when they want to sell it.

One should think about how many high paying jobs will be added in Las Vegas or Henderson in order to produce future buyers for an expensive home and there will be many. Additionally the more expensive a home, the harder it is to rent, the less the cash flow and longer time on the market.

NOBLE PEACE PRIZE FOR THE GREAT MAHATMA GANDHI

While we can write an offer for a regular sale any way that we want, this doesn’t work while making an offer on an REO home or condominium in Las Vegas.

1: The home or condo that you buy as a regular sale does not have to be sold to you AS IS. Unless the buyer waives his right to the property disclosures, the buyer can and should ask for disclosures and a CLUE report  The CLUE report is like Car Fax and will show the history of any insurance claims for the home or condo.

Foreclosure sales are (as is-where is) and for good reasons, the lender who has foreclosed on a home has not lived in the property and doesn’t know the history of the property. The bank will sell the property as is but this doesn’t mean that the buyer has to buy the home or condo as is and has the right to and should inspect the property by a licensed Nevada inspector. What happens now depends on who the buyer is.

A: Owner occupied homes or homes that have to be financed. In this case the lender may fix appraisal contingent repairs. For example a home that is purchased by a buyer who is financing through a VA loan has to meet certain requirements by the lender such as having an oven, if the home doesn’t have an oven, the lender has to put one in as an appraisal contingency.

B: Cash investors: the bank will often refuse to do any repairs on the home or condo. They also will refuse to contribute anything to the closing costs.

2: Appliances or personal property: these can be sold in a regular sale through a bill of sale however the bank doesn’t do this. Any appliances that are in the home or condo at the time of the offer may or may not be there at the time of closing. There is no bill of sale; however I have not had a deal that the appliances went missing before close of escrow yet.

3: Writing the offer; we can write an offer on a regular sale any which way we want, not bank foreclosures.

Banks look at two factors when reviewing offers written for bank owned homes or condos, one is the price and the other one is the terms. Offers should be as simple as possible with the easiest possible terms. The initial offer on the bank owned home will be replaced by a bank addendum that negates the initial offer and replaces it with the bank contract and is often take it or leave it. This is the reason that banks call it an addendum and not a counter offer.

The above was so Las Vegas real estate investors would adjust their expectation when buying a Las Vegas bank owned home or condo and not to scare them. We make offers on foreclosures all the time and close the deals while protecting our clients. Foreclosure deals in Las Vegas may be a bit harder to close than regular sales, but they are often more than worth the trouble due to the big savings that they offer the investors.

1: What is the total amount of money that an investor would like to invest in Las Vegas homes or condos?

2: Is the investor going to pay cash or finance the property?

3: What does the investor expect from his/her investment?

1: What is the total amount of money that an investor would like to invest in Las Vegas homes or condos?

The reason is that those who have enough money for several properties have to know how they want to invest the money. For example an investor who wants to invest $500,000 in Las Vegas real estate can buy one $500,000 home or condo, two homes or condos for $250,000 each or 4 homes or condominiums at $125,000 each, etc.

Needless to say, the cheaper the price for a home or condo, the fiercer the competition and an investor who makes an offer on a home with 25 offers on it will not get a bargain. The two most important factors that a real estate investor has to pay attention to is vacancy and repair costs. Older homes or condominiums have a bigger probability of future breakdowns and longer vacancy rates than newer homes.

 Some investors are still wetting their toes but are trying to time the bottom of the bottom of the Las Vegas real estate market. I spend a great deal of time tracking the real estate market and even I don’t claim that I know when we will reach the bottom for Las Vegas real estate. We will know that the real estate bottomed out at least 3-4 months after the fact. Additionally the Las Vegas real estate market is too general to discuss. Even Las Vegas home or condo market is too general.

Las Vegas homes or condo market should be analyzed block by block and based on square footage, price VS rental income and days on the market before a home or condo is leased. For example, in many areas in Las Vegas homes that are bigger than for example 3000 are not leasing quickly and 1400 square foot homes do much better.

The rental income for a $500,000 home may be $25,000 a year while someone who buys 4 homes at $125,000 each may earn $35,000 for the same amount of investment.

2: Is the investor going to pay cash or finance the property?

This makes a big difference in what the investor can purchase. For example other than a few exceptions, those investors who want to finance their purchase cannot buy a hotel condo like the Signature at MGM Grand or most condo communities in Las Vegas.

