Slowing Down?

Maybe just a touch.

Data from April showed that pending home sales slowed from their feverish gains and rose less than expected.  Many experts believe that this is because of limited inventory. The buyers are still there for the homes, but there simply aren't enough homes to be sold. This is especially true for real estate markets like Las Vegas. Since Las Vegas still leads the nation in the percentage of homeowners who are underwater on their mortgage, there are large numbers of homes that simply can't be sold...more than 50% actually.  As a result, home buyers are being driven to new construction.  The sale of new construction homes continued to grow in April with gains of 2.3%. This represents an annualized pace of 454,000 homes and is the second fastest pace since July of 2008 according to the Commerce Department. 

“The housing market continues to squeak out gains from already very positive conditions,” said the NAR’s chief economist Lawrence Yun in a recent statement. “Because of inventory shortages, higher home sales will push up home values to the highest level in five years.”

Meanwhile, mortgage rates continue to creep up. According to Freddie Mac figures, the average rate for a 30-year fixed mortgage climbed to 3.81 percent last week, up from 3.59 percent the week before. Last November (2012), the rate had reached an all-time low of 3.31 percent.

Las Vegas Still Leads the Nation in Underwater Homes

A recent report reprinted in the Las Vegas Review Journal shows that Las Vegas, even after years of record setting foreclosures, still leads the nation in underwater homes.  Zillow's Negative Equity Report tracks homeowners' outstanding mortgage balances versus the value of their homes. Zillow's report confirms data released by real estate analysis firm CoreLogic which found that 52.4% of Las Vegas households currently owe more on their mortgages than their homes are worth.

The passage of Assembly Bill 284 may be partially to blame for this backlog of underwater homes. AB284 brought the Las Vegas foreclosure market to a screeching halt last year. Foreclosures dropped from more than 4000 per month to less than 100.  Banks have since found ways to re-initiate foreclosures, but still at nowhere near the pace they were before the passage of the controversial bill.  This has many analysts wondering what will flush out the supply of underwater properties if foreclosures remain sluggish.

The proclivity of negative equity is not equal throughout the Las Vegas valley. Pockets of exceptionally high rates of underwater homes exist along the 15 corridor from downtown up through North Las Vegas to the Nellis Air Force base as well as the northernmost portions of Centennial Hills.  As many as 74% of all homes are underwater in those areas. Rates are significantly better in other parts of the valley, most notably Anthem, Henderson, Green Valley and areas near Summerlin, with rates as low as 29% in Summerlin proper.

With an uncertain real estate market ahead of us in the short term, the best advice for many homeowners is to either refinance or list their home as a short sale.  Refinancing is extremely attractive for many homeowners with home prices climbing sharply over the last six months and interest rates dropping to record lows. It is also the perfect time to take advantage of a short sale opportunity if your home is still underwater.  The government has extended the Mortgage Debt Relief Tax Forgiveness Act through 2013 and most experts agree it is unlikely that it will be extended further.

If you are interested in either refinancing or listing your home as a short sale, contact me for more information.

Up, Up, And Away...Las Vegas Home Prices Show No Signs Of Slowing Down

The Las Vegas housing market continued its white hot rise as the sales volume of new construction rose in April to the second highest levels since the summer of 2008, which was in the midst of the housing bubble boom.  Meanwhile, the median home price for new construction hit a record high. Both January and April had the fastest sales rate (lowest days on market) since July of 2008. The median home price for houses sold in April was up to $271,600...this is the highest mark since the government began keeping these records in 1993.

This is a whole lot of positive data, and many people are taking these indicators to be signs that the housing market is recovering aggressively in Las Vegas.  This certainly appears to be the case.  But, at the risk of being the only downer in the room, I'd like to remind everyone that the recent highs in Las Vegas real estate isn't based on particularly wonderful economic growth, either locally or nationally.  Unemployment is still way too high.  The Fed is hinting that quantitative easing might be ending soon, but it hasn't ended yet.  Cities like North Las Vegas are still teetering on the brink of bankruptcy.  And, of course, let's not forget the elephant in the room...AB 284. The Nevada Assembly drastically altered the Las Vegas housing market when they passed a bill that virtually ended foreclosures in the Las Vegas valley. The assembly members might be looking like heroes right about now.  But it has been my experience that anything that alters the natural flow of the economy eventually has its consequences and they are rarely pleasant.  I am seriously concerned as to whether or not the growth in the Las Vegas housing market can be sustained.  I would caution potential investors to focus on cash flow, cash flow, cash flow.  If you make sure that you purchase a property with positive cash flow right out of the gate, you will be insulated against the further twists and turns of a potentially fickle Las Vegas housing market.

