Economic and Housing Outlooks Brighten According to Fannie Mae Analysis Group

The headline is from Rismedia whose article starts out, "RISMEDIA, December 28, 2010—Improvements in consumer spending and consumer confidence, increased demand for goods and services, and falling unemployment claims are all positive factors for a brighter outlook as we move into 2011, according to the December 2010 Economic Outlook released today by Fannie Mae's (OTC Bulletin Board: FNMA)"

Did they read my previous post? Apparently not.
Nor did they notice "Survey Shows Consumer Confidence Slips in December
ABC News - Anne D'Innocenzio" and similar articles all over Google News this AM.

What I do know is that it is hard to get a house under $120,000 into contract unless you have cash and out bid the other cash investors. Some homes have a 30 day grace period for owner-occupiers only, but you still have to get the bank to agree to your lowball offer. Yes, everybody wants to lowball the bank.

The problem there is, those people who have learned you can't be ridiculous generally outbid the people who are still in denial and think it is a buyer's market.
As has been mentioned, it is a Banker's market and the rules of common sense, not to mention the Statute of Frauds (that requires contracts to be in a SIGNED writing to be enforceable), and the time honored definitions of what is or is not a "counter-offer" do not seem to apply when bank asset managers are involved. Don't expect a counter offer if you bid low. Expect a notice that they have multiple offers and everybody has to make their highest and best bid in order to play.
Multiple can mean two, and the other offer may be lower than you. The bank just wants to see how far you may go in bidding against yourself. Lovely.

You can win this battle but it may take time. Call me when you are ready to start.

Double Dip Warning

http://blogs.forbes.com/afontevecchia/2010/12/28/double-dip-in-housing-almost-here-according-to-case-shiller-index/

The link above will take you to an article that may be good news for investors waiting to buy,
and less than good news for sellers waiting to sell. It is somebody's opinion and not pre-ordained,
but it is worth considering.
Truly,
Grant

Las Vegas November Real Estate Stats

The listed versus sold ratio for 2010 is down slightly from last year standing at 59%, still very respectable. For 2009 the ratio wrapped up at 65%. Both years are well above the three previous years.

We should note that November home sales stood at 2777 units, well above October’s 2599, and just below the 2800 levels of August and September. November traditionally falls below October and it is December that can show an uptick. So, at the moment, sales are strong.

Resale home Listings at 3973 are below at the lowest level for the year and the lowest in November in the past 5 years. Listings were at 5589 in October. This could be the result of the recent foreclosure moratorium putting a dip in the number of homes coming to market.

For the moment, this could an opportunity for traditional sellers. Many buyers are tired of dealing with REO's and losing short sale transactions to foreclosure after investing months of time.

Unless we have huge December sales, we should end 2010 with less than the 47,000 closings of all types that we did in 2009. That number, 47K, was well above 2006-7-8.
Also, for 2010, the average price of a Las Vegas home is standing at about $167,000, down about $3000 from 2009.

What does this mean? I think it means “not much change yet.”
If Freddie and Fannie begin to force banks to buy back the bad loans, or if Congress takes away all or part of the mortgage interest tax deduction, then we will see what we will see.
What do you think?
Happy Holidays.
Grant

As We Proceed with Caution

Dear Friends,
What can I tell you?
Buy stocks? (Gary Shilling, president of the economic research firm A. Gary Shilling & Co. Photographer: Jonathan Fickies/Bloomberg
Nov. 11 (Bloomberg)) ... Gary Shilling, who predicted the U.S. housing collapse, says the stock market is overvalued and foresees a “significant” selloff within a year as the Federal Reserve fails to stimulate economic growth.

Buy Gold? Then read articles like this from Weekend Investor
Nov. 12, 2010, 5:20 p.m. EST :
"Why gold is a bad investment ...
Precious metal lures susceptible buyers into a Midas crush." Gold doesn't pay interest and as the article says, "it is (only) going up because people are buying it." Sounds oddly like real estate in Las Vegas in 2007.
We may already have a gold bubble.