Foreign investors will have a hard time financing their deal in the United States to my knowledge; however I am not in the mortgage business. Foreign investors should research financing themselves. I have had investors from Canada who used a line of credit or a home equity loan in order to buy for cash in Las Vegas. It is best for a foreign investor to obtain financing in their own country and buy for cash in Las Vegas.

3: What does the investor expect from his/her investment?

Is it cash flow, a shot at future appreciation or both? Properties with better cash flow could appreciate less in the future and nicer properties with a shot a future appreciation do not offer great cash flows. Bear in mind that no one can guaranty future appreciation; however one can take an educated guess.

3: What is investor’s timeline to buy?

Timing is important in making a real estate investment; the rule is to buy when others aren’t and that can’t be generalized. Homes that are priced below $250,000 and are priced right are getting multiple offers at this time and I have advised my investors to be patient until the rush on the properties calms down a bit. If the investor wants to buy a one bedroom condo at MGM Grand or Meridian, try to do it now.

It also affects how often we would contact the investor. If the investor wants to buy in three months, we will not contact them often until they are ready to buy. Instead we will try to educate them by e-mailing them different products in different locations in order for the customer to get an idea about pricing versus location. When the customer is ready to buy, we will interact with them more frequently.

I hope that I gave an explanation about why we ask the questions that we do and why correct answers will help both of us in the search for a great real estate investment that will make the investor happy.

“GATESVILLE – REJECTION NOTIFICATION

This is to inform you that the seller decided to accept another offer on this property. This property received more than 45+ offers.

Thank you again for your offer and patience.

Sincerely, T.C./Executive Asst.”

I don’t see how this can continue as last time that we had a rush on Vegas properties (2003-2006), it obviously did not last. How can a buyer get a good deal on a Las Vegas condo or house when 45 plus buyers are competing with him/her?

Furthermore, banks are not crazy enough to wholesale what they can retail and sell in a couple of days. 45 offers on homes will result in double digit appreciation that I wrote about in the last blog. The question is, is this going to continue? I certainly hope not and 20 plus offers on a home or condo is temporary, but even 3-4 offers on homes or condos in Las Vegas  will result in appreciation, but not double digit.

This is not good for Masoud, as I am sick of abnormal conditions in Las Vegas real estate. I don’t even know what normal is anymore, but one thing is for sure, this isn’t 20^th century real estate and the methods that worked 3-4 years ago are short cuts to failure. Welcome to 21^st century real estate.

At times, people do things without thinking it through, like paying $15,000-$20,000 too much to gain an $8,000 tax credit, which may or may not be extended after December 1^st. Well I highly doubt that the US Congress will make any announcement about this until late November as they want people to buy as many homes as they can by then.

Related web site pages:  Best way to buy a home or condo in Las Vegas, buy Las Vegas house for sale, buy Las Vegas condo for sale, Las Vegas real estate

Masoud and Karen Saberzadeh

Realty One Group, Las Vegas, Lasvegasaber@yahoo.com, 702-478-7800

Investing in Signature at MGM Grand Residence condos, renting condominiums at Signature at MGM Grand Las Vegas, part two

The Signature at MGM Grand Las Vegas condos are listed in Las Vegas MLS in three ways.

1: Regular sales at MGM Grand Signature residence in Las Vegas:

The condo hotel (condotel) owner is represented by a Las Vegas REALTOR. The asking price for these Las Vegas luxury condos is often far more than short sales and bank owned condos.

I have gone over the pricing for the junior suite (520 square foot condo) and one bed room condominiums. I also stated that no condo has sold through Las Vegas MLS for more than $300,000. Asking prices for the regular sales for the 520 square foot condos are $170,000-$824,000. Obviously the listings that are priced for $800,000 have little chance of selling as Las Vegas MLS shows only 2 regular sales in the last 3 months. Those owners who have sold their condo this way have lost hundreds of thousands of dollars.

MGM Grand pool view from a 33rd floor one bedroom condo at Tower One

2: Short sales at the Signature at MGM Grand Las Vegas

520 square condominiums or junior suites:

There are 57 studio condos that are listed as short sales, 44 condos are under contract as contingent sales, zero pending sales (all contingencies have been removed and the deal should close, if not, the buyer loses earnest money deposit) and 6 short sales have closed in the last 3 months for $160,000-$200,000.

