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 average price after reduction was $331,589 as of Feb. 1, compared with $393,365 before the reduction, the online real estate firm showed.”

Above is from Las Vegas Review Journal Wednesday, Feb. 21, 2010

Average asking prices for homes for sale in Las Vegas is not and has not been anywhere around $393,000 and has not dropped by $61,000. I believe these may be San Francisco numbers.

I also strongly agree with a couple real estate analysts Dennis Smith and Larry Murphy that we have not seen any price drop for homes that are priced below $250,000 in the last 6 months.

Here is what Mr. Smith says in the same article:

“All I can tell you is look at price per square foot of homes that closed escrow. It’s been consistent for both new and resale for the last seven months,” Smith said. “I don’t know about San Francisco and Indianapolis. I just look at Vegas.”

Same here!

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.

I am not a believer in dates and anniversaries because the day before the New Year is going be the same as the first day of the New Year except a bunch of people have hangovers. New Year, anniversaries and like are a way for the people to manufacture a discontinuity in the time space so they can have a new beginning and new hope. Except that every second of a person’s life is a new beginning and hope.

Our breaking down problems continue and I set a new world record or so I think. I wrote that we have replaced our phones, modem, router and I had to buy a new laptop, except that the computer keeps crashing, Windows7 is not as good as advertised. My brother switched his cell phone with me as his was much better and I lost it the first time I got out of our home taking my brother to the airport. I think it dropped off my belt when I got out of the car. Losing a phone so fast should be some kind of a record and the day before that my car broke down. This breaking streak is starting to get on my nerves.

My brother Parviz left for Iran to help take care of our parents and this puts my mind at ease. Although we achieved a great deal last year, I didn’t enjoy our victories, how could I when I know my parents are suffering.

We are going to hire a couple of people to help set up the Trustee Sale Auction and I am going to inform you when I am ready and it should be in the next three weeks. I will write a great deal about this later. I will blog about the Las Vegas real estate market next. We have been much busier than I thought from Thanksgiving to the first of the year and that means that the market activity for homes and condos will be very heavy in the next few months.

However, we have been experiencing serious phone and internet problems all last week and it is ongoing. We have tried to fix this by getting a new modem and buying a new router. Poor Cox Cable has done their best to help us but we have not been able to totally solve our problems yet. Karen was answering e-mails at 11pm when we got internet, which we lost the next day. Anyways, please be patient and we will get to you.

I apologize again, but this problem is not due to our fault. 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 highly encourage anyone who wants to do a guest blog post about Las Vegas real estate, mortgage, construction, loan modification, short sales or any other real estate related article to contact me about publishing their blog as long as it is good and previously unpublished and I will give you full credit for the post. A link in my blog can help previously un-indexed web-sites or blogs to be indexed in Google or Yahoo.

Please find Elizabeth Johnson’s post below.

These are tough times we live in, and the collapse of the economy and the financial markets have brought a sense of doom that still hangs in the air. Even though most of us are limping to recovery among the fallen debris of closed companies and lost jobs, others are yet to recover from the blow. The construction industry has also suffered its share of damage, and from the look of things, it will be some time before things get back to the way they were.

The boom that came before the crash sent housing and construction costs soaring, and even though prices were high, people were able to get mortgages to buy their dream homes. With the subprime mortgage industry failing miserably, there are many houses in the market today, with nary a buyer in sight. The costs have fallen, but people are finding it hard to raise the money for a mortgage. Banks have tightened their lending policies, a far cry from their earlier stand of giving loans to just about anyone who asked for them. So yes, houses are cheaper now, but there are hardly any takers for them.

And when it comes to construction, the cost of building your own home has gone up, because materials and labor have become costlier. There is bound to be a sharp drop in the number of non-residential construction projects, with offices, retail facilities, hotels, hospitals, factories, warehouses and other similar projects coming down by as much as 35 percent in some cases. The worst to suffer will be industrial and manufacturing units because money will be hard to come by for renovations or expansions.

The industry will take at least two years to recover from this blow, but there is one good thing to come out of all this. Housing is now affordable for those who are not looking for premium homes and want something to fit their mid-size budget. Also, the recession has paved the way for more sensible money habits – people are now more careful with their money and what they spend it on because they have realized that it does not grow on trees and that jobs are not certain.

Those in the construction business will have to learn how to stay competitive in today’s harsh economic climate and also be prepared for a time when the boom may start again. If history has taught us anything, it is that it repeats itself, so the best we can do is be prepared for any eventuality.

