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.

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.

“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

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.

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

3: What is investor’s timeline to buy?

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

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

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

The problem is that REO agents have learned from Las Vegas real estate auctions and put an unrealistic asking price on their listing in order to attract buyers or buyer’s agent’s attention in order to get multiple offers. They know well that offers are based on COMPS and not asking price, buyer’s agents know this too, but buyers who look themselves don’t know this.

This problem is magnified with short sales;

Banks don’t negotiate with short sale agents unless they have an offer in hand. So short sale agents sometimes put an unrealistic price on their listings in order to get the required offer. I have heard of cases that the owner’s cousin has made an offer on his/her cousin’s property so the agent can open the negotiation process. This is all good, except that after the receipt of the offer, short sale agents start negotiation with the lender and it takes time to reach an uncertain conclusion. In order to do a short sale, the owner has to prove hardship and the bank has to agree to the short sale.

The buyer needs to know this, or they can make tens of offers on ridiculously priced properties and get none, while wasting valuable time in an appreciating market which we have at the moment in Las Vegas.

Short Sales, Foreclosures and regular listings at the Signature at MGM Grand

A good example is short sale condominiums in the Signature at MGM Grand.

The Signature at MGM Grand listings=117

• Short Sale listings at the Signature at MGM Grand listings=64, sold in September=6, Price range=$175,000-$250,000
• Foreclosures or bank owned listings at The Signature at MGM Grand listings=14, sold in September=3, Price range= $125,000-$290,000
• Regular sale listings at the Signature at MGM Grand listings=40, sold in September=3, Price range= $170,000-$415,000

Now, when a perspective buyer contacts me in order to buy a short sale listing at MGM Grand priced at $100,000, what do think I should tell them?

By the way, the rush that alerted interested buyers at The Signature at MGM Grand condos have started and perspective buyers should raise their offer by 25% or more from a couple of months ago. Las Vegas high rise condo market has come to life.

Even a first grader can decipher what is selling at MGM Grand at it is foreclosures, they control pricing at MGM Grand.

Now multiply what I wrote about MGM Grand by a hundred and expand it to all homes or condo listings and you can see that doing something so basic as searching real estate data bases on your own could be misleading.

Masoud and Karen Saberzadeh, (702)-478-7800

I do not like to list Las Vegas properties that I can’t sell, and that is why I have only listed one home to sell in 2009. In today’s Las Vegas home and condo market, regular listings should be able to compete with bank owned or REO homes or condominiums. There are not too many listings that can compete with foreclosures and still leave the seller some kind money after deducting all expenses. Most of the homes or condos are short sales and I don’t list short sales or foreclosures. Regular sale (not short sales or bank owned) homes WILL bring more money than foreclosures due to the ease of doing the transaction and also the home is not sold as is and often is in better condition than foreclosures.

The home belonged to a California investor who wanted to go overseas and didn’t want to deal with tenants. However a tenant was already in the home and he was hostile. Hostile tenants do make it hard for the listing agent to show the house, even with 24 hours notice. The first time that I listed this home we would get a lot of requests to show the home, but the tenant would not allow us. So I called the owner and told him exactly what I wrote above, I don’t list a home or condominium in Las Vegas that I can’t sell and dropped the listing.

Three months passed and I got a call from the owner that the tenant was gone and he wanted to list the home again with me. No problems this time and we got a great offer which the seller accepted in less than a day. We will close the deal later this month.

The reason is that most investors who rent the home themselves usually use a standard rental contract that gives the tenant 24 hours notice before being able to access the home or condo. This will bite the investor when they want to sell a home or condo as other Realtors or buyers do not want to wait 24 hours to see the home. They either skip it completely, or in a competitive market, the buyer may see other homes first and if he/she likes one, they will not be motivated to see the home 24 hours later.

The Las Vegas real estate investors who may want to sell their home while under a lease agreement should think of this issue before signing a lease agreement. They should contact a real estate attorney about inserting a clause in the contract that gives the owner the right to put a lock box on the tenets door and be able to show the home within 2 hours after notifying the tenant.

Our brothers and sisters in American Samoa, Indonesia and the Philippines are dealing with disaster after disaster and lost families and properties. I am praying for the Good Lord to give them infinite patience to overcome the sadness and hopelessness that arise from these disasters as you should.