What are new home builders saying? Why, they say stuff like this from an email today:
PICK TWO! Pick Two!
Purchase and close escrow on your new home by 1/31/2011 and receive TWO FREE GIFTS from (WXYZ) Homes. Pick two of the following gift packages (up to a total value of $5,000):
Home Furniture Package
Shopping Spree
Moving Expenses Paid
Deferred Mortgage Payment
Landscape Package

Does this sound a little like the discount lunch special? They seem to shout,
"We're not desperate. We're not desperate. We're not scared and there is no buggy man!"

Then, why on earth would they offer incentives like that?
Try this one from Nuwire Weekly today: On trimming the deficit from "...the bipartisan commission in February to provide options on overhauling the tax system and reducing the national deficit. According to a November report, one option excludes citizens from deducting interest payments on second residences, home equity loans or mortgages over $500,000. Other options would be to tax dividends and capital gains at the ordinary rates."

Dark times of biblical proportions. Hey, sinner man, where's your money going to run to? Run to the rock? To the ocean? Or just to interest on the deficit.

From the lack of commitment in real estate (there is still interest, like fishing with hook and line and watching the cork bob up and down...)it would indicate that most people are opting to stay puy, stay liquid, and see what really happens when Congress changes hands...Change like we've seen before. As a Realtor, I am in favor of anything that drags this out forever ... not. The problem may be that those who usually take the long term view, see the low interest, the low prices, and streaks of blood in the streets spelling out the words "buy now", still can't make out the cold clear dawn of the usual upswing at the end of a cycle. Perhaps they worry, "this may not be cyclical this time."
And 2012 looms.
2013 never looked so good.

Crystal Ball is Cloudy

“The clear problem in the housing market today is not foreclosures, but negative equity; and as long as the focus remains on the symptom rather than the disease we will see little progress towards real solutions and this crisis will drag on for years to come," says Sean O’Toole, CEO and Founder of ForeclosureRadar.com.

“…80% of people who have a mortgage in Las Vegas are underwater. 16% are delinquent on their mortgage payments. Why …? Some cannot make their payments... but many others simply don’t want to continue making mortgage payments on a house that is worth only half of what they owe on it,” reports Kristy Black, Business Development, Fidelity National Title.

What does this mean for prices? I have been trying to get a handle on it and I think it means "don’t believe much of anything you read until after the election." The arrows on the sign posts are all pointing in different directions depending on the agenda of the writer.

I think Mr. O’Toole’s “drag on for years to come” statement might sum it up. Google News articles hint that we sales are up (start of recovery!) but prices are falling (no recovery yet!) and may continue to fall.

So, if you need to sell, the possible continued fall in prices makes NOW better than Later. And if you need a house, buy a house. Even if you wait, it’s always going to be something.
If you want to bet on lower prices and you can wait, then wait. Just call me when you are ready … and please share with me what made you pull the trigger. We all want to know!
My Magic Crystal 8-Ball is cloudy.

August Market Data - the Patient has a Pulse

In Las Vegas in August, the inventory of single family homes was climbing to about 5000 units … but it was still below one year ago and was also at it’s lowest August level in 5 years. The ratio of homes listed to homes sold in 2010 is 62%, second highest in 5 years, but still behind last year’s 67% - when, as a buyer, it was really hard to get into contract. In the same way, the number of single family homes closed is lagging behind last year. With four months to go in 2010, total sales have almost equaled the 5 year low of 2008 at almost 30,000 homes. And, the average sale price, at $168,000, is slightly below last year’s average and slightly below the 2010 high, both about $170,000. On the rental front, occupancy is at 82% which is better than the 76% average of 2009, but not quite as good as the previous three years.

So, what does it mean?

It’s like hurricane Igor still in the Atlantic. The experts say it should be turning one way or the other, but it is just continuing to slide along in the same direction with dire warnings posted well in advance.
Given this is an election year, I don’t look for any big news to be validated by the national media until after the elections.

