About Las Vegas short sales homes and condos, July 2014

The Mortgage Forgiveness Debt Relief Act expired in December 2013 and has not been re-instated yet.  So those who are short selling their home, condo or townhome run the risk of being taxed on the difference between the mortgage amount and net price from the short sale as income. This is the reason for the shrinking share of short sales homes in Las Vegas, Henderson and North Las Vegas which is down to 12% of total homes sales. The share of Las Vegas Metro short sales condos and townhomes has been about or less than 10% for 2014.

The other point was the change in the bank’s policies in countering unapproved short sale offers. Given the long time it that it takes for a short sale approval, banks used to counter the buyer based on the pricing at the time offer was made. This protected the buyer from the appreciation gained since the offer was made.

This changed in about August 2013 and banks are countering based on the current market prices. Buyer loses big, bank wins since they can market their short sale home or condo for sale as an approved short sale based on current prices and with minimal discounts. We do not even look at unapproved short sales due to continuing price gains, which average 1.2 percent per month for the past year. However approved short sales offer minimal discounts, and are worth going after as the price is already approved.

Unless the Mortgage Forgiveness Debt Relief Act gets reinstated, the number of short sale homes, condos or town homes for sale will not increase and due to low numbers and high counters from banks will not have a big effect on the median price for Las Vegas homes or condos or town-homes.

Sorry for disappearing web-site and blog, much trouble with the server which we have finally resolved (I hope).

Times have changed and Las Vegas short sales and foreclosures no longer have much of an influence on our real estate market. In the next video and blog we will discuss the factors that really affect Las Vegas residential real estate market.


Are Las Vegas foreclosures really affecting real estate market?

291 out of the 3196 Las Vegas homes, condos and town-homes sold in July, 2014 using a Las Vegas Realtor have been Las Vegas foreclosures or bank owned real estate. Foreclosures market share of total properties sold is about 9.1% and these did not sell at big discounts.

We do a short discussion about the effect of Nevada laws on Las Vegas foreclosures and how assembly bill 300, which made it far easier for banks to at least start the foreclosure process, has failed to produce the avalanche of foreclosures hitting the Las Vegas real estate market which some have been warning about for the umpteenth time. I wonder when these guys will get tired of crying wolf.

We also show that the number of distressed properties which are auctioned off at the Las Vegas Trustee Sale Auction, where the act of foreclosure takes place, has averaged about 527 properties per month for the past eight months, of which 61 percent were sold back to the banks and the majority of these will end up getting sold through the Las Vegas MLS.

We also take a look at notices of default which have averaged 750 per month and notices of trustee sale have averaged 910 per month. Given that only 25%-35% of properties that are scheduled to sale at the Trustee Sales Auction actually end up getting sold back to the bank, many get cancelled or postponed. There are no more than 250-350 Las Vegas, Henderson or North Las Vegas homes, condos or town-homes per month in the pipeline at least until 2015.

We have recorded this video in HD, but in order to see it in HD on YouTube please click the settings icon below the video and choose (720P or HD) and watch in Full Screen mode so you can see everything clearly.


Las Vegas residential real estate market report for June, 2014

The median price for Las Vegas residential real estate has gone up by about 15% in the past year and keeps appreciating more than 1.2% per month.

Even though Las Vegas real estate investor activity has slowed down from the peak of 56%, it is still difficult to outbid them for Las Vegas homes priced below $250,000 and condos and town homes priced below $150,000.

In this video we discuss Las Vegas residential real estate inventory as of July, 27, 2014 and sales numbers and median prices for Las Vegas homes, condos and town homes for June, 2014. We also comment on the direction of Las Vegas, Henderson and North Las Vegas real estate market for remainder of 2014.

Lastly, I have changed the software for these videos resulting in recording much better quality videos that can be seen clearly even on cell phones, just make sure that you watch it in (HD) mode by clicking the ranch below the video and choosing (720P) or (HD) and watch in (full screen mode) so you can see everything clearly.


Importance of pricing in the sale of Las of Vegas homes, condos, high rise

In this video we discuss the importance of correct pricing in the sale of Las of Vegas homes, condos and luxury high-rise condos. This is very important in the current Las Vegas real estate market as the market has turned and prices are going down and it all starts with your listing agents visit to you home or condo.

It is a mistake to have your Las Vegas Realtor see your property at the time of listing presentation, listing agents should be given access to the property before listing presentation so he/she can see selling points as well as problems in order to provide a target price for you property.

We discuss the importance of Las Vegas Realtor familiarity with your type of real estate deal and use an example of listing Las Vegas short sales. We found out that short selling a home may not be the best course of action for an underwater Las Vegas, Henderson or North Las Vegas home seller and for example bankruptcy may be the way to go. A top Las Vegas short sale agent should be at least familiar with legal remedies in order to point their client in the right direction without giving legal advice.