I was notified today that my beloved aunt, Saltanat Mojthed-Soleimani passed away. I loved her deeply and am even sadder for my mom who has to bear losing a sister. My condolences to Soleimani and Mostofi families, plus many others.

I always tell people that when you were born, you cried. Live in a way that when you die, the world cries for you and she did. There are crying eyes in at least three continents that I know of.

Masoud and Karen Saberzadeh, 702-478-7800, saber@lasvegas4us.com

In August, 42 percent of residential real estate deals were cash transactions, 23 percent were financed through conventional loan and 5% were VA loan; also 92% percent were priced below $300,000.

Even though much of the run on Las Vegas residential properties have been attributed to the US Government tax credit for first time home buyers, this is not the only factor in the run on Las Vegas homes and condominiums. Most of the real estate investors which are responsible for the 42% cash deals will not benefit from the tax credit. Some of the investors have actually financed their deal and not all homes or condo buyers are owner occupied first time home buyers, so the effect of the tax credit on the homes and condo market in Las Vegas is probably less than 20%. For example investors who invest in Las Vegas high rise condominiums like the Signature at MGM Grand Las Vegas will not benefit from the tax credit.

Below are the answers that we get from Las Vegas REO agents, the first one is for a home that we made an offer on for the aforementioned client when Karen wanted to confirm that they received our offer.

Attached is an offer on above property. Please confirm receipt. Thanks, Karen
Las Vegas foreclosure agent’s Answer: Your offer is received along w/ 25+ other offers.

Buy the Signature at MGM Grand condo before it is too late

Offers on MGM Grand: I wrote in my blog that MGM Grand is where Meridian Condos were 4 months ago and there is going to be a run on MGM Grand condos. Well the run has started, forget about further price cuts at MGM Grand for the near future and things will get worse from now on. 520 square foot studios that were selling for less than $125,000 are getting multiple offers at $150,000 or more. I called the listing agents for the 5 least expensive studio suits in MGM Grand, they were priced at $129,000-$169,000, and every single one had multiple offers on it. Below is the response from my inquiry about whether or not she has any offers on a 520 square foot condo at MGM Grand which was listed for $179,000.

Her answer: 3 and counting. Just called in 2 more agents

Buying a condo at Signature at MGM Grand Las Vegas will become very difficult, if you want to buy, the time is now.

I do not have a crystal ball and every time I have written about the Las Vegas real estate market, I have enumerated my reasons. No one can say what is going to happen to the Las Vegas real estate market in six months or a year or five years. However based on the past performance of the real estate market, one can take an educated guess at the future direction of the market.

If the same interest in the Las Vegas real estate market continues and the market is as active as it is now, look for true double digit increases in Las Vegas homes and condo prices in terms of comparables and this is the true measure of real estate market performance and not the meaningless median price.

Disclaimer: I don’t know the future behavior of investors as it is impossible to predict.

I personally don’t blame banks to choose an investors cash offer over those who want to finance their deal. The bank knows that the deal is going to close and most of the times there will be no appraisal since the investor would not want to spend money on the appraisal since it is not required by a third party beneficiary, such as a lender. The bank will not do appraisal contingent repairs before closing a deal, etc. There is no downside to selling a property for cash as compared to financing. So those who want to finance their real estate deal are in a great disadvantage compared to cash buyers and lose many offers to cash investors.

Enter, Fannie Mae and Freddie Mac, which are run by the same government that some people are scared to death of letting get between the benevolent health insurance companies and the insured  who are screwed by them every day.

Anyways, Freddie Mac and Fannie have started to put the emphasis on owner occupied buyers and in some cases do not accept an investor offer for up to 15 days, just like HUD who has the same policy with HUD homes.

This brings up the problem of financing a condominium deal in Las Vegas. If a buyer needed FHA or VA loan, we would check FHA and VA approved condo list that is available online before we showed the condo. All was nice and easy until Freddie Mac and Fannie Mae changed their financing criteria and announced that they will not finance condominium communities that are more than 50% investor owned or more than 15% of units have been delinquent in paying HOA fees for 30 days, etc.

