1: Because Las Vegas housing market has over corrected and is undervalued (according to Case Shiiler) by at least 25%

2: Double digit cash on cash return is possible on one of the safest investment opportunities in today’s economy

3: Las Vegas economy has passed the bottom and is rebounding

Here is the proof;

The following graph shows the Case-Shiller Housing Price Index from January 1987 to December 2010.

Case shiller Las Vegas housing graph 2011

 The Case Shiller graph shows the median price for homes sold in Las Vegas and compares it with a ten city composite of other major cities in the United States which is shown by dotted lines.  The flat line which closely followed real pricing for Las Vegas homes up to 2002 is the median price of homes if the housing bubble and following crash did not happen.

As you can see the Las Vegas housing prices matched or were higher than the 10 city composite until 2007. Both peaked at about $225,000 in 2007. However the 10 city composite median price has fallen to about $150K which is a 36% decline from the peak values.

Las Vegas median home prices have fallen to about $100K and this represents a 56% drop from peak values. Additionally, had things progressed normally (the only thing that we ain’t got in Vegas is normal) the median prices would have been at $130K. The $30k discrepancy represents OVER CORRECTION which results in Las Vegas housing prices to be undervalued by about 30%.

Now you understand why Las Vegas real estate in general and housing in particular are such a great investment opportunity.

This is the reason that real estate investors worldwide are investing in Las Vegas housing, more than 50% of Las Vegas homes are sold to cash investors.

Conclusion: Case Shiller graph shows why Las Vegas is one of the best bets for investing in United States real estate. Since the Las Vegas housing market has over corrected it is less susceptible than the 10 city composite and cash flow is better.

I have mentioned Larry Murphy’s name as the only Las Vegas real estate analyst whom I truly respect and the following was in his last e-mail.

“If you want to look like a genius in 5 years from now, buy all the Las Vegas real estate you can buy today”.

 I couldn’t agree more, but not all real estate, or for that matter homes or condos, are the same. For example cash flow for a $300K home may not be as good as cash flow for a $125K home, however a flipper may make better margins by buying the more expensive home.

You need a Las Vegas real estate agent who can tell an investor what he/she should invest in and why and all you have to do to find one is to call Masoud at 702-478-7800.

Let me know who you are by becoming my friend on my Las Vegas real estate Face book  page or Masoud’s Las Vegas real estate tweeter page.

We have 125,000 empty homes and condos in Las Vegas, the property values will go down by 1000%, shadow investors want to unload 500,000 homes and condos in 3 years and we have zombie loans (loans in default that banks do not want to foreclose on) walking around in the day time around the Strip and nobody can see them. We got it all in Vegas, baby!

There was an article in the Las Vegas Review Journal on April 16^th that I will not give a link to which discusses the Las Vegas real estate market in the next 3-5 years. It claims that Las Vegas has about 65,000 vacant homes and assumes that if 1500 homes are absorbed per month we have a 4 year inventory.

Man it is getting so deep that I’ve got to wear fishing boots.

Silly season is on and so called Las Vegas real estate “analysts” that can’t see past the tip of their nose and have been WRONG at every turn, now are predicting what Las Vegas real estate is going to be like in 3-5 years. This is really silly because no one can predict what Global economy, which US economy and Las Vegas real estate pricing is a function of, will be like. Why global economy? Well, if gas prices stay in $3-$4 range, Las Vegas would be doing far better than if gas prices went to $7-$8 per gallon.

The other reason is that these guys assume that the Las Vegas economy will be static, meaning the same economy in 3-5 years. It may or may not be, however current numbers are showing decent gains, such as large gains in convention attendance and gaming.

Here are real numbers for you:

Total number of foreclosed (bank owned) residential properties sold through Las Vegas MLS in Greater Las Vegas since Jan, 1, 2011 = 11900

Total number of properties foreclosed by the banks and sold back to the in Greater Las Vegas since Jan, 1, 2011 = 8000

Total number of properties foreclosed by the banks and sold to the third party in Greater Las Vegas since Jan, 1, 2011 = 2385

Banks have sold 3,900 homes, condos and townhomes through the Las Vegas MLS than they have foreclosed on and purchased at the Las Vegas trustee sale auction. The mountain of foreclosures that these silly guys are predicting is failing to materialize again, for the second year in a row.

Given that these so called real estate analysts have been regurgitating the same stuff (I am being polite and didn’t use crap) in the last 3 years, don’t take what they say seriously.

I do not know what will happen in 3-5 years, or if we are at the bottom. Additionally, I am not silly enough to claim otherwise. However the best real estate deals in Las Vegas are getting multiple offers. I e-mailed 16 very good investment home listings to a Canadian investor and in 3 days 5 of the 16 were under contract.

The most important factor that governs real estate pricing in Las Vegas is zombie loans which I will discuss in the future. As for me after a very difficaut 6 month, this is the best I have felt in 15 years, Thanks for all your prayers, may the Good Lord bless you all and I love you one and all.

