Las Vegas Housing Ceases To Be A Drag

It seems that the nationwide housing market has finally ceased being a drag on the overall economy and is now actually a source of strength.  According to a recent article in USA Today, Mark Zandi, chief economist for Moody’s Analytics, no reports that “housing is finally contributing to the economy’s growth instead of pulling it down.”  Mark expects the housing sector to account for approximately one fifth of the U.S. economy’s overall growth in 2013.  This is a stark contrast to 2009 when the housing industry actually subtracted one full percentage point from the country’s GDP growth.  It is not unusual, however, for the housing market to lead the overall economy out of recessions, which is why the housing recovery is particularly good news for the broader economic outlook moving forward into 2013 and beyond.

David Crowe, chief economist for the National Association of Home Builders, notes that with rising prices and more new home construction, “the recovery will start to feel more normal.”  New home construction is especially important to economic stimulation because it generates sales outside of the sale of the home itself as new home buyers purchase furniture, appliances and other hard goods.  

The Las Vegas market is one of the regional markets leading the country’s housing recovery.  Las Vegas’ median home price has risen steadily for the last 9 months in a row.  Simultaneously, the supply of REOs and other reasonably priced properties has slowed to a trickle, creating even more demand for an already strong sellers’ market.  New home starts are also up year over year in the Las Vegas valley.

Announcing “The Las Vegas Real Estate Reality Hour” With Glenn Plantone

Many of my clients already know that before I embarked on my career in real estate, I spent some time behind the microphone working as a radio personality in California.  I’m excited to be returning to the recording booth, this time as the on air host for “The Las Vegas Real Estate Reality Hour.”  The show will be airing Saturdays, from 1-2pm on KLAV 1230 AM Radio - The Talk of Las Vegas.  

I was approached last year by a production group looking to put together an informative real estate talk hour based in Las Vegas.  This group produces shows nationally for several leading markets and was looking to expand to Las Vegas.  I was one of several potential hosts approached as candidates and am excited to be the “last man standing.”

The tag line for our new show is “We tell it like it is.”  Anyone who has read my news articles or blog posts will realize that this has always been my outlook when it comes to discussing the real estate market.  I know that my primary responsibility to my investor clients is to tell them the truth about the Las Vegas real estate market (and any other market they may be considering.)  My clients value my honesty because I always strive to “tell it like it is.”

I’m looking forward to building this radio show from the ground up.  I will be seeking out knowledgeable, interesting guests to visit with my in the studio and give their impressions of current market trends.  We will tackle head on hot button issues like possible revisions to AB284 and the redevelopment of downtown Las Vegas.  We also have a live studio line set-up for listeners to call in and voice their own opinions. (866) 820-5528.  We will have past shows available for streaming from our website: www.teamplantone.com.

If you, or someone you know, might be interested in appearing on “The Las Vegas Real Estate Reality Hour” please send me and email with details on your background and potential discussion items.    

Calling The Bottom - Do I Get A Prize?

Earlier this week, I opened up the Las Vegas Review Journal and ready Hubble Smith’s article “Housing Crawling Off ‘Bottom.’”  In the article, Dennis Smith, housing analyst and president of Las Vegas-based Home Builders Research, was quoted as saying, “It’s obvious that the bottom of the recent vicious housing cycle that has gripped Las Vegas was in 2011.” (Emphasis is mine.)  2011...good to know now, but it would have been a lot more useful to have that information in 2011, or even 2010.  But who could have known?  Well, my investor clients for one, or anyone else that read my press releases and blog posts in 2010 and 2011!

On December 28, 2010, I wrote in my article “Real Estate Investing in Las Vegas Returns to Historic Trend,” “Now that the average trend line has been reached, it seems unlikely that property prices will drop much further.”  Throughout 2011, as local reporters were still lamenting the fall of home prices in the Las Vegas valley, I was warning my investors that the market was heating up and competition for available homes was reaching record levels.  Repeatedly I urged my clients to “buy now” or risk missing the upswing that was beginning.  Some chose to remain on the sidelines, worried about further potential losses, but many, many clients dove in.  They are very glad they did.

As the recent LVRJ article reports, “The median resale price (of a home in Las Vegas) was $139,000, up from $133,000 in November and the 10th consecutive monthly increase.  It’s up $29,000, or 27 percent, from a year ago.”  Not a bad yearly return for someone who purchased an investment property in 2011.  If you missed this opportunity, don’t despair, other opportunities will continue to appear.  But you might want to read my blog regularly.  After all, I don’t think I’m getting a prize for calling the bottom of the market, but if you read my reports, you might find a prize of your own.