This rule excludes the vast majority of condo communities in Las Vegas and made our job next to impossible as we can’t check on the delinquent HOA fees every time we show a condo in Las Vegas. Keep in mind that the delinquencies for HOA fee is a fluid situation and can change month to month. Again, Freddie Mac and Fannie Mae are financing their own foreclosed condominiums and this the best way to buy a condo that needs to be financed.

Some may be wondering about why I have started to blog more frequently. Well I have not mentioned the fact that last time that Google updated their search engine rankings, I was expecting a big fall in the rankings due to lack of activity in blogging. Instead I saw a meteoric ascension in rankings to a point that www.lasvegas4us.com is in the top 3 real estate web-sites in Las Vegas if not the dominant one. Total domination is about 6 months away. To give a couple of examples if you search highly competitive key phrases like (Las Vegas commercial real estate), the first top three links are mine, and I am beating national web-sites like loopnet, costar and cityfeet.com. Or (Las Vegas real estate auction), again top three links are mine (top three links in Google is close to domination), I have about 50 pages of top 20 links in Google. The deal is if I don’t keep up blogging my stay at the top will be followed by a free fall and I have worked my heart out for the past few years to get to the top.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In the last blog post I wrote “I have designed the web-site and blog so it attracts educated buyers and sellers. The problem is that some of these people believe that they know the Las Vegas real estate market better than I do. NOT happening and I don’t appreciate it.  Since so far, I am the most accurate predictor of the market direction, especially since the meltdown as we started to get real numbers from the government and not “the fundamentals of our economy are strong”.

I love the blog since there is always a written record about what I write about.

Below are a few paragraphs from my Las Vegas real estate market predictions. You can find the blog post at Las Vegas Homes, Condos, Land and Commercial Real Estate Team wish all a Happy New Year.

 ”Masoud Saberzadeh’s predictions for 2009

3: Barring catastrophic economic events, Las Vegas residential pricing for homes and condominiums that are under $320,000 will pass the point of convection. (This is becoming true for homes under $200,000).

4: Las Vegas Land prices will be selling at 35%-40% of their peak pricing. (Asking for these parcels of land has not gone down to this level, but sold prices are)

5: Las Vegas Industrial properties prices will come down 40% from peak levels. (Same as above)

6: Asking prices at City Center will come down. (They kept denying this until last month, now they announced that they will cut prices, but not by how much).

7: If not now, barring catastrophic economic events, Las Vegas will offer the best investment opportunities on earth. I mean it as it is already possible to make 7% or more through investing in Las Vegas homes or condominiums. Las Vegas commercial real estate has a bit further to fall.” (10% or better cash on cash returns are possible now).

Keep in mind that it took a lot of courage and a bit of craziness to predict what I did on January 1^st, 2009 when all that was being published were doom and gloom reports.

Now comes “proof” and it “has to be right” since it was printed in a newspaper

Las Vegas area home prices edge up. Las Vegas Review Journal August, 20, 2009

A few paragraphs from this newspaper article.

 ”It’s tough for owner-occupants with limited financing to compete against guys such as Bob Schulman, chairman of Las Vegas-based Montecito Cos. He started a fund capitalized by institutional and high- net-worth investors to acquire 100 to 125 foreclosed homes in Las Vegas, targeting the Summerlin and Green Valley master-planned communities. Subsequent funds could acquire up to 500 homes.

Schulman said he looked at all potential real estate opportunities — from new construction to value-added acquisitions of existing apartment, office and industrial properties — and determined that the best value was to be found in single-family homes.

Not only had they overcorrected in price, they were substantially undervalued, he said.

“We looked at residential land here with homes on it, and they were 30 percent to 40 percent below the cost to build,” Schulman said. “Why would I buy land? I can just buy the house with no risk.”

Murphy said investors such as Schulman are really driving the entry-level market and taking those homes out of the inventory, which declined in July to 11,905 listings from 20,641 a year ago.

“Frankly, that’s where the smart money is, and I can’t fault them,” Murphy said.”

Now this Schulman guy is the smart money due to his extensive experience with the Las Vegas real estate market.

Those who read my blogs on a regular basis have seen the same in my previous blogs, except that these blogs have been written months ago.