On the local front, the House Team has sold each of their three traditional listings this summer in less than a week, two of them above list price! The reason, we believe, is buyer frustration with banks and lack of bank approval on short sales. If you need to sell, sooner may be better. If the Bad News Bears come out again after November 2nd, it could hurt your sale price.

Vegas Sales fall in July but Sky does Not ...Yet

Not that I think prices couldn't fall some time in the future because of a large phantom inventory of foreclosures (They might), but the BADNEWS media making hay of the July drop in home sales to sell their newspapers doesn't tell the whole story.
*
In Las Vegas, one of the hardest hit markets in the US, the number of home closings fell from 3360 closings in June to 2948 in July.
*
That's a drop of 12% from June of this year and a drop of 21% from July one year ago, BUT June and July 2009 sales were some of our highest closing numbers on record - ever.
*
In Las Vegas, any time we sell more than 2900 homes a month, business is brisk. If, between the banks' mismanagement of the real estate industry they now control by default and the Media Bad-NEWS-Bears, a further drop in home prices is engineered, closing numbers in Vegas will go through the roof as cash investors swoop in
like vultures. But, should we hit 4000 sales in a month, and further drop in home prices could trigger that, I trust no one will note the increased sales volume.
*
Have I mentioned short sales? Yes, I have. When lots of people put short sales in contract and only 5-7% of them close, closing numbers are apt to dip. Added to the investors who have decided to wait to see if prices really do fall, plus the end of the home buyer tax credit, it is a wonder that Las Vegas closings are down only 12% from June, 1020.
*
It is not unusual for Las Vegas closings to dip in July and flatten out in August. If the drop becomes a trend over the next couple of months, that might be significant. Otherwise,..."Papers! Get yer Papers Here!"

Redfin Coming to a Las Vegas near You

I just began the interview process with Redfin (link below) to become one of their Realtors when the expand into Las Vegas. It looks like a great, transparent, client friendly program and the Realtors are kept in line through client performance ratings. As a heads-up to my clients, they may contact you to see what kin...d of service I provide. Please be kind. In the meantime, check them out!
Best wishes,
GH

Builders offer Buyer agents Incentives ... Again

Recently, by email, Lennar announced to me and other Las Vegas Realtors, $2500 Agent Bonus - for August Closings - 3.25% Interest Rate Available; Woodside advertised $12,500 commissions at Providence; Pardee Homes offered a $1,000 Design Studio credit to pass along to any client who purchases a Move-In Ready home at Riverstone; Pulte Homes - Fall-Out Inventory - 7% CO-OP; and Woodside had 4 Percent Co-Op on Homes Starting at $139,990. The last time the builders did this, it was out of desperation. Watch your back. Stay Alert.

Copyright Infringement as a source of funds

Publishers of print media, in particular, and every other kind, in general, have begun surfing blogs to look for possible copyright infringement lawsuits. This has been emailed as a warning to all Realtors from our Board of Realtors, since we are such easy targets. I have looked over my 2010 blog posts and decided that they are OK, inflammatory sometimes, but not a violation of any copyright. The previous 100 posts going back to the wild wild west of 2007, I deleted. There were too many to comb through and there is no need to give ammunition to fishermen.
Happy 2010.

Interest rates at 50 year lows

Southern Fidelity Mortgage confirmed this morning that interest rates are at 50 year lows. They also have people who can help repair your credit. Sound like a good combination? Call me.

Listed to Sold Ratio Falls to 61% in Las Vegas

Bottom line, the market is still hot, but too many people are signing up for frustration.
In 2009, the ratio of single family homes listed to homes sold in Las Vegas was 67%.
It was only 38% in 2006 as the air went out, 24% in 2007 as they flashed the lights and told everyone the party was over, and 41% as cash buyers began to pick up the bargains. The Blue Light was definitely flashing last year as buyers bought everything in sight, with multiple offers on every bank owned property because inventory was the lowest (57,000 units in 2009) in four consecutive years of declining inventory.
So what's up with this - a listed to closed ratio so far in 2010 of only 61%?