One bedroom 847 square foot condos at Signature at MGM Grand Residence as short sales:

There are 23 one bedroom condos listed for sale, 7 contingent sales and zero pending sales. Two short sale condos have closed escrow in the last three months for $275,000-$300,000.

 You can see that despite the high number of short sales listings the percentage of offers that close escrow is low. These are the same condos that usually get foreclosed upon. Signature at MGM Grand condo’s original buyers have a hard time getting short sales approved because they were rich and can’t prove hardship which is a requirement to do short sales.

The Signature at MGM Grand condominium on 33rd floor view Of McCarran Airport

3: Foreclosed condos at the Signature at MGM Grand Las Vegas:

520 square condominiums: There are 8 condos that are listed for sale in the Las Vegas MLS. Seven are contingent sales and 8 are pending sales. Despite the low number of available listings compared with regular sales, these are condos that close escrow, as 29 sales have been recorded in the last three months.

847 square foot one bedroom condominiums: There are only three, one bedroom condos listed in the Las Vegas MLS currently. No contingent sales right now and three condos are pending sale. 21 one bedroom condos have sold in the last three months.

Foreclosed condos at the MGM Grand sell quickly and the days on the market (DOM) for the vast majority of these bank owned condos is less than a month.

18 out of 21 one bedroom condos have sold for more than $240,000. Higher floor condos bring more money than lower floor condos. There is a premium paid for condominiums with Strip view and those which have a balcony.

Conclusion: Don’t be fooled by low asking prices for the short sale condominiums at Signature at MGM Grand, many of these don’t close escrow and become foreclosures and if they close, it will be for more money than foreclosures.

Related web site pages: Las Vegas luxury Condominium and High Rise Condo for Sale, Buy Las High Rise Condo Hotel, Invest in Las Vegas Real Estate

Masoud and Karen Saberzadeh

Realty One Group, Las Vegas

Lasvegasaber@yahoo.com, (702) 478-7800

In order to analyze investing in Signature at MGM Grand Condos, I made several assumptions that are not backed by any data, such as average rental days at MGM Grand. Although I have tried to get all the info that I could, until I finish a transaction at MGM Grand condos, I am sure that there are fees that I have not included in my article and issues that I have not discussed. But this analysis should give the investor some idea about investing at MGM Grand Signature condos.

This blog post is a stripped down version of my analysis for investing in MGM Grand condos, the full article with the numbers will be e-mailed to my investors today.

Investing in Signature at MGM Grand Condos as a value investment:

What an investor will buy at Signature at MGM Grand Residence Condo Towers is a world class, fully furnished condo hotel that is built right behind MGM Grand Casino. The land that these condominiums are built upon could sell for 20 million dollar plus per acre. The owner has access to all MGM Grand amenities such as their awesome pool in addition to the pools that belong to the tower and 10% discount from MGM Grand Spa and various restaurants. The owner has easy access to the Strip through the monorail.

One thing that separates Las Vegas high rise condominiums from most other areas is that condominiums such as MGM Grand were built to sell and originally sold for $800-$900 plus per square foot and the investor benefits from others miscalculation and misfortune.

It is my opinion and my opinion only that junior studios and one bedroom condos are excellent values for their current prices, regardless of cash flow. Where else can you find a condo such a MGM Grand Residence Tower to buy fully furnished for $120,000-$300,000? Only Las Vegas baby (say it like Elvis the King would, thank you very much)

This blog is credible because I do not advertise for the seller, but if I like a product, I will not be shy to say so and at this moment I like MGM Grand condos because I believe they provide the investor with both a great value and a chance to make real cash flow. The investor should do his/her own due diligence and not rely on my blog post only.

Renting hotel condo units at Signature at MGM Grand, cash flow:

The Las Vegas real estate investor who was successful at buying a Signature at MGM Grand Condo Hotel can rent his/her condo in three ways.

1: Put the condominium in the MGM Grand Hotel pool. Totally easy for the investor, the investor enrolls his condo hotel (condotel) in the MGM Grand rental pool. The condo is put in queue and the first condo in line gets rented first and goes to the back of the line afterward. MGM Grand rental office could not tell me the average time that they rent one of the Signature condominiums per month due to the uncertain market.

But I will do an example just to look at some numbers. Please note that there is no proof that a condo at MGM Grand rents for this many days per month. The assumption is 15 days average rental period per month in order to run the numbers. If the condo is in the MGM Grand rental pool, MGM Grand takes 10% of the top and then takes 40% of the remainder with 60% going to the condo owner.