I have only written one sentence in my blogs that we will know much more about Las Vegas homes and condos market by November. I have told my big investors to wait until November to test the market and buy in Decmber-2009 to February 2010, because I believe that we will have more inventory and a better selection of homes and condominiums. The banks will be more open to negotiate when they have a larger inventory.”

This doesn’t apply to small investors. If you find a nice deal now, get it.

Some “analyst” predicts that home and condo inventory will be affected by expiration of the tax credit for 1^st time home buyers. They should wait to see what the United States congress is going to do first.

One last point, DO NOT believe commercial real estate agents in Las Vegas that tell you I have a great deal for you. A great deal now, will not look so great in six months to a year. That is the reason that a big time commercial real estate investor is buying residential real estate now.

The current data are showing a false bottom and prices will go up and down in progressively narrow range for a while. But a good deal now for a Las Vegas home or condominium will still be a good deal come next year.

At the conclusion, real estate investors that get all their info from a few articles and think they know the real estate market in Las Vegas better than I do and go as far as e-mailing me such articles to prove their point. DON’T do it, this is not a Nike commercial.

If you like my blog posts you can subscribe to it by clicking on the RSS Feed on the top right hand column.

Contact us at lasvegassaber@yahoo.com or call us, 702-478-7800. Masoud

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

Well, seems like someone is reading my blog, since the Las Vegas Review Journal, for the first time did two articles that discussed much of what I have written in the last two blog posts, such as the number of pending sales and contingent sales in Greater Las Vegas and why they should not be included in the available for sale numbers.

Even Greater Las Vegas Association of Realtors are considering changing how the count available for sale listings. See the articles below.

HOUSING MARKET: Prime loan borrowers may be poised to face home foreclosures, local foreclosure crisis expected to worsen

Las Vegas home sales rise; inventory down, “it’s not the free fall we were seeing,” Realtors association president says.

See a few paragraphs from their articles below.

“The actual number of homes available for sale in Las Vegas, including foreclosures and short sales, is much smaller than the 20,613 units reported by the Greater Las Vegas Association of Realtors, industry observers say.

Las Vegas-based business advisory firm Applied Analysis is showing 13,028 properties listed as available for sale, down 9,224 units, or 41.5 percent, from a year ago. About 5,100 units are identified as short sales, which leaves about 7,900 units available for sale in a normal transaction.”

Isn’t this what I wrote? I must be an “industry observer”‼

Let me explain what Greater Las Vegas is, Greater Las Vegas consists of the City of Las Vegas, City of North Las Vegas, City of Henderson and Unincorporated Clark County.

The deal is that the reporter has to get his/her numbers from the “experts” and one of these is foreclosures.com. See the paragraph below and the next one also,

“For the first six months, Clark County foreclosures rose 84.3 percent to 23,588 from 12,800 in the year-ago period, Sacramento, Calif.-based investment advisory firm Foreclosures.com reported. Pre-foreclosures increased 34.8 percent to 47,467 from 30,922 a year ago.”

This number is NOT accurate, I get my numbers from the Trustee sale itself and the Number of foreclosed properties 1/1/2009-7/27/2009 is 20,000. 23,000 for the first six month of 2009 is dead wrong. Now pay attention that I wrote properties and not homes and condos since Las Vegas vacant land and commercial properties are included in these numbers. The reason that Trustee sale numbers are accurate is that all pre-foreclosure properties have to go through this sale in order to become bank owned or foreclosed properties.

In the same article

“Through June, financial institutions acquired 6,472 real estate-owned properties and sold 11,254, the broker-owner of Residential Resources reported. He defines an REO, or bank-owned property, as any transaction in which the lender acquired the property through a trustee sale.”

I am lost here, aren’t you?

I don’t agree with a lot of numbers in this article and trust me, mine are authoritative because I go to the source and don’t ask some “experts” from California.

I have started telling my investors that they have to wait for a couple of months before they buy residential properties, due to lack of inventory. I am not worried about a sharp price drop for Las Vegas homes that are priced under $250,000 and condos that are priced below $125,000. There is no inventory to buy.