There are a few short sale agents who spent a great deal of time learning all about short sales. Although we have closed many short sales deals as buyer’s agent, we decided that we can never be as GOOD as these short sale specialists, the right thing to do is to was to refer short sales deals to the these agents. So we decided not to do short sales and refer them to the best agents for the job, if you need one, let us know. Your listing agent should have expert knowledge of the type of real estate deal.

Pricing Las Vegas homes, condos or high rise condos is a two stage process,

1: Figuring a target price based on comparable sales

2: Devising a marketing plan to arrive at the target sales price

We discuss how to calculate the asking price based on comparable sales for a proper duration of time taking into account the direction of the real estate market. This is not easy in always changing Las Vegas real estate market. For example the asking price should be higher than target price in a buyer’s market to account for the low ball offers, etc.

At this time it is difficult to find good deals because majority asking prices are too high given that prices have gone up in 28 out of the last 30 months but it takes time for Las Vegas real estate sellers to adjust their asking prices. However prices are going down some right now and Las Vegas properties that are going under contract now are selling less than comparables that have sold 6 month ago.

There is too much emphasis on median price of Las Vegas homes which is computed using a waited mix of sales results from previous months with the prior 2nd and 3rd months influencing the results the most, so it will miss sudden changes in the market and by the time it makes news it is 3 month too late. Your listing agent should know the current Las Vegas real estate market and not read about it in the newspapers when it is too late.

I want to repeat that this video series is published to help Las Vegas homes, condos or high rise sellers avoid bad listing agents so we are doing it as a crash course and cannot go into as much details as we want, so we are using blogs too.



While correct pricing is essential in generating interest in your property and  influences the offer amount, listing pictures and ease of access to the property are as important as correct pricing which we will discuss in the next blog and video.

Other videos in list, sell your Las Vegas home, condo or high-rise condo for top money while avoiding costly mistakes

How to search for best Las Vegas listing agents and test them


Sell Las Vegas homes, condos, high-rise for top money, introduction

Overview of process of selling Las Vegas homes, condos, high rise

In order to achieve success in selling Las Vegas homes, condos or luxury high rise condos you need an enlightened listing agent (Realtor) to list and market you property effectively in order to get the best terms, including the highest price.

I chose the word enlightened listing agent (Realtor) because it encompasses knowledgeable, professional, accessible and righteous.

We discuss how to conduct an online search for knowledgeable Las Vegas, Henderson, North Las Vegas listing agents (Realtors) to list your home, condo or high rise condo for sale.

After picking a few Las Vegas Realtors that you like, we talk about how you should initially contact these listing agents and strongly suggest that you call these listing agents with a question without telling them that you are thinking about listing your property with them in order to find out how accessible and helpful they are.

As a Las Vegas buyer’s agent we have dealt we hundreds of listing agents and the biggest issue is listing agent’s failure to answer questions about their listing in a timely manner, if at all.  Corrupt listing agents use inaccessibility as their best weapon to discourage other buyer’s agents and their buyers in order to get commissions for both sides of the deal.

After watching this video you can find good Las Vegas, Henderson or North Las Vegas listing agents who care about their business enough to have learned issues involved in your type of Las Vegas real estate deal and is professional enough to answer questions in a timely manner. You don’t need a Realtor who is too busy to answer phone calls or to give a good answer to a question.

Majority of Las Vegas Realtors will fail this test.

This is the third blog post  how to list your Las Vegas home, condo, high rise condo for sale for top money while avoiding costly mistakes.

Road map for success in selling Las Vegas homes, condos, high-rise

This is the second blog post in how to sell your Las Vegas home, condo or high rise condo for top price while avoiding costly mistakes.
 Sell Las Vegas homes, condos, high-rise for top money, introduction

In the last video that you can find above, we said the success in selling a Las Vegas, Henderson or North Las Vegas home, condo or luxury high rise condo is not achieved by accident, it is done through thoughtful execution of all steps in the process of listing and selling the property which we explain in a 7 part series of videos for you.

We discuss:

How to search for the best Las Vegas listing agents for your type and category of the property, for example a short sale high rise condo.

  • How to initially contact these agents
  • How to test them for professionalism and knowledge
  • What to insist and reject in a listing contract

We also talk about what a good listing should and shouldn’t contain and three elements a listing page contains that can directly affect how much money you get for your property. They are:

  • Correct pricing for your home, condo or high rise
  • Proper pictures of exterior and interior of property
  • Ease of access for buyer’s agents and their clients

We will explain the escrow process for those who are not familiar with it and closing the real estate deal in the conclusion.



I must confess that I have never enjoyed doing a series of blogs or videos on a subject as I have enjoyed doing the series about How to list and Sell Your Las Vegas Home or Condo for Top Price while avoiding corrupt listing agents, as this is my way of getting even with bad listing agents.

These videos inoculate Las Vegas real estate sellers against the corrupt listing virus, please watch, share and LIKE them if you find them useful.

We have shown you the overview of all steps involved in selling Las Vegas homes, condos, or high rise condos. We will explain each step in the selling process in future videos.