Well, inventory is about the same as last year and sales, except for the past couple months, have been hanging in there. In the last two months, sales are down a little but remain at a very high and respectable rate. I think we are seeing the effect of short sales on the closing ratio of the market.

Have I mentioned that short sales don't close so good?

Well, now they are a substantial percentage of Las Vegas closings, but like the line to get into Pirates of the Caribbean where Disney hides all the ride-goers in waiting, there is a huge number of short sales in the cue.
As more and more of these heart breakers go into escrow on the promise that the banks will make the short sale closings more efficient, the listed-to-close ratio is beginning to show what a mirage this promise actually is, at least so far.

If you have a non-short sale house to sell, or if you want a house you can actually move into before the kids are out of college, call me. 702-285-4226

Traditional sellers are your best bet!

In Las Vegas, Pending to Close ratios for the past 30 days: Of 12,727 Short Sales IN Contract, 985 closed for a success ratio of only 7.7%!
Of 1958 Bank Owned properties in contract, 1004 (51%) closed. Private owners closed 882 of 1281 in escrow for a success ratio of 68.8%. The House Team has more tradional seller listings coming up. Call us!

Banks Postpone Inevitable in Clark CO Indefinitely

I got an email from Kim Petersen at American Title. She wrote. "I’m attaching our April, 2010, reports for you to review and as always, hope that you’re able to use them in your day to day business as you continue to educate your clients about our market. You’ll notice that the majority of the properties that were scheduled to go to trustee sale were postponed (about 48%) more than likely due to a pending loan modification or pending short sale."

I think the banks just postpone because they don't want to increase the number of REO's at the moment.

Whe I do the math based on the April Graph Kim sent, I see that 89,871 properties were given a notice of default in the past 12 months. But, only 23,479 were sold by the trustee. Given that they took 48% of the ones that got a notice of sale, the bank only took 26% of the ones in default. There are 66,392 homes in Default.

To put that in perspective, MLS data shows there are 1697 bank owned (REO) listings for sale today, of all types - condos, SFR, Manufactured. Let's presume they all close every month. Of all the short sales on the market or in escrow (12,600+/-) we close about 600 a month or 6-7%(MLS data). What that means is we have enough property in default to maintain the May 2010 status quo for about 28 years!

Unless something changes in the efficiency of closing short sales, we could be dragging bottom for a long time, especially if the banks continue to refuse to give the seller a full release. The HAFA act MIGHT help with owner occuped homes, Maybe.
Flippers that bought cheap and those who bought before the bubble are much sought after because they respond to your offfer and they close.

I hear a good rumor that several thousand REO's will hit the market mid summer. Looking at the data, it could happen. Or the banks could drag it out. As I have said before, this is not a buyer's market. It is a bankers market.

In the meantime, if you need a Realtor, Call House!

Now what would cause this? Short Sales?

"Number of Contracted Units
Reaches All-Time High

Not only has the number of properties under contract escalated, the distribution of property types has also shifted according to data obtained from the Greater Las Vegas Association of Realtors (GLVAR). During the past week, the count of properties with a contract in place that require certain contingencies to be cleared (“contingent”) reached 13,406 homes, the highest in southern Nevada’s history. The number of contingent units reflects a 70.6-percent increase from the same period of the prior year, while the majority (81.1 percent) of these units is subject to bank approval on a short sale."
The above from: Krysta Sitko
Assistant Vice President / Business Development
Fidelity National Title

As we recented suggested, MLS data shows 70% of all short sales are ALWAYS in escrow, because only 7 in 100 ever close. To get short sales to become 20% of Las Vegas closings means (1) Realtors and sellers are doing more than twice as much work on all of them and (2) a few still trickle out the end of the pipe because there are historic numbers in the system.

Bottom line - still - don't buy a short sale if you want to get the keys.

Suddenly, your checking account is empty!

You have already agreed that it is OK for your bank to do this to you without notice. And they do take care of their clients. Too bad their depositors and barrowers (ie, YOU) are actually NOT their client as far as they are concerned.
Email me and I will send you the link for a bit of sobering news. The bank can sweep your account if you bank at the same place you owe money.
If you are having or anticipating financial problems, you may want to read this.
Then talk with your accountant and attorney about how to protect yourself.
Truly,
Grant

May Day! May Day!