A sweet lady from North Carolina whose daughter has found a job in the Aria Tower of the City Center visited Las Vegas to get familiar with the city and find a one story home with 3 bedrooms for her daughter for about $150,000. Her criteria is not unreasonable, she liked Nevada Trails in S.W. Las Vegas. I could not find one available for sale listing in Nevada Trails to show her and could show her two contingent sales only. There is a severe shortage of reasonably priced inventory now.

I tell my Las Vegas high rise condo investors to wait; I see big price drops coming.

Anyway, we should have definitive answers about the Las Vegas real estate market reports when the numbers for October and November come in. If the current level of banks foreclosing on the Las Vegas real estate and the current sale numbers hold in November, then watch out for the next year.

One last sentence “He’s heard that Fannie Mae and Freddie Mac foreclosures could increase by 400 percent to 500 percent by the end of the year.”

Rumors don’t make facts.

PS: I have designed the web-site and blog so it attracts educated buyers and sellers. The problem is that some of these people believe that they know Las Vegas real estate market better than I do. NOT happening and I don’t appreciate it.  Since so far I am the most accurate predictor of the market direction, especially since the meltdown as we started to get real numbers from the government and not “the fundamentals of our economy are strong”.

If you think that Las Vegas homes or condominium prices will tank, don’t buy now. No one has put a gun to your head.

If you like my blog posts you can subscribe to it by clicking on the RSS Feed on the top right hand column.

Contact us at lasvegassaber@yahoo.com, our phone number, 702-478-7800.

Related web-site pages: Las Vegas Homes, Condos and Commercial Real Estate for Sale, Las Vegas homes, condominiums and townhomes market report, buying Las Vegas condominiums for sale, Buying Las Vegas homes for sale

I have talked about how strongly Las Vegas real estate in general and residential homes and condominiums have been affected by foreclosures in Las Vegas. I have also written about the number of foreclosed or REO homes and condos in the last 12 months versus the number of sold condominiums and homes.

Please note that while the number of short sale condominiums and homes that are currently available for sale are more than twice the number of REOS or bank owned homes and condos, the number of sold short sale homes is 13% of the number of foreclosed homes, this number drops to only 9% for Las Vegas condominiums and townhomes.

The other point is that most foreclosed homes and condos that are listed in the Las Vegas MLS and are priced correctly, will get multiple offers in the first couple of days and after a few days the listing agent will submit the offers and the property goes into the best and highest offer phase and a few of the highest bidders will be invited to put in their highest and best offer.

When the highest and best offer is submitted to the bank, the bank will not accept any more offers and any offers made on the property will be as backups. The listing status will show (ER) until the bank supplies the buyer with an executed contract, so the buyer can open escrow and even then many REO listing agents do not change the property status until all contingencies are removed and the property is pending sale.

To give you an example, today we picked properties to show and pulled 23 foreclosed home listings and called the listing agents to inquire about the property status before we showed them. We called 23 listing agents for homes that are priced below $150,000 in North Las Vegas. 4 were under contract (contingent sale) and the listing agent did not update their listings. 6 had the highest and best offer submitted to bank and were taking no offers, 9 had multiple offers but were still taking offers and 2 did not have any offers, the other 2 listing agents did not return our repeated calls.

As you can see, even the 1800 foreclosure homes and 630 REO condos available for sale is not entirely true. Even if all the available listings for sales (ER) were really available (and they are NOT), we have less than 2.6 months of available inventory for homes in Greater Las Vegas and 2.15 months worth of inventory for Las Vegas condominiums and town homes. Again, homes or condos that are competitively priced for sale are less than 20% of the total inventory, so the real inventory is very low in Las Vegas.

This the reason that homes or condos that are priced reasonably get multiple offers in a couple of days and are selling over the comparable homes or condos or comps. One property had as many as 71 offers on it. It is nothing to get 10-15 offers in 2 days on the market for these homes.

Homes, condos and townhome prices have stopped sliding in price in the last 3 months and resale homes and condo sales are breaking the records that were set in 2004-2005. What this has done is the mountain of money which was sitting on the side lines waiting for the price depreciation to stop, have started to come to play.

More about this next blog and a few unrelated points below.

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Our e-mail address is lasvegassaber@yahoo.com and phone number, 702-478-7800.