How to sell Las Vegas homes, condos or high-rise for top price, introduction

How to avoid corrupt listing agents while listing and selling Las Vegas homes, condos or high-rise condos, introducing Las Vegas real estate for sale channel.
We would like to announce Las Vegas real estate for sale channel on Youtube, this is the latest addition to the Las Vegas homes, condos, Land and commercial real estate web-site and this blog site.
We have already published 5 videos about the how to pick the best Las Vegas residential investment real estate and will revamp the web-site with videos about how to conduct different Las Vegas residential and commercial real estate deals to insure the best outcome.
The next series of 8 videos will discuss how to list and sell Las Vegas homes, condos and luxury high-rise condos for top money while avoiding costly mistakes and the reason for it is an article published in the Reno Gazette-Journal which analyzed thousands of records from the Northern Nevada Regional Multiple Listing Service or MLS. This study found corruption in more than 10% of dual-agency short sales by the listing agent.
These homes were sold for far below market value to pre-arranged cash buyers who flipped them for huge profits in a few months.
The article stated that $100,000 profit after flipping these homes in a few months were the norm and many sold for more than the original short sale seller’s mortgage and resulted in the short sale listing agent being able to collect a third or even fourth commission on the resale of the same property.
Think for a moment about the harm that these ethically challenged listing agents did to their clients who trusted them in a time of distress. In many cases they lied to their client, needlessly selling their home as a short sale, thus ruining the client’s credit rating for years to come in order to collect additional commissions that they did not deserve.
The question is how to avoid these cheats while listing and selling your Las Vegas home, condo or high-rise and to achieve it you have to be educated about the process of selling residential real estate.
That is exactly what we have tried to do in this video series and you can watch the first one at the bottom of this page.
Even though we discuss Las Vegas real estate here, methods are applicable to all US, Canada and anywhere else Multiple Listing Service is used and home or condo sellers who watch these videos cannot be cheated by unethical listing agents, they will shut them down from the get go.
Please watch these videos and if you find useful and Like and share them.



The next video will discuss How to conduct a search for a good Las Vegas, Henderson or North Las Vegas Realtor to list your home with and how you should initially contact these Realtors.

Las Vegas housing market, home prices, April 2013 Part 2

In the last blog post about Las Vegas real estate market in 2013 I discussed the big picture and forces that will shape our real estate market in at least the next year or two.

I promised that I will discuss 3 bills that are going to pass Nevada legislation that will be instrumental in our market.

The first bill is Nevada AB-300 which was to modify AB-284 which is erroneously blamed for lack of inventory in Vegas.  Any effects this bill has will be wiped out by the next 2 bills.

Well the most important news about Las Vegas real estate market is that changes to Nevada AB-284 which is believed to be the reason for more than 80% decline in Las Vegas foreclosures since 1/1/2012 are imminent and WILL be passed shortly. What it does in a sentence is it replaces personal knowledge about a chain of mortgage ownership with personally reviewed. I have written about this change in my last blog post.

It is widely and wrongly believed that this change will result in a significant increase in the number of Las Vegas foreclosures. There may be a significant increase for a short period to scare delinquent borrowers into realistically marketing their Las Vegas homes instead of listing their home just to postpone foreclosure. Laymen also believe that the increase in the number of foreclosures will result in a 20% decline in today’s market values (not asking prices, values) and that is not going to happen, period. (I did not know about the next 2 bills when I wrote this.)

The number of notices of defaults has tripled in February, 2013 as compared to same month last year as headlined in news organizations. All it means is that banks have given notice to borrowers who have been living in their home, mortgage free for average of 28 months, saying hey guy, you are behind on your payments and are defaulting on your mortgage. Wow, what earth shattering news, like the borrower didn’t know. It is the notice of Trustee sale that counts.

However 2 bills have already passed the Nevada Senate and are waiting for the other chamber to pass in order to become law. So you will not hear about it for a while. These 2 bills are GAME CHANGERS and if become law, what you have seen so far is nothing, things will get much, much worse for buyers and investors and prices will shoot up significantly as they are right now. The worthless median price will show a big jump in June and July that reflect homes that have gone under contract in March and April.


2013 Nevada Legislative Session update:

SB321 Enacts a “Homeowner’s Bill of Rights.

Follow the bill:  http://www.leg.state. nv.us/Session/77th2013/ Reports/history.cfm?ID=772

SB 424  – passed the senate

Follow the bill here:

https://nelis.leg.state.nv.us/ 77th2013/App#/77th2013/Bill/Ov erview/SB424

The bill, in its original form, would provide that if a lender forecloses or purchases real property at the foreclosure sale or trustee’s sale, and intends to accept an offer to sell the real property for an amount less than the amount of the debt, the lender must afford the borrower a right of first refusal if:

  1. The real property is a single-family dwelling and the borrower was the owner of the real property;
  2. The borrower used the loan to purchase the real property; and
  3. The borrower occupied the real property continuously after obtaining the loan.