HAFA (Home Affordable Foreclosure Alternatives) short sale program became effective on April, 2010, and ends at the end of 2012. While HAFA was created to streamline the short sale process by setting clear timelines, documentation requirements and procedures to make short sales easie, HAFA has been a total failure since a recent report from the Congressional Oversight Panel that oversees TARP states that the Treasury has spent just $4.3 million on HAFA for 661 short sales.  How much money did TARP have, 700 Billion and they spent 4.3 million, wow!

Clearly further modifications are needed and it came at the start of 2011. You can find the changes below

• HAFA no longer requires that servicers verify the borrower’s finances. This means that sellers would probably not be required to fill out an inch or so of financial documents.
• HAFA no longer requires servicers to determine if the borrower’s monthly payment is higher than a 31 percent debt-to-income ratio. No change here as the vast majority already qualify.
• HAFA no longer requires second-lien holders to agree to accept 6 percent of the unpaid principal balance owed them, up to $6,000. Servicers now decide who gets paid how much, with a cap still at $6000. So a second lien holder that is owed $30,000 or $50,000 can get the full $6,000. This is a good thing, since some of these second mortgage holders can actually make more money by settling for $6,000 rather than selling the loan to a collection agency, excellent for the poor borrower/seller.
• HAFA now requires borrowers seeking a short sale get an answer/agreement within 30 days.

There were three road blocks to doing short sale deals in Las Vegas:

1: The seller had to prove hard ship (gone)

2: Specific Performance which means that the lender can go after the borrower for the difference between the selling price and loan amount. Now the banks are willing to forgo this but Fannie Mae and Freddie Mac don’t. Naughty Feds

3: Second mortgages: The banks sell these to collection agencies as of right now after foreclosure

The bottom line is that foreclosing on a home or condo in Las Vegas costs banks 10% more than short selling it. Any vandalism, which many Las Vegas foreclosures have been  subject to, severely adds to this cost. Banks have learned by now that letting borrowers who are in default live in their home longer than 4 months will result in a happier situation and saves money when they foreclose and it is far more politically palatable than foreclosing as soon as 4 months is over. Now if the same borrowers can short sale their home without proving financial hardship, the banks will save money and that is the reason that new rules should help to drastically cut the number of Las Vegas foreclosures in a few month.

I hope what I wrote above made sense but don’t blame me if things don’t work out that way since making sense ain’t got nothing to do with how banks do things.

Silly real estate pundits have been writing about how bad Las Vegas real estate market is in the first few months of last year. Well a whopping 41,915 single family Las Vegas homes, condos and townhomes have been sold in Las Vegas, North Las Vegas and Henderson through the Las Vegas MLS and another 5,945 properties were sold to a third party in the Las Vegas Trustee Sale Auction with additional properties which have been sold through various bank owned auctions which should put the total number close to 50,000. The supply of distressed properties in Las Vegas area is not endless and we have easily burned though the majority of these.

The total number for foreclosed properties in Las Vegas was 23,920 and 19,180 of these have sold through the Las Vegas MLS in 2010. Some of the rest have sold in bank owned auctions and some are not ready to sell yet. I have shown that home prices have been going up and down in a narrow range (10%) for the type of transaction; see Las Vegas homes market for foreclosures, short sales, auction homes. Condo prices in lower price ranges are up about 10%-15% in many cases.

We are witnessing a serious attempt by the banks to raise prices in all types of residential real estate and all price ranges!!! Time after time we see Las Vegas bank owned listings have been withdrawn from the market and re-listed at 5%-10% higher. We used to have a real estate tradition in Las Vegas pre-2008 and it was; if the property didn’t sell within three months, raise the price by 10%!!! I don’t think bank attempts can succeed in the current market but banks are playing hard ball now.

We have had a couple of complaining e-mails from the listing agents along with rejection letters for offers on $400,000-$500,000 Las Vegas bank owned luxury homes because our offers were 10% below the lowest COMPS. These listing agents were attempting to teach me how to calculate the correct COMPS!!!! Unless these complaint letters are really snobby, I don’t answer them. But while I do not have any problems about paying COMP prices for $150,000 single family homes offers should be made with future direction of the market which is totally different for single family homes that are priced in $150,000 range rather than homes that are priced in $500,000 price range.

As for Las Vegas real estate market for 2011

If things go the same way they have been, we will start a slow recovery in prices which will go on for a year or two, I have explained in Las Vegas economy and its effect on Las Vegas real estate that four levels of trickle downs have to happen and we have started seeing the second level which is a double digit increase in casino and convention business. Now our casinos have to feel good enough to give their workers more hours (I am not talking about new hiring) and employees have to feel good enough and pay down some debt before they start spending money.

I will write about why I expect Las Vegas foreclosures to down drastically in the future.

We are a couple of years away from sharp recovery in Las Vegas real estate and when it arrives it will not be linear. Masoud

Here is the deal; when a Greater Las Vegas home is going to be foreclosed on or with some homes that are sold through a short sale process, the owner stops paying taxes and HOA fees for their residence. However late HOA fees, back taxes and service liens, such as sewer, enjoy the status of super priority liens since these are the first to be collected upon the sale of the home and ahead of other liens.