Related web-site pages buying Las Vegas condominiums for sale, Las Vegas homes, condos and townhomes for sale, Getting the best deal for your Las Vegas home or condo, Buying Las Vegas homes for sale

The following paragraph is from the Las Vegas Review Journal that was published last week.

“In Southern Nevada, home inventory stood at 20,613 in June, compared with 23,388 in the same month a year ago, according to the Greater Las Vegas Association of Realtors. A record 4,702 homes were sold during the month, 74 percent of them foreclosures and 38 percent cash transactions.”

Anyone who reads this will think that Greater Las Vegas home or condo buyers can select from more than 20,000 homes or condos that are available for sale in Las Vegas, if that was true we would be in a buyer’s market and prices would be sinking with double digit numbers. Well, the above numbers are misleading at best, and below is why!

Las Vegas RJ counted contingent sales and pending sales in their number of for sale listings and there lies the problem. When a property is going through pending sale, or even contingent sale, all a buyer can do is to make a back up offer which most of the time will not result in an acceptance from the seller. So the pending sales should not count as available sales. If contingent sales fall through, then they will become available sale listings.

At any rate the number of listings which are available for sale in Las Vegas area through Greater Las Vegas Multiple Listing System (GVAR MLS) as contingent and pending sales are shown in the table below. I have added the number of sold listings for the last 60 days for Las Vegas homes, condos and townhomes so you can see how much inventory we really have.

Now of the 8800 homes that are currently available for sale in Las Vegas (ER) 1790 are foreclosures or bank owned or REPO homes and 3800 are short sales and the rest are regular sales. As for the 2800 Las Vegas condos and town homes, there are 630 foreclosures, 1120 short sales and the rest regular sales. Keep in mind that it is the foreclosures or REOs that put downward pressure on the Las Vegas housing market and as you can see there are not many left.

Since last August 1^st,2008 6370 condos and townhomes and 28630 homes have sold in Greater Las Vegas, 460 condos and townhomes have been short sales and 5045 have been foreclosures. Of the 28630 homes that sold 2980 have been short sales and 20650 foreclosures, the rest were regular sales.  

Let’s look at the numbers for July, 2009. In July the total number of condos and townhomes sold through Las Vegas MLS is 795, only 72 have been short sales, 630 foreclosures and 193 regular sales. The numbers for single family homes are 3130 total sales, 339 short sales, 2238 REOS and 553 regular sales.

Another very important number is the number of foreclosures by banks in the last year (since August, 2008) 32415 homes and condos were foreclosed, 25600 have sold through Las Vegas MLS the difference is 6815 which are yet to hit the market.  I don’t know how many have sold through Las Vegas real estate auctions but for the sake of argument let’s say zero homes or condos have sold in home or condo auctions.

The reason that I say let’s say no home or condos have sold in the auctions is that again Las Vegas newspapers (fear mongers to sell newspapers) are writing that the banks are keeping anywhere from 15,000-30,000 foreclosed homes and condos from hitting the market in order to stabilize the market. I have no idea where they get their numbers from. Even if we say that 3000 homes or condos are left over from more than a year ago, the number of these properties is closer to 10,000, rather than 15,000-30,000.

As you can see from the above numbers we burn through 10,000 foreclosed homes and condos in less than 4 months. The total number of foreclosure sales through Las Vegas MLS since April, 1^st is 11,425.

More on this later.

I have not been able to blog because we are slammed. Karen and I are working double overtime and having a hard time keeping up with inquiries from customers. There is an avalanche of customers but I will try to blog more often.

If you like my blog posts please click on the RSS Feed on the top right hand column and any new blog posts will e-mailed to you as soon I publish it.

I was stupid enough (I am good at this) that I did not put our contact info on the blog and quite a few people have complained that they had to Google my name to find our contact info. I have added the contact info about us in the bottom left hand column. However here is our e-mail address lasvegassaber@yahoo.com and phone number, 702-478-7800.

And at last a sincere apology to those who asked to exchange links with me or added me as a friend, I will get back to you as soon as I can.

Related web-site pages: Getting the best deal for your Las Vegas home or condo, Buying Las Vegas homes for sale, buying Las Vegas condominiums for sale, Las Vegas homes, condominiums, land and commercial properties