Blood in the Bellagio Fountains ...so to speak

Now that's a visual image of Las Vegas real estate with blood in the water!
In the Las Vegas valley, the new construction homes being sold are smaller and cost less, Buck Wargo of the Las Vegas Sun has just reported. “The price per square foot (new construction - gh) fell to a new low of $91.17, which is 12.4 percent below the $104.05 square foot price in April 2010,” he says. 313 permits were issued in April, “34 percent fewer than April 2010. For the year, 1,141 permits have been issued, which puts the region on track to fall below the 3,776 issued in 2010.”
Read Buck Wargo’s entire article at http://www.vegasinc.com/news/2011/may/16/las-vegas-existing-home-sales-brisk-prices-continu/ (used with permission). It has some great data that MLS doesn’t capture.
Bottom line, Mr. Wargo concludes prices have fallen by about 14% since this time a year ago, MLS listings fell by 9% between March and April this year, and the median price of resale homes is currently about $107,000 and $70 and change/sq ft. The double dip we feared seems to have occurred. Question is, has it stopped dipping?
Emails from new home builders continue to tout very high realtor commissions – 6% at some builders recently. As I have mentioned before, when the market is strong, some builders almost quit paying commissions because they feel they don’t need the Realtors. But lately, as they did back when the crash unfolded, they are offering the moon.
On the street, some lenders don’t want to lend. I have had a recent transaction with conventional loan, fall out because, weeks into the work, and after losing the first house to problems discovered by our home inspector (as he should) and after the second house in contract had passed inspection, the lender cut the amount they had promised to lend and destroyed the deal, thank you. They handed us the ball, let us run with it, and then tackled us. At least I didn’t pick’em. Nationwide may be on your side, but the banking industry is a separate question.
If you need an ethical lender, I can recommend someone.
So, prices are very low, and could still go lower. Sales volume is huge. Listings are down, and if you exclude short sales as I recommend, inventory is tight! Over half of LV offers are cash. If you are not aggressive with your highest and best offer, don’t bother. This is Vegas. The world is shopping here right now. If you hedge on your offer with sale numbers so high, somebody else with cash probably wants it more than you. The fountains dance about every 20 minutes.
Good hunting.

Health Dept recommends Short Sale Innoculations

In the past thirty days, April 7 to Kentucky Derby Day of 2011, Las Vegas has closed 3074 single family homes. Of those, 744 or 24% were short sales. As a result some will say short sales are becoming a more significant portion of the market.
Yes, I admit that is true, if wearing two dead albatrosses around your neck is twice as much fun as wearing one.
The important facts for Realtors are that of 12,370 short sales during the time period 6754 were in escrow and only 5616 were available for sale. That gives you a closing ratio (744 out of 6754) of 11%, meaning only one in ten short sales in escrow in any given month actually close and MORE THAN half (6754 of 12370) of all short sales are perpetually in escrow. The descriptive word here also describes drinking soda though a straw.
For real transactions – bank-owned, flips and traditional – the same closing ratio is 78%. Of 9947 non-short sale single family homes on MLS in the same period, 6017 were available for sale and only 3930 were in escrow because they close!
Why is the short sale record so bad?
First of all, the banks have your best interests at heart. Second, of those few that closed, my experience suggests that most short sales have run through more than one buyer, perhaps several more. Ever hear of an agent who, once his client has a back up plan (short sale in contract) with a contingency (bank approval) that will NOT be removed for months, goes out and gets a real transaction?
What about Education … and Lawyers:
Well, haven’t they been offering SS classes ever since the crash? Haven’t attorneys chased the SS ambulance right into REALTOR® sales meetings? And haven’t the short sale stats tremendously improved since 2009 as a result? (no) Can results from the short sale training and results achieved by SS attorneys be confused with what comes out of the south end of a northbound bull? (yes)
Conclusion:
Save your money. Save your time. Short sales as they currently exist should be illegal.
Best wishes.