This means the long sought after cut in the principal is going to be possible. Now they say that is not going to happen as the borrower’s credit rating would be too bad to get a loan, but not really. If these owners had saved the mortgage that they did not pay for about 3 years and counting, they should have tens of thousands saved up and would be able to get a loan.

At any rate the way things are going 30% appreciation for homes priced below $300,000 in 2013 is very possible, prices will keep going up.

Las Vegas real estate market, home prices, April 2013

3 bills that WILL pass the Nevada Legislation that will influence the Las Vegas real estate market, especially Las Vegas housing market. Since offers on Las Vegas homes, condos, townhomes and land should be with the future market direction in mind, I have been following these bills very closely and now can tell you what will happen in the next 6 months to a year.

1: The big picture: I have repeatedly written that it is the policy of the US government to raise home prices all over the United States with blessing and full cooperation from all larger banks. The reason is that banks make much more money by not foreclosing on delinquent borrowers and foregoing the mortgage payments than by doing otherwise. Las Vegas homes appreciation last year has made up for at least 3-4 years of mortgage payments and then some.

It is noteworthy that banks have NOT challenged any laws that restrict or restrain foreclosing on homes yet in a court and they would have if it was to their benefit. As one the Realtor Association legislation committee members said, you can NOT force banks to foreclose and if all laws that restrict them from foreclosing were removed tomorrow, the chances are that foreclosure numbers would stay the same.

Even the meaningless median home price which is at least 3 months behind today’s sold comps, let alone how much it takes to buy a home now, show 30% appreciation from last year and for homes below $200k it is far more than that.

About 41,000 residential units have been sold in the Las Vegas metro in the last 12 months and prices started rocketing up last March. Now, we have more than 700,000 residential units in Las Vegas and all these units have increased in prices because less than 10% of all units have been sold at higher prices last year. You need to understand that the US government is creating billions of dollars in wealth from thin air.

I am astonished by their awesome power in market manipulation (highly illegal if government and banks were not involved) and results they are getting. It truly takes amazing power to create artificial shortage of homes in state after state in order to raise prices but these guys are doing it as we speak. Additionally, no one is unhappy about this other than Realtors, mortgage officers and loss mitigation companies, and politicians couldn’t care LESS about them.

A bill called “Nevada home owners bill of rights” has unanimously passed the Nevada senate. The bill is modeled after the CA Homeowner Bill of Rights – which when enacted in January 2013 resulted in thousands of properties in the short sale process canceled and has significantly slowed down foreclosure filings in the Golden State.

I will discuss these 3 bills in a series of blog posts that I am starting on Las Vegas real estate and housing market for summer, 2013 which is almost up on us.

Las Vegas home prices are rocketing up again, February, 2013

Las Vegas real estate market, February, 2013 will show rising prices in all sectors, especially luxury condos and high rise condos since rocketing home prices are spreading to other sectors.

Records will show that homes currently selling in Las Vegas and have accepted offers in February, 2013 are selling for at least 10% higher than January, 1st, 2013 as non-distressed Las Vegas homes for sale listings beat short sales by about 3-4 to 1. Non-distressed listings are priced at least 15% higher than distressed properties and generally in better condition. Last month non-distressed sales comprised more than 50% of the total sales. And if thing do NOT change, we will see 25% or higher price appreciation by the end of year for 2013. Las Vegas high rise condos, condos and commercial real estate are also experiencing price appreciation but NOT as much as Las Vegas homes.

On January 11, 2011 I wrote “We are a couple of years away from sharp recovery in Las Vegas real estate and when it arrives it will not be linear”.

In May, 2011 blog post Why you should invest in Las Vegas real estate in 2011 I wrote “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”. Well congratulations if you bought a home in 2010-2011 you are darn Einstein.

In April, 2012 I wrote Las Vegas homes have appreciated more than 10% in 2012 “In the last blog I wrote that despite “Las Vegas real estate experts” prediction of more than a 10% price drop in 2012, I said the prices will increase more than 10% in 2012, it already did and is on the way to 20% appreciation.” And others were still saying that prices for 2012 were going to be down by 10%.

The thing I love about blogging is that I have a written time stamped record of what I have written about when it is time to gloat, however I am not gloating because being right meant that I have not been able to get more than a couple offers accepted each month in 2013 and that is bad.

The reason that I have been more accurate than any other so called Las Vegas real estate experts is that:

 I check all listings priced below 250K in about 50% of Greater Las Vegas metro the day after they are published in the Las Vegas MLS. I also check all MLS listings that have a price change or fell out of escrow. I also carefully track sold prices. Not the stupid median price but comparable homes. For example how much a home that sold for $100K in January, 2012 is selling for now and I tell you, about 140-$150K, which is about double the median price gain currently discussed in the news.

I saw an un-approved Las Vegas short sale home with 2 mortgages that was priced at about $180,000 while the current market value for this home would be no more than $152-$153k as calculated by me.