Things are still a little crazy. The tax credit is over. All the first time buyers have gone home (They say. We shall see). If you are an investor, it is your time to shine. So what will you buy?

Short Sales? They ARE all the rage right now. The new HAFA program and the new Wahmu (yes, there is still Wahmu) program will make them so easy...or not. What can you really expect?

Of 13,095 short sales in the Las Vegas MLS either for sale or in escrow, a whopping 695 closed in April! Gee, that's a 5.3% closing ratio for short sales, just like it has always been.

Some Brokers tout the fact that 695 closings is 26% of the 2644 single family homes closed in April. They don't mention that represents 2013% of the man hours spent trying to close the non short sales, or that these short sale contracts were signed last JUNE, or that they fell out of escrow twice because the buyers grew old and died while they were waiting. OK, you want data.

When we take out the the short sales listed for sale but not in escrow, that leaves 9202 short sales in escrow (yes, 70% of short sales are in escrow at all times!) and they produced 695 closed transactions. That is 7% - 7 out of every 100 short sale escrows closed.
In the same period 4024 non short sale escrows produced 1949 closed transactions.
That is 48%. That is about 7 times better.

If not buying short sales, what about REO, bank owned, write multiple offers and never hear back from the bank-owned-agents who don't answer their phone or work weekends? What about those? Well, there are only 1079 REO's on the market today.

By contrast, there are 3049 single family homes for sale that are NOT REOs or short sales. Most of these are other investors who are flipping the property. If, as I believe, investors hate to buy from other investors, then the market reminds me of the old western sidekick of the 1960's named Slim Pickens.

Let's say you are looking for a non-short sale, 3 bed, 2 full bath, 2 car garage, under $150,000 anywhere in Las Vegas valley that Kevlar is NOT a requirement; there are 392 homes available.

Prices are low. Inventory is low. The banks want to make us all do short sales.
Believe it or not, NEW Homes are actually beginning to make sense again.
Call me. It's crazy, but I can guide you through it.

Traditional Sellers hit 50% of listings

Las Vegas home sales back on the rise in March. Click for Graph.
There are 966 bank owned (REO) single family homes available for sale in Vegas today.
There are 3400 short sales for sale in the same areas. We have 4021 single family homes for sale that claim to NOT be bank owned or short sales - about 50% of the market.... Closing 4000 per month, as in Mar, we have a 2 month supply of homes.
Ignore the short sales, because only 5% ever close, and it is a 5 week supply. That makes it tough to get one in contract! I can help. Call me.

Average Sold to Asked

Are houses usually selling above or below list price? Well, that varies by neighborhood, condition, and how well the listing agent checked the comparables.
But the attached graph will give you an overview of the Las Vegas Valley.

Average Sold to Asked

Units Sold

Units Sold

Click the "Units Sold" link above for a cool graph!

Short sales:
In the past 30 days, 2/27 -3/27, Las Vegas valley has closed 564 single family short sales... out of only 12,121 currently listed as available, of these 8475 are contingent or pending (ie, in contract). This gives us a "listed to sold" ratio of 4.79%. Pending to Sold is 6.6%. It has been like this for years.

You'll hear this a lot:
In the same period, Las Vegas has closed a total of 2391 single family homes, short sales, REO and traditional/flippers. That makes single family short sales 23% of the closings! Oh boy!

Non-short sales:
In the past 30 days, 2/27 -3/27, Las Vegas valley has closed 1827 single family NON-short sales... out of only 8068 currently listed as available, of these 3921 are contingent or pending (ie, in contract). This gives us a "listed to sold" ratio of 22.64%. Pending to Sold is 46.6%. It has been like this for years.

The point is that the non short sales will close. There has always been a roughly 20% chance that any transaction will "fall out of escrow." With short sales it is about a 95% chance.