Nevada (Home Owner Associations) HOA’s can only collect up to nine months of late monthly fees, however there is no limit on the amount of collections fees that collection agencies can charge. A real estate attorney stated that he has seen a $5500 collection fee for $100 in late HOA fees.

The arbitrary collection fees can run in $4,000-$6,000 range and the only way to contest this fee is by filing a law suit so this led to deals being cancelled in the last minute. The collection agencies obviously didn’t like this and are contesting Mr. Burns ruling in Nevada courts, I am rooting for Commissioner Burns.

If Commissioner Burns ruling stands it could bring down closing costs for a $100,000 foreclosed home in Las Vegas by 2% or more and that is good thing.

Property taxes for many Las Vegas homes and condos have been cut by 15%-25% or more, however many listings show 2009-2010 taxes instead of the new rate. Thus property taxes have to be verified when showing or making offers on homes or condos since a $500 per year reduction in taxes for a $125,000 home can significantly affect the loan amount for buyers who want to finance their home and can equally affect cash flow for Las Vegas real estate investors.

Masoud’s Law:

A: A Las Vegas home, condo, high rise condo or commercial property seller is NOT stupid, even if it is a bank selling foreclosures.

B: Most Las Vegas real estate deals are ZERO sum deals and thus adversarial.

This is the reason that a seller would hire one or more real estate professionals to help them set a proper price for their property. Banks get at least two broker price opinions (BPO) before they list their bank owned Las Vegas home or condo. Nowadays the banks get an appraisal for short sale Las Vegas homes or condos before they OK a short sale. The buyer or his agent will not fool anyone.

Furthermore, banks have been doing foreclosure sales for a while and by now they have a pretty good idea about Las Vegas property values. However, while some banks and their agents would market the property for far less than the desired price to get bidding wars going, others will put a higher price and expect to get lower offers. Asking prices mean nothing.

70% of my time is dedicated to researching the Las Vegas real estate market. Why would I spend so much time doing research? Because an intelligent offer on  Las Vegas homes, condos or high rise condos should be made with several factors in mind.

1: COMPS or comprehensive market analysis of the property. We look at the prices that similar homes or condos in the immediate area have sold for in the last 1-6 months. By similar, I mean the same floor plan and square footage and the 1-6 month period depends on how dynamic the market is; if there are enough sales we try to keep in the last 90 days.

2: Las Vegas real estate market trends: If the market is going down quickly, we need to protect the buyer, thus the upper limit on the offer would be COMPS minus 10% or more for the offer. A couple of years ago we helped a disabled veteran buy a home for 28% below COMPS. His deal still stands as a great deal today. However, instead of paying rent he has been paying his mortgage for a couple of years now and has paid far less than he would have paid to rent the same home. Instead of paying a land lord by now he should have a bit of equity in his home. If the market is appreciating then COMPS become the lower limit for the offer.

3: Price range and type of the property: Many buyers ignore this important factor. Las Vegas foreclosure homes for sale get offers that are very close to asking price in all price ranges, however competition for homes priced under $100,000 is fierce. Buyers who think that they can lowball a bank property significantly will not succeed. Conversely many non-distressed Las Vegas luxury homes that are priced higher than $500,000 are priced unreasonably too high, we would lowball the heck out of these.

4: Condition of the property: The more work a property needs, the lower the price since the buyer has to put in his/her time and money to fix it. Furthermore, fixer upper don’t qualify for a loan, unless it is eligible for a construction loan to fix it. Fixer uppers or Las Vegas auction homes that have to sell for cash provide for some of the best deals to found today.

5: How many offers a property has: If the property has multiple offers, forget about low balling.

6: Intangibles: No two persons have the same taste, if a buyer falls in love with a Las Vegas property and tells me “Masoud, GET it for me”, then a premium has to be paid to GET the buyer the property.

7: Tangibles: Views, Las Vegas homes or condos with Strip views command a premium as well as homes with larger lots or that have a great back yard, pool, spa, etc.

8: The seller: Is the seller willing to get into protracted negotiation? No if the seller is a bank. Yes if the seller is a private individual selling a non-distressed home or condo.

Picking the right price to make an offer is NOT done through reading newspaper articles or taking guesses. A Las Vegas real estate buyer’s perception of the market condition could be their worst enemy. Only accepted offers lead to deals, not rejected offers. So here is our policy regarding making offers on behalf of our clients.

• We try to make the lowest possible offer that has a chance at getting the offer accepted

Fannie Mae is offering 3.5% of the purchase price as incentive for foreclosed (REO) properties that it sells through a special program called HomePath.  Las Vegas foreclosure home, condos and high rise condominiums buyers will get 3.5% of the purchase price to use toward closing costs, buying home warranty, appliances, repair costs, interest rate buy down, etc.

Imagine Las Vegas high rise condos and financing!!! Fannie Mea finances its foreclosures and high rise condo are not an exception due to the fact that Fannie Mae doesn’t require an appraisal for its bank owned luxury high rise condos.