I thought to myself, this listing is not going to get an offer for while. When I checked back on it in 4 hours, per listing agent it had 2 cash offers. Even if the winning cash offers is at $170,000, that would be a 12% increase from the highest market value and at $180K it is an 18% increase. Please note that the highest sold direct comp for this home is $140,000.

Based on my observation of current home prices and market activity we will see at least a 20% price appreciation from October 2012.

However you will NOT see this until May, 2013 since it takes 3-5 months for homes with accepted offers in February to affect the median prices published in news outlets as it takes 1-2 months for the deal to close and another month for sold prices to start influencing the median price.

88 offers in 7 days for Las Vegas home for sale. Feb, 2013

88 offers in 7 days for Las Vegas home for sale. Feb, 2013

Las Vegas homes and condos for sale are still very inexpensive due to very deep discounts that ended in March, 2012 and low interest rates. If all homes in Las Vegas were sold to owner occupiers, we would have room for another 30%-40% in price hikes from the current market prices to make mortgage payments on a home more in line to rent paid for the same home. At that point Las Vegas real estate investors will get an estimated (negative-0%) net return on their money after expenses, just like buying a home in San Francisco. However, keep in mind that more than 50% of homes in Las Vegas are sold to real estate investors and losing these buyers will severely affect residential real estate prices.

Las Vegas homes values have greatly risen in 2012, especially in the last 6 months. However, if price hikes are calculated as a percentage, then cheaper homes have had the highest price hikes, for example homes purchased in 2011 for $70K are selling for about $110K-$120K which is 57%-71% higher than a year ago. Same has NOT happened for $200,000 homes as they are not selling for $300K or more. So cheaper homes are no longer the way to go as more expensive homes (say $200K home) have more room to appreciate than a home listed for $125K.

Another reason to buy more expensive homes ($200K or higher) is fierce competition to buy cheaper homes and below are examples.

I was going to advise making a $110,000 offer for a home with the asking price of $100,000 with estimated cash on cash return of 7.8% after property tax and HOA fee based on MLS rental comps. When I called the listing agent I was told that I can make any offer that I want but may want to save me and my client some time if my offer is not over $140K cash. This is totally crazy and awfully disheartening in the current Las Vegas real estate market as I would never ever offer $140K for this home now.

I check out all home listings below $250K in about 50% of the Las Vegas Valley and have many investors who want to buy now and in the last 2 weeks I have only e-mailed 2 listings because there is nothing priced right for our investors. While we have been and are currently needing inventory HUD is selling notes at very significant discounts to very, very rich people. Following is from an article in theStreet web-site about who is going to get homes at prices that an average investor in NOT even allowed to dream about:

“You and I will not be allowed to participate. These investors will come from the private-equity and hedge-fund community, Goldman Sachs and its derivatives, as well as foreign sovereign wealth funds that can bring a billion dollars or more to each transaction.

And more from my good friend the President of Greater Las Vegas association of Realtors Dave Tina:

“Home buyers and real estate professionals here and in other parts of the country have been complaining for months that Fannie Mae has been responding to their offers to buy a home by asking upward of $40,000 more for the home than an appraiser said it is worth. This situation generally involves short sales, which occur when a lender agrees to sell a property for less than what the borrower owes on the mortgage.

This is significant in Southern Nevada, where the housing supply is very tight and short sales now make up nearly half of all existing home sales.” Source Las Vegas RJ, 2/13/13

Today (actually a few days ago as I added to the article) I saw a listing for a foreclosure or bank owned Las Vegas home that had 88 offers in 7 days, this listing is currently under contract.

Please click the link below to see listing.

04-SFR Brochure (Medium) View

There is nothing special about this home except that it is priced a little below our current market and not 30% over it as the majority of current listings are priced at. However, the winning offer will be at least $20K over listing price. This home rents for about $1200 for an estimated cash on cash return of  9%  after HOA fee and property tax if sold at listing price and will go for at least $20,000-30,000 more which kills the heck out of cash on cash return.

In another instance a bank is pre-approving a Las Vegas short sale home at $93 per square foot while 3 out of 4 comparables with accepted offers in July and August are at $62-$67 per square foot and the highest comp is at $76 per square foot.

Given that Fannie Mae and Freddie Mac have insured and have a say in millions of all homes that have been financed and are listed as short sales, they are trying to raise prices through brute force while creating severe inventory shortage. If this is not market manipulation (highly illegal) I don’t know what the heck is and I am not a lawyer.

Given that more than 50% of homes in Las Vegas are purchased by buyers who want to invest in Las Vegas real estate, additional 20%-30% price hikes will eliminate any positive return on investment after expenses and that will result in Las  Vegas real estate investors finding other investments and that time Las Vegas residential real estate will lose more than 50% of its buyers which will be the start of wild price fluctuations that no one wants and will be bad for Las Vegas. But these highly paid, darn cowboys (bankers) are too stupid to see it. These are the same geniuses that caused the recent great recession, but they will never learn.