 520 square foot studios rent for the following prices:

Regular week days= $129+ per night, weekends for $179+ per night and special weekends and days like New Year for $499/night.

I just assume the rates as the $129 and $179 per night, and assume three weekends a month and 9 days on week days for total 15 rental days per month. The total rental for the studio condo for 15 days is $2235.

One Bedroom condos rent for the following prices:

Regular week days= $179+ per night, weekends for $219+ per night and special weekends and days like New Year for $549/night. The total rent is $2925. The investor will be left with $1580 gross income.

Assuming that a condo rents three weekends per month (weekends are busy time for MGM Grand and nine week days a month for a total of 15 days a month, the investor may expect about  $1200 gross income without taking account the special rental days. Needless to say if the vacancy is less than 15 days a month the return on the investment can be more, or less otherwise. If we deduct HOA  fees and taxes, the owner could possibly expect 0-$500 profit per month.

Drawbacks: If the owner decides to use the condo himself/herself then there is $27-$40 cleaning and maintenance fee per night to MGM Grand that cannot be waived.

2: Not enroll and rent the condo in MGM Grand rental pool and rent the unit directly and long term:

There is not a lot of data available at this time since renting the condominiums long term and by owner is a new phenomenon at MGM Grand. 10 condos have been rented long term so far through the Las Vegas MLS. Most of the one bedroom condos has been rented for $1800-$2000 per month with a 1-4 and 3-6 month lease; days on the market or DOM for these units are 7-39 days.

If an owner doesn’t enroll in the MGM Grand program and wants to rent it himself, then he has to pay an extra $200 for a studio and $250 for a one bedroom unit to MGM Grand per month. Owner has to take care of cleaning the unit and supplying towels and sheets. There are companies that do that for the owner.

 The owner could be left with about $300-$500 per month for a junior suite or studio suite and 0-500 for one bedroom condos.

3: Renting the condo short term by using internet:

This could be the most effective use of condominiums at MGM Grand. The owner uses internet to advertise their condos. Now the full power of owning a hotel condo can be harnessed. The owner could make 15%-25%+ cash on cash return on his /her investment. But the info about the numbers and how to do this is for my customers only, call me or e-mail me for the info.

As for waiting for more price reductions, I can’t tell you whether the prices will go down further or not, all I can say is that I believe MGM Grand condos are where Meridian used to be about 4 months ago. If there is rush on MGM Grand condos as there was and still is on the Meridian, then there will be no price reductions and prices will go up. The action on MGM Grand condos has picked up considerably in the last three months. Like I said, whether you want to wait or not is your call, but in my opinion, MGM Grand is a great value right now.

Analysis of investing in Signature at MGM Grand condos, a Las Vegas high rise condo hotel based on value and cash flow

Signature at MGM Grand condo for sale, Las Vegas high rise condo for sale, investing in Signature at MGM Grand Las Vegas, Las Vegas luxury condo, invest in Las Vegas real estate

Related web-site pages: Investing in  Las Vegas Real Estate, Las Vegas homes, luxury condos and commercial real estate for sale

My Name is Masoud and I am a Las Vegas Realtor, my contact info in the bottom of the left side bar.

We keep making offers for our clients in Meridian and keep losing, we can’t get one in ten offers accepted and below is the reason.

In the last 60 days eleven 692 square foot condos have sold through Las Vegas MLS, although a price spread of 10-25 Thousand dollars could be justified for differences in upgrades, location, view and furnishings, the difference in price between the most expensive and the least expensive condo unit is a whopping $37,000. The most expensive unit has sold for $92,000 with the asking price of $69,000. Same goes for the 727 square foot condos; again the least expensive unit has sold for $55,000 and the most expensive sold for $76,500.

The problem is magnified for 927 square foot condominiums. The least expensive condo sold for $70,000 and the most expensive sold for more than twice that, $150,000. Asking price for this condo was $74,900. There is no reason for this. Given that an offer should be based on comparables, that is the same square foot unit that has recently sold in the same community, how does a Realtor compute the comps?

The price difference for 1035 square foot condos is about $100,000. Evidently some buyers got a great deal and some have paid way too much. The deal with Las Vegas foreclosures is that the sale process by the banks has become a silent auction.