This Fannie Mae HomePath incentive cover owner occupied buyers only and excludes Las Vegas real estate investors, even vacation home or second home buyers.

In order to qualify for this incentive, buyers have 60 days from the acceptance of the offer to close the deal; time frame for this incentive is from September 23^rd 2010 to December 31^st.

I heart Fannie Mea because what they do is really effective and their foreclosures bring the highest price for any bank owned in Las Vegas and this helps our real estate market.

I will discuss Las Vegas condos that rent for more $500 per month and higher as the inventory of condos that rent for less than $500 is low and most units are in duplex or four-plexes.

A look at condos that have rented in the last couple of months shows those condos that have been purchased for $30,000-$50,000 and rent for $500-$750 or a bit higher. Let’s look at a real life example.

A two bedroom, two bathroom Las Vegas condo that was purchased in 2010 for $45,000 rented this month for $725 per month. Gross income from this condo is $8,700, HOA fee (condo fee) is $135 per month and taxes run about $650 per year, owners Insurance and home warranty, run about $75 per month. Home warranty is important as it protects the owner from large repair costs. The net income after deducting costs is about $460. Cash on cash return for this condo is 12.25% and cash flow from this condominium depends on the owner’s tax bracket, etc.

12.25% cash on cash return is a great return on investment in today’s economic conditions but not all investors will end up with this kind of cash flow. One of the highest prices paid for a condo that rents for $550 was about $64,000. The cash flow for this condo is low. Conversely someone purchased a condo for $38,000 and rented it for $800 per month (one of my clients) and she will get a much better cash flow than 12.25%.

The trick is to know which condo communities and areas offer the best return on investment and we have done the research to identify these condo communities.

Las Vegas condos that have been purchased for more than $100,000 in 2010 rent for about $1,100 plus-minus 150 per $100,000 in purchase price however cash flow is a bit less than condos in the $30,000-$60,000 range due to higher HOA fees and taxes.

Las Vegas real estate market for condos that are priced higher than $125,000 is far slower than condos that sell for less than $50,000. Some of these higher priced condos have sold for over $500,000 just 4 years ago and will appreciate far more than cheaper condos when banks start financing condos again.

A few points about investing in Las Vegas condos first:

1: How to depress the heck out a product’s pricing? Make buyers pay in cash.  This is the case with Las Vegas condos for sale, except for a small segment of the market. I sincerely think that if most condos could be financed in Las Vegas, prices would go up by 20% or more overnight. I did a series of blog posts about Las Vegas homes and condos market conditions for condos priced over $150,000 that mimics Las Vegas luxury homes market while Las Vegas homes for sale priced $100,000-$200,000 are selling more than any other price range.

2: Luxury condos, such as condos at Lake Las Vegas, are being marketed for 20 cents on the dollar while Las Vegas homes that could be financed easily are selling for 35-50 cents on the dollar.

3: Lack of financing for Las Vegas condos cannot last forever; actually there are ongoing discussions to remedy this.

Facts above, combined with Las Vegas residential real estate being undervalued by about 18%-20% make Las Vegas condos a good real estate investment opportunity. However, the investor has to pay for condo in cash and in full. This brings up the following question.

Is it better to buy a condo in cash or use the money as down payment and finance a home as an investment?

This is very good question and subject of a few future blog posts but we are discussing condos now.

As for owner occupied condo investors, I did a blog post about making double digit cash flow on Las Vegas duplex and four-plexes along with an example for buying a $100,000 four-plex.

Generating cash flow from owner occupied Las Vegas condos or homes

There is no need to discuss this further.

I will discuss making cash flow on Las Vegas condos next.

Bank of America said that problems with foreclosing on poor home owners are not wide spread, but “We’ll go back and check our work one more time,” CEO Brian Moynihan said. What a nice guy!!!  See ; they will go back and check (one more time), which implies they have checked a couple of times beforeJ and having foreclosed on tens of thousands of homes, illegally or improperly has absolutely nothing to do with it as there was no pressure from the Attorney Generals either and there will be no investigation by the Senate Banking Commitee (like that would do anything anyways).

At any rate, Bank of America has joined Ally Financial and JP Morgan in halting foreclosures. There has been widespread talk of Bank of America foreclosing on a significant number of Las Vegas condos and homes that they have been postponing for months. Nowadays, it takes 12-18 month to foreclose on Las Vegas homes or condos and the freeze should allow distressed Las Vegas home owners to stay in their home a couple of months longer.

Banks have wisely chosen to sell distressed homes or condos through the short sale process given that it would save them 10% or more and in a small percentage of cases they will actually do a loan modification. But many short sales don’t go through and loan modifications cannot get done due to Las Vegas home owner’s lack of employment. The reason that the number of Las Vegas foreclosures have dropped is banks are trying to get away from it and not that our economy has gotten so much better, even though our economy is picking up slowly but surely.

So Las Vegas foreclosure homes, condos inventory will be low for a few weeks or months longer. Lastly,  the Bank of America foreclosure moratorium includes properties that they turned over to Fannie Mae or Freddie Mac for insurance money.