The new HAFA program (call me if you have questions) COULD help with regard to one note short sales of owner occupied houses. We'll see.

One final thing. Just an opinion. Other people's clients do all sorts of things BUT ... It is probably illegal in Nevada for a buyer to pay any portion of the fee for a short sale negotiator. Check out NRS 645.635 Par 5.
Also, the buyer can't be tricked into paying more than his agreed upon purchase price. You can't show the buyer is getting a "seller contribution to closing costs" on the HUD1 if in fact he is NOT really getting it. And, people who would like to get a commission from a Nevada real estate transaction need to have a Nevada real estate license. I'm just sayin'.
(ALL DATA = GLVAR - MLXCHANGE)

Average Price in Las Vegas actually Went UP

"Below are links to a few interesting graphs.
Especially the Last One. "It isn't much, but it could be a life form.
Yes, Skywalker is Alive!"
Truly,
Grant

Realty One Brokerage ranking:
http://www.myrog.com/images/stat-graphs/list-sell-by-value-0210.png

Graph of Las Vegas units sold:
http://www.myrog.com/images/stat-graphs/units-sold-0210.png

Graph of Avg price - it ROSE!
http://www.myrog.com/images/stat-graphs/average-price-0210.png"

Realty One Group is #1 in Nevada

Dear friends,
I have just moved to Realty One to better serve my clients
and I am really excited about the change.
I will be working from the Summerlin Office at 10750 West Charleston suite 180 - North side of the street and about one block East of Red Rock Casino at the 215 beltway.

Watch for a new e-Fax number shortly.
My email and cell phone will stay the same.
702-285-4226

Realty One is Regional - serving California, Nevada, and Arizona.
We are #1 in Nevada. In my eight years selling homes in Las Vegas,
I have noticed that real estate is local.

As always, call any time.
Truly,
Grant

New HAFA Short Sale Program coming in April 2010

Dear friends,

If you know anyone who may need to do a short sale on an owner-occupied house,
please have them contact me. The federal government has a new program
starting April 5, 2010 that should speed up the process and remove some of the shortcomings of the past. This program works best when there is one mortgage or where the second is with the same lender/servicer.

More info is available at:
http://www.realtor.org/government_affairs/short_sales_hafa
Feel free to Call House with any questions - 702-285-4226

It is hoped that this program will improve the short sale success record which remains poor. As of today, MLS reports 11824 short sales either for sale or in contract. In the past 30 days (1/23 to 2/23/2010) 541 actually closed. That amounts to 4.58 percent! Still not good.

The reason may be that when a short sale closed, the SERVICER takes the loss. Under the new HAFA program, the LENDER takes the loss, as I understand it. That may change things.

We are now certified with Bank of America's Equator program (The Great Seal is attached to this blog)and are
becoming well versed with short sales in general and Hafa in particular.
I look forward to hearing from you.
We appreciate your referrals.


Truly,
Grant

Banks, Real Estate Commissions, & The RICO Act - it's just a question

Q: Does routine forced reduction of Realtor short sale commissions by Banks
amount to a form of extortion that falls under the RICO ACT?

Suppose we have a small group of powerful bosses whose names, by
coincidence, all end in a vowel (Fargo, Chase, B of A, etc).
They target a small class of defenseless business people (Realtors) in a
very distressed neighborhood (Las Vegas, or your home town).

These people already owe the bosses a lot of money (on 1st and 2nd mortgages & HELOCS), so the bosses proceed to syphon off half of their business (REO listings = the
majority of closed transactions each month) and give that business only to
those who the bosses directly control (A very small group of
REO listing agents. Bank of America recently said they added only 3 realtors
to their REO approved list in 2009 IN THE ENTIRE U.S. and NONE in NV; to
get on the list one needs a year's experience in REO sales; tough to do if
you don't already have REO listings. Didn't our tax money bail them out? Shouldn't they spread these real estate jobs around a little? Why, no! That would be ... inconvenient.)