VIP Realty Expands Property Management Division

Sometimes I get so caught up discussing current market conditions and trends in the Las Vegas real estate market, or analyzing the economy as a whole and it's effect on home prices, that I forget to notify my readers about new developments within my business.  Many of you probably already know that several months ago I formed my own brokerage headquartered in a beautiful new office space in Northwest Las Vegas. VIP Realty, which stands for Vegas International Properties, was formed to cater specifically to the needs of our investor clients.  Although we do offer services to traditional home buyers and sellers, 90% of our business is from investors. Most of our investors are from out of town with many from out of the country.  In the last year we have been privileged to help broker deals for clients from Canada, China, Europe and Central America. Because I am an investor myself, I understand what investors need and how to find a property best suited to their goals.

One of the major components that we have found appeals to our out of town clients is our in house property management division. We have worked hard and expanding this division over the last year and we now manage over 100 properties for our clients. By performing our property management with our own hand picked team, we are able to insure quality and keep costs down. We realize that investors want to be able to trust that their properties are being maintained at a high standard.  They also need a property management service that constantly looks out for their best interests by making sure that rents are paid on time and that vacancies and delinquencies are dealt with quickly, efficiently, and effectively.

Our property management division is able to provide this superior service at a reasonable price.  Our investors are able to come to us for the whole package when it comes to investing in Las Vegas real estate.  We will help them find the best investment property, analyze cash flow, find and place a tenant, maintain the property, and deal with any vacancies. One of the major reasons I decided to step out and start my own brokerage is because I wanted to offer this complete service package to my clients according the vision I have had for several years.  I would love to tell you more about our services.  Please don't hesitate to call me if you are considering investing in Las Vegas real estate.

VIP Realty Offers Top Notch Support Services for a Fraction of the Price

Sometimes I get so busy talking about the state of the Las Vegas real estate market and discussing the ins and outs of successful real estate investing, that I forget to update my readers on more mundane matters...like our new brand name and Northwest Office. As many of you know, several months ago I established by own brokerage in Northwest Las Vegas...VIP Realty.  VIP stands for Vegas International Properties.  The name fits our business model to a "T." We continue to cater mostly to investors, many of whom are from out of town or even out of the country.  We have helped investors from Canada, China, Europe, and other locales purchase investment properties in Las Vegas.

We also have a full service property management division in house that is able to create truly turn key investment opportunities for our clients. We currently manage over 100 properties for our clients, and by doing so we are able to insure quality and keep costs to a minimum.  Because I am an active real estate investor myself, I know what real estate investors need in a property management service.  They want to know that there properties will be well cared for and maintained to a high standard, they want help attracting and keeping high quality tenants, and they want to know that their rents are collected efficiently, promptly, and accurately. We take care of all these items with top notch customer service.  We also make sure that when vacancies or delinquencies do occur, they are handled effectively and quickly.

If you are looking for a property management company focused on the specific needs of investors in Las Vegas real estate, give me a call directly.  I will put you in touch with one of our experienced property managers.

Real Estate Investors Search for New Opportunities

Have you tried to purchase a foreclosure or REO in Las Vegas lately?  If you have, you have most likely experienced a multiple offer situation with a final selling price much higher than original list price.  Many investors have come to me terribly frustrated with the situation.  It can seem nearly impossible to buy investment property in Las Vegas these days at a reasonable price.  Nearly impossible maybe...but not completely impossible.

I have worked as a realtor in Las Vegas for almost 10 years.  I came before the boom days, and I stayed through the bubble burst. My clients have always been investors.  In fact, investors account for 95% of my sales volume for the last 5 years. I have helped my clients find solid, cash flowing investment properties throughout all the chaos of the Las Vegas real estate market. I've found plenty of deals when the market was hot, when it was cold, and everywhere in between.

The secret is adaptation.  I like to draw the analogy of the chameleon.  In order to succeed in investment real estate, like most business opportunities, you have to be a chameleon of sorts.  You adopt one strategy for as long as it works, and then when it doesn't you find another.  If you aren't willing or able to adapt, you fail.  Especially in Las Vegas...especially with real estate.

So if you are looking for someone to help you invest in the Las Vegas real estate market, I'd love to help.  I'm willing to put in the effort, and I have a huge track record of success.  Plus I won't lead you down the wrong path. I'll tell it to you straight.  That's what I'm famous for.  People don't always like my outlook on the market, because I don't sugar coat it.  Check out my blog posts and press releases for the last five years and you'll see what I mean.  Las Vegas real estate is tricky...but it is extremely profitable.  I'd love to show you how.