Fannie Mae has announced their Fall Sales Incentives for bank owned home and condos that it sells through their HomeSteps program. I have previously written about HomePath financing to buy Fannie Mae foreclosed homes or condos in Las Vegas and about investing in Fannie Mae properties Invest in Fannie Mae Las Vegas foreclosures, 10% down, no appraisal or PMI. Freddie Mac also allows you to finance their condos through the HomePath financing.

Incentives are available for owner occupied Las Vegas, Henderson, North Las Vegas homes, condos and townhomes that are sold for higher than $25,000. Investors or vacation home buyers are not eligible for these incentives.

 Offers have to be submitted from September 13, 2010 to November 14, 2010 and the escrow has to be closed on or before December 31st. Incentives include the following:

1: Up to 4% toward buyers closing costs.

2: Two year home warranty. If a problem is pre-existing (prior to close of escrow) it may not be covered by the home warranty. We always strongly suggest that a home buyer should get an inspection of the property by a Nevada licensed inspector. This is especially  true if a buyer purchases a foreclosure, since they are sold “as is, where is”.

3: Up to 30% discount for appliances. The buyer has to contact a a HomeProtect customer care specialist and he or she will help you find what you need at a savings of up to 30% off the manufacturer’s suggested retail price.

Fannie Mae is my favorite lender to buy foreclosures from. They don’t require PMI or appraisal and their bank owned homes are some of the cleanest foreclosures in the Las Vegas area and majority do not need any repairs done.

I have concluded working on my web-site in addition to many blog posts in the last three months. I put in more than 40 hours during the Labor Day weekend and 50-60 hours plus a week. I had a huge semantic error in the web-site that kept it from top Google rankings. I finally figured it out and in a month or so we should have first page links in all categories, however I am very tired and will not blog regularly for a week.

Related web-site page: Nevada First Time Home Buyers Grants, Mortgage, Down Payment Assistance

I wanted to do blog for $150,000-$200,000 price range but since we have only 38 properties available for sale and only 4 sold in August-2010 the sample size is too small to analyze, so I will cover all condos that are priced higher than $150,000. It should be noted that this series doesn’t include Las Vegas high rise condos and lofts. I will discuss them on an individual basis.

Las Vegas inventory of condos and lofts listed for more than $150,000 is 96 and 10 condos sold in August. This puts our inventory at 9.6 months. However, to have a meaningful discussion I will go back 2 months.

The table below shows inventory of Las Vegas condominiums and lofts for August 2010 by type

Only three luxury condominiums are priced higher than one million dollars, one in Mira Villa at Summerlin and two are at Lake Las Vegas. 84 out of 96 are priced below $500,000. Even though foreclosures and short sales still offer the best deals, asking prices for regular sales condos compete well with distressed sale pricing. However, some non-distressed condominiums in the same condo community are price at 200% or more of distressed or reasonably price condos.

The highest asking price per square foot is quite a bit more than $500, while the highest price per square foot paid in Las Vegas is $357. I f your asking price is 30% more than the highest price paid in the Valley in the last 6 months, chances are it will not sell.

Two short sale condominiums at Meridian sold for $115 dollars per square foot and you saw $140 per square foot paid for two bank owned condos there in the last blog post. Now you decide the following:

Is investing in Meridian condos a good idea or not?

Clearly it is in the first case and probably not a good idea in the second case, since they are already in the hole for $15-$20k when compared with comparable units.

The reason that I will not discuss sold numbers is that there is just not enough data to do it right. However, I will discuss the reason for lack of activity in this segment and it is simple. It is next to impossible to get financing for these condos and lofts except in two cases and one is builder financing, call me for the second.

In order to buy a home that needs a JUMBO loan, the buyer has to put up a significant down payment, say 40%. So for someone that wants to buys a $600,000 condo, he/she has to put up $240,000, which they could use to buy a $240,000 condo and not have any payments.  Check out my blog about Las Vegas real estate market – homes for sale priced $500K-One Million and you will see it is similar to the condos and lofts market report for this price range. Some of these below $250,000 condos or lofts are truly luxurious and can’t be built for the asking prices, ever. There are four bank owned lofts at L0ft 5 are listed in the Las Vegas MLS. Asking prices for these luxurious, highly upgraded condo lofts start at $75 per square foot which is a true bargain. Lack of financing has badly hurt this sector which makes for a great bargain for cash investors.

Related Web-Site links and blog links:

Las Vegas condos, lofts for sale $100,000-$150,000 market report

Las Vegas condos, lofts for sale $50,000-$100,000 market report

Las Vegas condos, lofts for sale priced below $50,000 market report

Las Vegas Condos – Lofts– Luxury Condominiums for Sale

Las Vegas real estate market report for bank owned (foreclosed) condos and lofts, short sales and (non-distressed) condominiums or lofts for sale in Las Vegas, Henderson and North Las Vegas priced at $100,000-$150,000. Our total inventory in this price range is 197 which are available in 63 different condo communities. 8 are clustered around Village Center and Summerlin Pkwy. Three are at Lake Las Vegas, 2 in N.W. Las Vegas and 8 in S. Las Vegas and 10 in the Henderson area.