Las Vegas real estate market, 2013 forecast, conclusion

Las Vegas real estate market, 2013 prediction part 1

Las Vegas real estate market, homes, condos prices keep raising 

I have discussed the current Las Vegas real estate market and why there is such a feeding frenzy on Las Vegas homes and condos by Las Vegas real estate investors. I also stated that we have thousands of severely under water homes that have to be disposed of. How these homes are disposed of will decide the Las Vegas real estate market in 2013. The other factor is resistance to price hikes on the part of buyers who want to invest in Las Vegas real estate and there is no sign of it at this time.

News organizations are reporting that we have 70,000 homes and condos that are severely under water which have to change owners (I didn’t say get foreclosed on), let’s give it to them and say we have 70,000 homes that are good candidates for foreclosure and due to free market forces; this will force price cuts next year. What free market forces? We ain’t got any!!

Las Vegas residential real estate market in 2013 depends on how these highly distressed homes will be disposed of and at what price point.

Las Vegas real estate market is tightly controlled by 5-6 banks, Fannie Mae and Bank of America by far the biggest and then Freddie Mac, Chase, Wells Fargo and HUD homes. They control what happens to these properties. More importantly, it is these banks that decide Las Vegas short sales homes and condos  pricing also, and banks are pricing pre-approved short sales at the top of the comparable or higher, including non-distressed sales that usually command 15%-20% higher prices than distressed properties. Keeping that in mind, let’s take a closer look

Of 70,000 or so highly distressed Las Vegas homes many will not make it to the retail market (retailed through being listed and sold on the Las Vegas MLS).

A significant portion of these highly distressed homes will be sold as short sales as is happening right now. Let’s pick a very low number and say only 20%-35% will be sold as short sales and I think this number will be much higher, probably 50% or more. Anyway, if 35% of 70,000 homes are sold as short sales, that leaves 45,000 homes.

Of these at least 10,000-15,000 will be sold through Las Vegas real estate note sales (which I have discussed in detail for commercial real estate) to big investors who could turn around and cut the principal for the borrower without the constraints that banks have to deal with. This is happening right now and our good Government has turned this matter over to a private company which has cut off real estate agents such as me from the process, while there is no one better to valuate these properties.

Trustee sale auction in Las Vegas is offering note sales on single family homes and condos lately, however do NOT try this on your own as it is even more complicated than buying foreclosed homes at that auction. I can help serious investors.

Banks have started renting back the home they took back from borrower through deed in lieu (borrower turn in the deed to the property to the bank in return for the bank giving home owner $3,000-$30,000 in “relocation” fee and forgiving special performance which means that the lender will forgive difference between the loan amount and net proceeds from the sale.

Let’s say 10,000 homes will be sold through note sales and that leaves us with 35,000 homes and condos that could be sold in the Trustee sale auction where the act of foreclosure takes place. At least 30% of 35,000 will be sold to the third parties ( at the moment it is 50%), who then either flip them at much higher prices or rent them so we are left with about 25,000 that will be sold back to the banks and eventually be marketed in Las Vegas MLS where they can directly affect home prices.

The future of Las Vegas home pricing depends on how quickly banks sell these homes through Las Vegas MLS and more importantly how they price them. Do you really think that banks will be listing 3000 homes in the Las Vegas MLS each month? I don’t, as doing so will lead to 15%-20% price cuts in a year and banks know it. I truly think that it will be more like 1000 homes per month and in the Las Vegas hot real estate market; this should have very little to no adverse effect on pricing. However, I see no sign of 1000 homes that are going to be listed in Las Vegas MLS.

Additionally, it is forecasted that we will not see any significant increase in Las Vegas foreclosure numbers until spring 2013. If prices are up by another 10% by that time and given asking prices, especially pricing for bank owned Las Vegas homes, it is NOT improbable, then a 10% price cut for the remainder of 2013 will get you back to where we are today. Fannie Mae foreclosures which dominate our foreclosure listings right now are priced $15,000-$30,000 higher than the crazy prices in November and December 2012. HUD homes which are priced based on FHA appraisal are up sharply and I see this repeating with the few new bank owned listings by Bank of America and Wells Fargo.


In the last 3 blog posts about Las Vegas real estate market for this year I have explained in detail what I think will happen to Las Vegas real estate market, I do not have a crystal ball and all these are highly educated guesses and I may be wrong. If nothing changes we will be looking at least at 15%-20% price appreciation. If things change, I have no idea what will happen after March, 2013.


Las Vegas real estate market, 2013, homes, condos prices keep raising

Las Vegas real estate market is manipulated by outside factors to a degree that free market forces have very little influence on the current Las Vegas housing market as I have explained in the last article. Las Vegas homes for sale prices have been appreciating rapidly in the last 6 months and there is no end in sight unless one of 2 things happens.

1: We need a few thousand homes listed in the Las Vegas MLS that are priced right to stop the spiraling up prices let alone decrease prices and I see no sign that this will be done in the next 3 months and have no idea what will happen after March, 2013.