As we are on the subject of silent auction, banks and REO agents have leaned from the public auctions like REDC auction where the starting price is artificially low to attract bidders, so they put a low asking price to attract buyer’s agent’s and other’s attention and start getting bids.

Asking prices have nothing to do with the final accepted price and in are computed based on Comps and a lot of luck as it comes to Meridian. This may or may not change since new rental Comps have been available recently. For the long term leases, 692-727 square foot condos rent for about $1000, plus, minus, $100. Now deduct HOA fees or condo fees and taxes from this and the positive cash flow for these units become very low. For example the HOA and taxes for a one bedroom condo is about $500-$600, so say the owner is left with $400 after deduction of condo (HOA) fees and taxes. Now deduct 600-900 for the leasing agent to lease the condo and 6%-8% property manager fee and a month or two of vacancy from the $4,800 that is left for the owner and then the owner ends up with very little cash flow. Now the investor could put his/her money in the bank and make the same cash flow. But the investor has a decent condominium which is 10 minutes walking distance from Caesar Palace, Bellagio, Paris and City Center and hopes to make the profit through selling the condo in the future. At any rate, if you want a condo at Meridian, be prepared to pay $100-$125 per square foot.

Meridian is not the only game in town and I am starting to like MGM Grand Signature Towers much more than Meridian, but that is for the next blog post. Up to this point I have recommended against buying high rise condos in Las Vegas, but due to sharp price drops, there are starting to be viable real estate investment options in Las Vegas as long as the investor knows what it is he/she is doing.

I will start a series of blog posts about Las Vegas high rise condos, next.

DISCLAIMER: No one can accurately predict the future of the Las Vegas real estate, all anyone can do is to make an educated guess, and I am no different.

My name is Masoud and you can call me at 702-478-7800, find other contact info in the right side bar.

 Related web-site pages: Investing in Greater Las Vegas Real Estate, Las Vegas new and mid-rise luxury condos for sale, Las homes, luxury condos and commercial properties for sale

Greater Las Vegas real estate market, an analytic look at the Las Vegas homes, condos and townhomes market part two

Las Vegas real estate market report, reasonably priced homes or condominiums in Las Vegas are hard to find, foreclosure inventory is low part 3

Las Vegas real estate market report, about my predictions for 2009, part 4

Although I have written that I don’t predict great price fluctuation for Las Vegas homes and condos that are priced below $250,000 and Las Vegas condominiums that are priced below $180,000, many assumptions have been made that can be disproven. The foremost among them is the current level of investor’s interest in buying real estate in Las Vegas. I will discuss it in detail in future blog posts, but here is a hint, inflation, and it is coming.

Other data include the number of homes, condominiums and townhomes sold versus the number of new foreclosures for the same period of time. If the number of new foreclosures is greater than the number of bank owned or REO homes, condos and townhomes, then the prices will drop. If the sold number is equal to the new foreclosures, you get stable pricing. If the number of sold properties is greater than the number of new foreclosures, then prices will go up gradually.

Below, please find the data for the number of homes, condos and townhomes that were sold through Greater Las Vegas MLS by category in the last 30 and 60 days. The total numbers of available for sale listings in Greater Las Vegas does not include contingent sales or pending sales. So let’s take a look at these numbers, they are accurate but not exact.

For the 7726 homes that have been sold in the last 60 days, 5530 listings have been added to the MLS. Sold listings in the last 30 days (3858) is more than the number of listings added to Las Vegas MLS (3620) so we have a net loss each month.

But the most important numbers are the number of foreclosure listings added to Las Vegas MLS versus the number of new properties that have been foreclosed by the banks. Even though we show a net gain of 240 new foreclosure listings, actually 209 more foreclosed residential properties sold through MLS that were foreclosed by the banks. I believe September numbers will be strong also.

What these numbers tell me is stable pricing without wild fluctuations, but we sure can use a greater selection and better variety.

Unrelated point: There has been a lot of discussion about angry people that yell and scream in town hall meetings about the health reform in United States. These are called crazy, radical, set up by far right organizations, etc. Even though I don’t agree with these people and their logic escapes me, I call them Americans that have and are exercising their constitutional right to organize (regardless of who is organizing them) and protest and don’t believe that they should be called names. Instead be thankful that we live in a country that allows its citizens to freely organize and protest, as I am.

Related web site pages: Las Vegas homes, condominiums and commercial real estate for sale

Getting the best deal for your Las Vegas home or condo, Buying Las Vegas homes for sale