38 condo and loft units have sold in August-2010. This puts condos, lofts inventory at 5.2 months.

Check out the significant drop in the number of inventories as our inventory in this price range is 20% of condos for sale inventory for the $50,000-$100,000 price range. This is the reason that I am doing Greater Las Vegas condo and loft market reports in $50,000 increments.

Midrise Luxury lofts at Loft 5 and condominiums at Park Avenue and Manhattan and The District show up in this price range. The table below shows sold numbers for August 2010 for bank owned, short sales and traditional sale condos and lofts.

Did bank-owned condos really sell for 106% of asking price? Are results accurate for this segment? Yes and no. If one takes a closer look, he/she will find that the condos sold at Meridian are skewing results since our sample size is not large enough. One Meridian condo, with an asking price of $107,000 sold for $150,000 and two others sold for $16,000 and $12,000 over asking price, these buyers paid about $140 per square foot and didn’t get a good deal, even though they purchased foreclosures. This goes to show you that buying a foreclosure in Las Vegas doesn’t mean that you automatically get a bargain.

Other than Meridian and Manhattan condominiums, the rest did not sell for the asking price. Sold condos have been priced well and this can’t be said about condos that are currently listed, as a significant percentage of the non-distressed condos are priced so unreasonably that their chance of selling is zero.

A few condos that are currently listed in one condo community that I will not name are listed at 300% of sold prices. I am discussing condos in $100K-$150K price range and we just had an offer accepted on a move in ready bank owned condo for $26,500. I am always perplexed at why a Realtor would list a condo that has no chance of selling. However, one short sale agent that only wants to be contacted through e-mails and (too busy to take phone calls!!!) has listed the condo as both a short sale and a foreclosure at the same time takes the top honor. This short sale condo will get foreclosed upon. I wonder if a Realtor is too busy to answer phone calls about his listing, why is he in this business?

The majority of condo communities in this price range have all the amenities, such as pool, clubhouse, exercise room, etc. HOA fees are from $125 per month to $700 range in The District.

Related Web-Site links and blog links:

Las Vegas condos, lofts for sale $50,000-$100,000 market report

Las Vegas condos, lofts for sale priced below $50,000 market report

Las Vegas Condos – Lofts– Luxury Condominiums for Sale

Las Vegas new condos, lofts for sale

Las Vegas real estate market report for bank owned (foreclosed) condos and lofts, short sales and (non-distressed) condominiums or lofts for sale in Las Vegas, Henderson and North Las Vegas priced at $50,000-$100,000. Our total inventory of condominiums for sale in this segment of the market is 995 and 264 condos and lofts have sold in August-2010. This puts our inventory of lofts and condominiums at 3.76 months, which is slightly more than the inventory in below $50,000 range.

995 available condos and lofts inventory are divided as follows, foreclosures= 22%, short sales=49% and non-distressed sales=29% while 61% of sold condos and lofts are bank owned or foreclosures.

The table below shows our current inventory of condos and lofts for sale in Las Vegas, Henderson, North Las Vegas and Boulder City for sale for $50,000-$100,000. The highest price per square foot is $132/SF that was paid for a condo at Meridian. Condominiums at Meridian used to sell for about $100 per square foot a couple of years ago. Two of the lowest price per square foot condos have been sold in Amber Hills (built in 2004) for $42/SF and one in Centennial Highland (2005) in North Las Vegas. Buyers don’t buy garbage, even at these lower price ranges.

The Meridian condo was the only mid-rise luxury condo in this price range, otherwise all condos are track condominium communities. Now don’t get me wrong, some of these are very nice condo communities that offer all or most amenities that come with luxury mid-rise condos and some actually have higher HOA fees than Mid-rise condos. A good example is Pinehurst Condos HOA fees are $235/month, Pacific Hills condos in Summerlin HOA fee is $ 205 while HOA fees for Manhattan is about $250/SF. All three condo communities offer clubhouse, exercise rooms, pool, spa and playground.

Sold data by type are shown in the table below.

Compare these numbers with condos that are priced below $50,000 and you see a big change. Regardless of the type of condo, the only condos that have been sold for near full asking price are bank owned condominiums that sold in less than a month. No other sector has sold for full asking price. Now, .2% here or .3% there can add up to 3%-5% price depreciation in this sector. Thus in order to protect buyers at this price range, offers should not exceed more than 95% of comparables.

The reason that I am blogging about condos and lofts for sale in Las Vegas, Henderson and North Las Vegas in $50,000 increments is that $50,000 jump in condominium prices equals a $75,000-$100,000 jump in home prices as far as Las Vegas real estate market is concerned.