2: Las Vegas home buyers, especially investors resist higher prices and I see no sign of this in the next 3 months either. Homes that are priced at today’s market pricing go under contract within 2-3 days with many offers, usually above (sometimes way above) list price and more importantly direct sold comps.

There are 2 reasons for the feeding frenzy on Las Vegas residential real estate by investors who want to invest in Las Vegas real estate.

A: Quickly rising prices which have accelerated in the last few months. Investors who know nothing about cash flow or rent-ability factor buy Las Vegas homes, condos and town homes in hopes of further appreciation, some of these investors have paid abnormally high prices for their home and will be losers. For example in a sub-division all comparables are in $50-$60 per square foot range and then one was sold for $90 per square foot. Las Vegas MLS is full of such deals.

2: Even at current prices I am finding good homes, in great investment locations that provide the investor with estimated 7.5%-9% cash on cash return on investment after HOA fee and property tax based MLS rental comps. One can deduct 2%-3% from this number to arrive at an estimation of net cash on cash return after vacancy, repairs, insurance and other expenses. A Las Vegas real estate investor can buy a home; get 4%-6% estimated net cash on cash return on the money with the possibility of additional double digit gain in 3-5 years and many investors cannot do any better worldwide. This is the reason for the feeding frenzy and why we have had clients from 6 continents who have invested in Las Vegas real estate. At the moment I do not see this ending soon.

There is no such a thing as a median priced Las Vegas home that rents for the median rental price and has median vacancy before being rented and makes median cash on cash return on investment.

In any market condition there are good deals and bad deals. For example if good deals and bad deals had a median price, those investors who purchased a home in June and July, 2012 at 50%-60% or higher prices from 2011 prices lose, regardless of Las Vegas real estate market conditions and those who got a great deal in January-late April, 2012 or before are winners, that is that.

I had a long talk with a prospective Las Vegas real estate investor about the Las Vegas real estate market and he along with many others was trying to time the market. We are currently way past the bottom of the market but even though I was the first to tell you about our appreciating market, last year, I did not know the magnitude of price hikes for a couple months until after they happened.

However, I have written that we have thousands of severely under water homes that have to change hands unless lenders cut the principal by more than 50%. The big question is how these homes will affect the future Las Vegas real estate market.

I will discuss this in the next blog post.

Las Vegas real estate market, 2013 prediction part 1

It must be made abundantly clear that Las Vegas real estate market has nothing to do with free market or free market forces. Our current real estate market is artificial, man made and as such it is impossible to do a prediction on Las Vegas real estate market in 2013.

If nothing changes we may be looking at 20% or more appreciation for homes priced below $250,000 in 2013 as price appreciation for Las Vegas homes have accelerated in the third and fourth quarter of 2012. Las Vegas home prices will not stabilize until there is resistance to rising prices on the buyer’s side and there is no sign of it as of now. Las Vegas residential real estate that are priced low, or at current market prices sell for much more than asking price with many offers.

If things change, depending on how they change we may be looking at same, stabilized pricing or price cut from current levels.

Las Vegas has thousands of homes with delinquent mortgages where  home owners who have been living mortgage free in their home for more than 2 years, have no motive to short sale their severely under water homes. In a normal market threat of foreclosure would motivate these home owners to seriously market their home as Las Vegas short sales, right now Las Vegas MLS is full of no show, highly over priced short sales that are marketed just to prevent foreclosure. A good example is an agent who has put his own no-show home in Las Vegas MLS at twice the price of comparables; he knows that his home has zero chance of selling.

All I know is that something has got to give as this situation is not sustainable, but who am I to talk, even though I was the only one predicting more than 10% appreciation for 2012 ( all others said 10% depreciation) in my wildest dreams could I see today’s real estate market. But what drives today’s market is that good deals can still be found, and we are finding them. I can still find good homes in very good rental sub-divisions that offer cash on cash returns of 7.5%-9.5% or more after HOA fee and property tax based on Las Vegas rental comps with very good upside.

But these homes are hard to find and harder to get our offers accepted since we offer current market prices and lose to unreasonable offers made on other buyer’s behalf. Majority of current asking price are highly speculative ($20K higher than current market prices) and I am not comfortable with these speculative prices.

I can tell you what will happen until March, 2013 and Median prices published in news organizations will keep rising until March, 2012 as sales prices for homes that are currently going under contract will show up in the median numbers for February and March, 2013. I have explained why in previous blog post. Additionally, this December has been exceptionally competitive and that leads me to think that January and February will be worst as they always are.

What happens after March, 2013 is unclear as Nevada Legislature will meet again and what they do about AB 284 will greatly influence Las Vegas real estate market. There is no hard news about our legislature going to do anything about this matter, but I have heard rumors that they may change “lenders have personal knowledge of mortgage” to “personally review mortgage” or something like that, thereby enabling banks to foreclose without fear of committing a felony.