By-line:

This guest article was written by Elizabeth Johnson, who regularly writes on the topic of construction management degrees . She welcomes your comments and questions at her email address: elizabeth.johnson1@rediffmail.com

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

Many of these Southern California home buyers prefer more mature and green areas like Seven Hills, Anthem Country Club, Green Valley, Summerlin or golf communities like Rhode’s Ranch, Tuscany or Summerlin Village and have the money to pay for the more expensive homes. An issue that comes up frequently with out of town buyers is that even if they have visited Las Vegas multiple times for vacation, all they see is the Strip (Las Vegas Boulevard) or downtown Las Vegas. These buyers are not familiar with pricing versus location in different areas so we take it upon ourselves to show them homes that we think match them criteria in different areas so they can see all their choices.

We looked at about 14 homes in Seven Hills, Anthem, Green Valley and Mission Hills in Henderson and I was surprised by the quality of homes that can be purchased for $250,000-$375,000 since I personally have not looked at homes for this price range in Henderson for a while. Homes that are selling for this price range had sold for about twice the asking prices 2-3 years ago.

A few notes about the homes that are available for sale in the areas that I mentioned.

1: This price range in Henderson is dominated by the short sales and then regular sales, foreclosures are hard to come by.

2: There is wide discrepancy between the sold prices or COMPS, (same model homes in the same subdivision) and the asking prices. To combat this we will look at the price per square foot for the COMPS before picking homes to show them. For example if the COMPS are $85-$100 per square foot and the asking price is at $140-$150 per square foot, then we look at the history of the home and see what happened. If the listing is a flip (bought and sold quickly for profit), then we don’t show it. One of the listings that we didn’t show was a flip that was bought at $130 per square foot and the asking price was $152 per square foot in a subdivision that the COMPS were at $90-$100.

While I am on the flipping subject, I am starting to see many flips that have gone wrong. These properties were purchased by investors that had no idea what they were doing and will be losing thousands of dollars if not tens of thousands of dollars on their blind speculation. These investors would have saved much trouble and heart ache by following the advice that I have provided in the Las Vegas homes, condos and commercial real estate web-site and this blog.

3: The action on Henderson homes that are priced at $250,000-$375,000 is not nearly as much as homes that are priced less than $200,000 and the more one goes up in the price, the less action on these homes.

More about homes in Henderson that we looked at in the next blog.

Unrelated note: I was floored when I learned that Mahatma GANDHI, one of the greatest generals of all time (as defined by Sun Tzu) and peace makers of the last century has not won a Nobel Peace prize, even though he was nominated four times. This is BULL and this organization should know better, as long as Mr. GANDHI is not given this prize, I give it no value. The Nobel Peace prize, in many instances has been given to candles, while ignoring the sun. Although the Noble Peace prize is not given posthumously, an exception should be made in this in order to correct an ERROR. So get used to this, I will have it at the end of each blog post.

NOBLE PEACE PRIZE FOR THE GREAT MAHATMA GANDHI

The White House is also signaling that it sees the tax credit program which is currently set to expire by December 1st as an important element in stimulating new jobs next year.

After an economic policy strategy meeting last week between President Obama, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, congressional aides said Democrats generally support an extension of the housing credit.

Senator Reid already has made clear that he is supportive of an extension and is co-sponsoring a Senate bill that would extend the tax credit for six months.

Congressman Charles Rangel, chairman of the House Ways and Means Committee, has sponsored the one-year extension of the tax credit for military and other government personnel serving overseas, and is favoring an extension for the entire program. Although the White House has not publicly committed to an extension, it is reported that the President is seriously examining that option.

An unexpected development that emerged following last week’s White House meeting was the possibility of expanding the tax credit to a broader group of buyers next year, such as people who sell their current homes and buy a replacement home.

Though details were scanty, Capitol Hill sources said one option on the table would be to provide a tax credit, most likely at the $8,000 level to replacement home buyers whose incomes do not exceed some limit.

The current credit phases out for single taxpayers with incomes above $75,000, and married purchasers earning $150,000.

A politically sensitive issue, the sticking point is how to manage the cost of extending the housing tax credit and how much it would add to the federal budgetary deficit.

Mark Zandi, chief economist of Moody’s estimates that widening the credit to all buyers through next August could cost the government upwards of $30 billion.

Rangel’s 12-month extension of the credit for service personnel is estimated to cost more than $30 billion, but it’s mainly being paid for through an increase in penalties levied by the IRS on taxpayers who fail to file corporate or partnership returns.

This article is an edited version of an article by Kenneth R. Harney from Washington

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.