Related Web-Site links and blog links:

Las Vegas condos, lofts for sale priced below $50,000 market report

Las Vegas Condos – Lofts– Luxury Condominiums for Sale

Las Vegas residential real estate

The reason that I have doing a market conditions report for lofts and condominiums and have excluded townhomes, is that as far as lenders are concerned, Las Vegas lofts are treated as condos and this makes financing them very difficult, however townhomes are treated as single family homes and are easy to finance. There aren’t any lofts for sale in this price range.

About 500 out of 1750 condos and lofts for sale are priced at $14,000-$50,000.

The table below shows the current inventory of condos by type (foreclosures, short sales and non distressed sales). The total inventory is 1577 while 476 condos and lofts sold in August-2010, so this represents 3.75 months of available inventory. Total inventory of condominiums and lofts, priced below $50,000 is 500 while 190 sold in August, so our inventory in this price range is 2.6 months.

The table below shows our current inventory of condos for sale in Las Vegas, Henderson, North Las Vegas and Boulder City that priced below $50,000.

The reason that I have put $14,000 as minimum price is that there aren’t any condos or lofts for sale that are priced below this amount.

Even though the number of condos sold for less than $50,000 is far less than Las Vegas homes for sale priced below $100,000 sold data closely mimics this sector.

Prices in condo communities that rent well, like Craig Roads Villas which is close to Nellis Air Force Base have actually appreciated by about 10% since February-2010; the reason is ease of renting and pretty decent cash flow. The last investor who we helped buy a condo there rented her condo the day after she closed escrow on it.

Let’s take a look at cash on cash returns on a ground floor two bedroom, 974 square foot condo which rents for $600-$650 per month. These can be purchased for about $35,000 and HOA fees and taxes for these condos add up to $205 per month. Excluding other costs like vacancy or repair costs, cash on cash return for this Craig Road Condo is 13.7%-15.4%. This is the reason that prices have appreciated by 10%. Condos like these make for good investment opportunity in Las Vegas real estate.

Check out the numbers in the table above. More than half of non short sale condos closed escrow in less than 30 days; this is due to the fact that the vast majority of condominiums in this price range are cash only deals.

I do not see any price drops for condominiums that are sold in this price range.

Related Web-Site links:

Buy short sale homes or condos in Las Vegas

Buy foreclosure or bank Repo Las Vegas homes or condominiums

Las Vegas Condos – Lofts– Luxury Condominiums for Sale

Some Las Vegas homes or condo buyers are NOT aware of the fact that a home or condominium seller only looks at the offers in terms of NET gain and pay no attention to the offer amount. To explain this I will discuss a hypothetical situation below:

A Las Vegas home for sale is priced at $200,000 and needs about $5,000 in repairs done, Las Vegas Realtors commissions are 6% and the buyer’s maximum amount allowed towards closing costs is 3.5%. Now the seller gets the following two offers:

Offer one: Is from a buyer who needs to finance his deal and offers $215,000, the buyer asks for the maximum $7,525 towards his closing costs and $5,000 seller contribution toward repairs. The net to the seller for this after deducting buyer closing costs and repairs and Realtors commission is $189,575. I am not including sellers closing costs as it remains constant for both offers.

Offer two: Is from a Las Vegas real estate cash investor at $202,000. Given that it doesn’t make sense to ask for closing costs or repair costs in a cash deal, the investor doesn’t ask for any. In this case the net to the seller is $189,880 and the seller will take the second cash offer in a heartbeat while the offer amount is $13,000 less than the first. The net for this offer is a bit more than the other but we have found that even if a cash offer nets less than the loan offer the banks will sometimes accept the cash offer over the loan because they can close a cash deal quicker and with less chance of falling out of escrow. If both offers needed financing the highest net would win.

Las Vegas homes or condominium buyers who have to finance their deal ask for seller contribution towards closing costs or repairs because they don’t have enough money to comfortably pay for them, this is not true for cash investors.

It doesn’t make sense for cash buyers to ask for closing costs or repairs because all that has to be done is to lower the offer amount by the desired number and submit a clean contract which has a much better chance of acceptance.

1: Las Vegas short sale home seller DOESN’T have to be behind in paying their mortgage.

2: No offer is needed to start the short sale process, listing a home or condo is enough. This will prevent ridiculously low asking prices so the listing agent would get an offer on the home before starting the short sale process.

3: The listing agent doesn’t have to waste a great deal of time trying to locate and open communication with an asset manager.

4: A short sale manager will contact the seller if necessary, the Realtor can be present when the short sale manger is interviewing the seller. This is awfully cool since the Realtor should be familiar with and bring up the issue of specific performance and try to get the seller out of hot water, if at all possible.

While I am on the specific performance issue, the asset manager said that he is not aware of anyone going after the short sale home seller for the first mortgage, but if a second mortgage is involved, it is sold to the type of people who have no conscience and would barbeque their own mother and eat her if there was any money in it. I am not kidding you.

5: If an offer is made on the property, the listing agent will e-mail the contract to the short sale manager which will review the contract and order and order an appraisal, NOT a BPO (broker price opinion). Unfortunately we run into low appraisals since if a home really appraises for $20,000 over the sale price the appraisal will come in at $1,000 over. Banks can obtain an appraisal from 150 mile radius of the property. Some appraisals in Las Vegas are done by appraisers in Bakersfield, California who are clueless. Wachovia will negotiate differences between their own appraisal and buyer’s appraisal that is mandated if the buyer has to obtain a loan.