Las Vegas Short Sales Continue to Rise As Banks Avoid Foreclosures

We have repeatedly discussed the various effects of the passage of Nevada Assembly Bill 284 on the Las Vegas real estate market.  The most notable has surely been the rapid decline in foreclosures as banks struggle to comply with the mountain of red tape placed on the foreclosure process by AB284, including the infamous “personal knowledge” making it a felony for bank employees to sign foreclosure documents if they do not have personal knowledge of who owns the promissory note.  Another result of this bill has been a steady rise in short sales.  Ticor Title of Nevada reported that 47.1% of all December home closings were short sales, compared to only 9.6% for REOs, or post-foreclosure bank owned properties.  This is a complete reversal of sales trends in Las Vegas only two years ago, when the majority of closings were REOs and banks were still very hesitant to approve short sales.

Many experts are now speculating on the possible effects of AB284 on the “shadow inventory” of foreclosures that have been widely rumored to exist in the Las Vegas valley.  Some, like Zolt Szorenyi, CEO of Lenders Clearing House LV, believe that the shadow inventory may never materialize, “AB 284 is not going away. That means banks are not going to come back with shadow inventory. It's not going to happen.”  Szorenyi continues, "The new phenomenon is there is no shadow inventory. They're selling notes to Condor (Capital) and doing short sales."  On the other hand, Travis Olsen, president of Loan Resolution Corp., a Scottsdale, AZ based company specializing in distressed mortgages and real estate, believes that there are more foreclosures on the horizon for Las Vegas.  He says, “I think the vanishing inventory of foreclosures is due in part to the National Mortgage Settlement and you're seeing a temporary decline in foreclosures.  That said, there are more defaults and foreclosures to come. We're not out of the woods yet. We'll continue to feel pain for the next couple of years, though increases in prices will help ease that pain.”

There is some question as to whether AB 284 will be modified in the upcoming legislative session, and, if so, how substantially.  Lending institutions and professional real estate organizations are pushing for changes to the bill that they say has the potential to create another bubble-like real estate environment in the Las Vegas market, where the median home price has already risen over 20% in the last year on what  experts believe to be “artificially” low levels of supply.  It will be interesting to watch what effect, if any, this lobby will have on the Nevada Assembly and if any modifications to AB284 will be forthcoming.

Mortgage Debt Forgiveness Act Extended Through 2013

On January 1st, Congress passed the American Taxpayer Relief Act of 2012.  Part of this Act is a one year extension for the Mortgage Forgiveness Debt Relief Act.  Created in 2007, this act granted exemption from income tax to homeowners who had all or a portion of their mortgage debt on a primary residence forgiven through a waiver of deficiency as part of a short sale or foreclosure.  Without the act, the forgiveness of mortgage debt is called debt discharge income and is treated similarly to ordinary income by the IRS.  

Experts worried that if the Mortgage Debt Forgiveness Act, originally passed as part of the Bush tax cuts, was not extended that homeowners might elect to walk away from their upside down properties rather than seeking loan modifications, short sales, or other alternatives to foreclosure.  This could have spelled trouble for the fledgling housing recovery that has begun to take shape in Las Vegas and across the nation.  Las Vegas could have been especially vulnerable to en masse foreclosures, considering the fact that, to spite the steady rise of median home prices over the last year, more than 60% of all Las Vegas homeowners are still underwater.

This one-year extension provides a unique opportunity for these Las Vegas homeowners.  Short sales have become particularly attractive over the last year in Las Vegas.  Home prices have risen steadily for over a year, bringing current home valuations much closer to the mortgage balances owed by those who bought at the height of the market in 2005-2007.  This may make banks more willing to negotiate short sales for these owners as their potential loss margin narrows.

If you are interested in listing your home for short sale here in Las Vegas call Team Plantone for a free consultation to determine your options.

Sellers' Market Persists in Las Vegas

The sellers’ market that prevails in Las Vegas real estate at the moment
shows no signs of slowing down.  The median home price in Las Vegas
continues to rise and, although foreclosures have crept back up from
their low point last year, the oft rumored glut of foreclosures, known
as shadow inventory, has yet to make an appearance.  Las Vegas home
buyers even persevered through the holidays and cold temperatures
trouncing last year’s marks for home sales during the usually quiet
holiday period.

The median price of a resale home in Las Vegas for November, 2012 was
$133,000.  This betters the mark for November of last year ($114,000) by
almost 17%.  New home sales also fared well.  The median price of a new
home in Las Vegas was $219,285 in November, 2012, up 7.4% from a year
earlier ($204,064.)  Las Vegas also plowed right through the dormant
period that normally cuts home sales in the months of November and
December by approximately 50%.  Instead, Las Vegas home sales were up
39% from the holiday period last year with an average of 600 homes being
sold each month.

All-in-all, the Las Vegas real estate market is continuing to enjoy steady growth
as the pressures of demand exceed the supply.  Zillow recently ranked
Las Vegas as the #4 Sellers’ Market in the country.  This represents a
large departure from the title of “Foreclosure Capital of the Nation”,
which Las Vegas held for four consecutive years.