The bosses further squeeze the business people's income on what is left (By reducing short sale commissions by 25-33% routinely and often refusing to
approve the final HUD 1 closing statement unless "someone," usually the Realtor, agrees
to pay for additional items on the HUD per bank demands at the 11th hour) and they keep it for themselves. The bosses have the peoples' main industry (real estate) by the throat (Banks control REO sales, approve all short sales, and loan the money to any non-cash buyers).
When, due to declining income, the business people (Realtors) can't pay back their
loans, the bosses take their houses and sell them at current discount
prices (in Las Vegas, Feb 2010 avg price is roughly 80% below Feb 2006). The business men lose whatever equity they paid down (5 to 20% at 2006 prices) and the bosses keep that for themselves, too. And then they come after the people for the deficiency at the old inflated prices, demanding payment despite the fact that the bosses have intentionally damaged their ability to pay. (Q: Didn't the bank make an implied promise under Equity Law NOT to damage their barrowers ability to repay the loan?)

This "routine reduction" applies to hundreds of short sale transactions each month in Las Vegas alone. When Realtor income is down by 60-75% already, it feels like a systematic shake down. The bank is not actually a party to the short sale contract - it is
merely a beneficiary of the closing. The Realtor can't say no to a commission reduction without losing his entire commission. If he refuses, the bank has a "gun to the head" of the transaction. If the transaction does not close, the bank gets the property anyway via foreclosure. If the Realtor stands up for his rights, he may breach of his fiduciary duty to his client. The bank order is an offer he can't refuse because of FEAR of greater loss.

The commssion is reduced by an order called a "short sale approval" that arrives on
bank letterhead, signed by a bank officer, and 100% of that amount is retained by the bank. For the Realtor, it's death by a thousand cuts.

To make the math easy, let's suppose a Commission of 6% (split between listing and selling agent) on a $100,000 short sale house is reduced by a bank to 4% = a $2000 reduction.
Multiply this by 569 Las Vegas short sale transactions in January, 2010 = $1,380,000 in additional bank profits in one month. At this rate, the 4822 short sales closed in Las vegas in the past 12 months = roughly $9.6 Million in lost Realtor income in Las Vegas alone, all taken from the people who can least afford it. The average price per residence was actually $140,000 for the same period, so the $ amount is probably considerably higher. Multiply this by every city across the country and you know where the bank CEO bonuses come from. (GLVAR data)

It's a lot of money. Tony Soprano would be proud.

Cake and Bank of America

At noon today, I attended a function with a panel of Bank of America bankers and one of their REO agents (introduced as the second highest grossing realtor in the State of Nevada in 2009) put on by NHREP, our Hispanic Realtor Assoc, of which I am a non-Spanish speaking member.
The bottom line was that mortgage interest rates are artificially low because the FED is still buying Mortgage backed securities. Interest rates could hit 6-7% by year's end, one of the speakers thought, IF the FED stops buying these.
All seemed to agree that more foreclosures are on the way for Las Vegas, the number increasing each month through 2010. If both the above actually occur, then, taken together, Las Vegas home prices could stabilize or even rise near term and but fall again later, bringing to reality the "double-dip recession" some media have hinted at. The benefit from lower interest rates now, they felt, would probably out-weigh possible lower prices at year's end, which may not even happen, so buying now is better than waiting.
The Bank of America representative noted that B of A added 3 Realtors to its approved REO listing agent group nationwide in 2009, a group of which I am NOT a member, and NONE of these 3 were in Nevada, so, happily, I don't need to feel too bad about being left out.
All speakers agreed that short sales should be getting more streamlined and easier to complete in 2010, offering a higher closing success ratio ... than the dismal 5% that I noted in Las Vegas last fall on this BLOG.
If true, short sales could become the salvation of those REALTORS(r), meaning 99% of us that do not have the benefit of a conveyor belt of bank-owned listings coming through our door. The low inventory of homes was also a topic of interest. The REO agent on the panel said, sadly, he only has 100 listings as of today, down from about 500 at the peak a year ago. Luckily, it was a dinner meeting sponsored by B of A, and the rest of us "outsiders" were actually served cake!