6: It should take 6-10 days to obtain a bank approval for the short sale.

7: The Wachovia Short sale seller DOESN’T have to be an owner occupier. Las Vegas real estate investors are eligible to take advantage of the short sale process

8: If there is a second mortgage involved, Wachovia will try to settle the second mortgage with the lender. If a second mortgage can be settled they can close the deal in 45 days or less.

Related blog posts:

Foreclosure, Short Sale or Deed in Lieu? Which one will do less harm to your credit?

Foreclosure, Short Sale or Deed in Lieu? Which one will do less harm to your credit history? Part 2, Las Vegas short sales

Foreclosure, Short Sale or Deed in Lieu? Which one will do less harm to your credit?

Related Web-Site links:

Las Vegas short sale homes or condos for sale

 Las Vegas foreclosed homes or condos for sale

 Las Vegas homes or condos for sale

The 25,000-35,000 unsold foreclosure or Bank Owned homes in Las Vegas that banks are holding back from the Las Vegas real estate market for fear of price reductions, have been the talk of town until I CRUSHED it through 4 blog posts.

I put forth the mathematical formula for calculating the number of shadow inventory homes in Las Vegas and explained how it should be calculated. I can because I have aced many PHD level mathematics courses while in Graduate School.

In the concluding blog post in the series I stated that this number has to be less than 10,000 and the only reason that I don’t have an exact number is that I don’t pretend to be a Las Vegas real estate analyst and don’t tabulate for example, the number of homes sold in real estate auctions or in bulk sales of land to the Las Vegas new homes builders which I have explained in posts, but true real estate analysts should.

 When Las Vegas real estate analyst Dennis Smith kept repeating there are 25,000-35,000 shadow inventory homes in Las Vegas, I did a blog post titled

Real estate analyst Mr. Smith GUESSES the wrong number of Las Vegas unsold foreclosed homes

In this blog I wrote “The best analyst is Larry Murphy, the real estate analyst that I pay no attention to is Dennis Smith and unfortunately others do”. And the reason is that I know for a fact that Larry Murphy tabulates sales transactions in Las Vegas by type and would have access to all of the data that is necessary to calculate the number of shadow home inventory in Vegas.  BEHOLD – The conformation for my assertions came from Larry Murphy.

This is from The Las Vegas Review Journal article today.

“Murphy estimated a “shadow inventory” of 6,500 homes owned by the bank that have yet to be released on the market, plus 18,500 pre-foreclosure filings that may or may not go to foreclosure.”

He also said “Even a shadow inventory of 25,000 homes is not that many, he said. Las Vegas had 24,067 foreclosures in 2008 and 20,426 in 2009”.

See my blog post about the effect of foreclosures on Las Vegas real estate market.

Las Vegas real estate, the effect of foreclosures (bank owned homes) on the Las Vegas homes market

I also used Mr. Dennis Smith’s name in the blog title, I have never used a name in a negative blog, because I have power and have to use it judicially. My blog post will show up in the Goggle first page when searching for the name of the person that I wrote about and if it is negative, it will negatively affect that person’s life and he would have no recourse. Google, (Dennis Smith Las Vegas) and you will understand, and keep in mind that he is very popular. The reason is that all he had to do is to Google (shadow inventory homes in Las Vegas) and would have found my blog posts that disprove the numbers that he kept using after I published my series of blog posts. I am not here to hurt anyone, but his bull that is published by broke newspapers which need sensational stories to sell papers is seriously effecting the lives of my fellow Realtors and real estate agents by falsely scaring away home and condo buyers in Las Vegas, I know more than a few starving Realtors.

In case you think that I am over reacting, see national so called “real estate analysts” predicting 20% drop in Las Vegas residential real estate prices in the coming year that can be easily explained if we have 35,000 shadow inventory homes in Las Vegas and impossible to prove if unsold bank owned homes inventory is 6,500. I will explain this in the next blog post.

Our buddies at Neighborhood Housing Services of Southern Nevada have located other sources of funding for Wish Funds that is administered by the Nevada, HUD. Wish Fund is the 3 to 1 matching down payment program for Nevada first time home buyers.  I will reproduce Michelle Villero’s e-mail below, she is Homeownership Director.

Good Morning Partnering Agents,

GREAT NEWS!  We just received additional WISH Funds.  The catch with these funds is that it is Lender Specific.  If you have clients who are interested in going through the program for WISH please let us know and we will give you the specifics on who to contact. 

Please keep in mind that funds are first come, first serve basis.  Remind your clients that the only way to reserve these funds is to have a fully executed contract.  Clients will still have to attend an (8) hour Homebuyer Class with a HUD certified housing counseling agency and also meet with one of our housing counselors to determine eligibility.

Well, Las Vegas, Henderson and North Las Vegas, Nevada first time home buyers call us before it before it runs out.