Notice of trustee sales which is the last step before foreclosing on a property is too low to produce more than 300-450 bank owned homes per month and this number will not be enough to stop our increasing prices let alone decrease prices as the last few months have proved.

Keeping in mind that prices for homes priced below $150,000-$200,000 have increased by 35%-40% or more (I see homes that sold for $55 per square foot in December, 2011 selling for more than $85 per square foot) this has removed many homes from under water status and good deals in 2010 or later are no longer under water. Additional price hikes will remove more homes from under water status.

But imagine that banks start foreclosing in mass, then what will happen to 70,000 or so severely under water homes in Las Vegas and how will it affect Las Vegas real estate market.

I will discuss this in a future blog post

Las Vegas real estate market, November 2012

The first wave of the brand new tsunami of Las Vegas foreclosures has hit the shore of Las Vegas, Banks have foreclosed and took back a colossal 392 homes in October and are on the pace to take back another 300 homes in Greater Las Vegas in November. Las Vegas housing market reacted to the tsunami of foreclosures by trying to push prices up by 10%-20% from today’s peak prices by March, 2012.

After Nevada Supreme Court Decision to back the banks and ease process of foreclosures from some restriction imposed by AB 284 all news organizations were predicting 3000-4000 foreclosures per month however there is NO sign of any increase in foreclosure numbers.

Las Vegas real estate market for November 2012; inventory of single family Las Vegas homes for sale as of 11/19/2012 is 3881 which is down from last month number, and homes that are priced right get many, many offers in 3 days and go under contract.


Las Vegas homes for sale Number of homes Percentage of total homes for sale Median list price
Total 3881 100% $210,000
REO or foreclosures 383 10% $165,000
Short Sales 777 20% $168,000
Non-distressed or equity sale 2721 70% $220,000


And table below shows the median asking and sold prices for Las Vegas homes sold in October 2012 by type of home sold (Bank owned, short sales and non-distressed sales) plus the average sold prices for those homes.

Types of Las Vegas homes sold in September 2012 Las Vegas homes sold in September, 2012 Median Asking price Median sold price Average sold price
Total 2911 $140,000 $140,500 $173,500
REO or foreclosure homes 311 $134,500 $131,000 $153,000
Short sale homes 1380 $125,000 $127,000 $148,500
Non-distressed or equity sales homes 1220 $164,900 $160,000 $206,500


Pay attention to median asking and sold prices for bank owned Las Vegas homes, current median asking prices is $34,000 higher than median asking price for sold homes in October, 2012. As for short sales current median asking price is $41,000 higher than Median price for October home sales and non-distressed or equity sales median asking price is $60,000 higher than those sold in October. These numbers point to sharply increasing prices, NOT price cuts.

Above table clearly shows that Las Vegas homes are selling for plus, minus 3% of asking prices, it is NOT possible to lowball a distressed home in Vegas as the offer will go down in flames.

Next table shows homes sold in October, 2012 by the month in which the offer was accepted.

Number of homes sold Offer accepted in October, 2012 Offer accepted in September, 2012 Offer accepted in August, 2012 Offer accepted in July, 2012 Offer accepted in June, 2012
Las Vegas homes sold in October, 2012 2919 337 833 653 308 208
Median Price for Las Vegas homes sold in October, 2012 $140,000 $142,000 159,000 152,000 $140,000 $135,000
Las Vegas homes sold in September, 2012 2560 271 844 402 256
Median price for Las Vegas homes sold in September, 2012 $140,000 $138,000 155,500 150,000 $132,000


Above numbers should easily show the following facts

1: Prices keep going up and there is NO resistance to increasing prices from Las Vegas real estate investors and buyers as sold prices are within 3% of asking prices

2: Sales activity has not suffered, even with low inventory levels and shortage of distressed properties

3: There is no sign of the tsunami of foreclosures that Las Vegas real estate analysts have been predicting once a week for the last 3 years (wolf, wolf, wolf…3 years…wolf, wolf………) .

4: Although there is a big difference between median asking prices and sold prices in October and November, 2012, this is due to weakness of sold median prices for each month, if you look at accepted offers in October in September or August this difference shrinks to more realistic levels

I Have written repeatedly that those who did not buy in 2011 and foolishly tried to hit the market bottom will be very sorry they did not buy then, well those who bought before 2012 have been collecting rent for more than a year and have 30% or higher equity in their investment property.

Again, I repeatedly wrote in 2012, last on June that those who did not buy in 2012 will be very sorry they waited to buy in 2013, well prices have appreciated by at least 20%-25% and if things go the way they are, there will be another 20% price hike by March, 2013. I have a couple of investor who call me time to time asking me about the next bottom for Las Vegas real estate market as prices will go up like zig zag and not strait line. People, you missed the bottom by 30%-40% and you are still trying? Wow.  Sorry, I can’t help you.


Las Vegas real estate blog, including homes, condominiums, high-rise condos, land and commercial real estate, plus Las Vegas real estate news, investment properties and more