Vegasagent’s Weblog

Cancellations on Las Vegas new homes are rising around the Valley. Home Builders Research released statistics showing that the cancellation rate on purchases of new homes in the Valley jumped to 53 percent in August.

The rate had been closer to 30 percent two months ago before lenders starting tightening credit. Lenders are requiring higher credit scores, and those who don’t have good credit are required to put down a greater down payment or pay higher interest rates. Even people with good credit are finding it harder to get jumbo loans of $417,000 and above. Those who can’t document their income are also having difficulty getting loans.

“Buyers are certainly not canceling because they are changing their minds,” said Dennis Smith, president of Home Builders Research. “They are canceling because something has changed in their monthly payments.”

The good news for patient buyers who were waiting for the Las Vegas homes market to bottom out is that builders have drastically lowered their prices and are offering incredible incentives in order to move inventory. And a few top real estate agents are negotiating even better deals for their buyers than the tracts are initially offering based on the volume of buyers they are able to bring to the tract.

Smith reports Meritage Homes lowered prices in some of their subdivisions by $50,000. And Rhodes Homes is selling homes for $125 to $130 per square foot, way below 2005 levels.
But despite current soft market conditions, Las Vegas is continuing to grow at a rapid pace, and reports say recovery is likely to come faster here than in any other city in the country. A large shortage in labor and a retiring baby boomer generation spell a large population increase in the imminent future which should effectively eliminate the housing surplus and return the market to balanced buying and selling conditions. In order to take advantage of the existing builder discounts, contact our office at 702-985-7654 and ask to speak to one of our new homes specialists.

In these challenging times when credit requirements are being tightened up at all the major lending institutions, good credit is more important than ever for home buyers. Las Vegas mortgage lenders have all but eliminated 100% financing and those with 5% down need to have great credit scores to obtain financing. Below are three techniques for raising credit scores substantially within 30 to 60 days.

DEBT to CREDIT RATIO: Carrying the proper debt to credit ratio will boost your score faster than paying off your bills in full each month. If you have $10,000 in total unsecured revolving credit accounts and you’re currently in debt $2500, then your debt to credit ratio is 25%. If you have $1000 in unsecured credit and you owe $500, then your debt to credit ratio is 50% and you will score lower even though you owe considerably less money!

So how can you bring your ratios down without selling everything you own? The answer sub prime merchandise cards. A sub-prime merchandise card is nothing more than a card attached to a line of credit which allows you to buy merchandise from a specific vendor. The merchandise (in most cases) will be purchased through a catalog or online mall. Here’s how it works: the company approves anyone with a pulse (literally) and gives them a card for $2,500 to $12,500 with NO credit check and NO cosigner. However, the card is only good for merchandise through their website or catalogs and the consumer is required to put down a deposit on whatever they purchase. After the deposit is paid, the remaining balance is financed on the card. With a legitimate Sub-Prime Merchandise Card your credit line WILL be reported to at least one major credit bureau (or more).

This means if you get a $5,000 card and you finance $500, on your credit report it will look like any other credit card and will do three extremely important things for you. 1.) It will increase your current “High Credit Limit” by $5,000 almost overnight as the account “looks” like any other unsecured evolving account. 2.) By carrying a small outstanding balance it will positively impact your credit report by building and showing potential lenders your credit worthiness. 3.) With a good payment history you are virtually guaranteed to receive “legitimate” pre-approved credit offers in the future due to other lenders renting your name from the credit bureaus.

PIGGYBACKING: Piggybacking is easy, effective, and extremely fast. Almost every credit card or credit account will allow the primary account holder to add on (at a later date) what’s known as an “Authorized User” or “Secondary Account Holder”. In most cases, when this is done, the entire account history(retroactively) gets posted to the authorized users credit report regardless of their current age or credit history. This strategy is usually only used by parents and their children or between other relatives. In recent years, due to its’ effectiveness, this technique has led individuals with excellent credit scores to “rent out” authorized user accounts on one or even multiple credit cards in return for a fee.

DISPUTING COLLECTIONS AND BAD DEBTS: Often collections and bad debts that appear on a credit report can be removed simply by disputing them. The collection company has 30 days to respond to a dispute and often never does. At that point the credit company is required to remove the item from the credit report thus raising the score.

To find out more about financing Las Vegas homes, please call us at 702-985-7654.

Once again the land on the northeast corner at Sahara and Las Vegas Boulevard has changed hands, this time being purchased by Steven Johnson, longtime real-estate developer, who, for the past several decades, has quietly negotiated land deals in Arizona and around the Southwest. Most recently, Johnson bought the three adjacent parcels at the northeast corner of Las Vegas Boulevard and Sahara Avenue according to Clark County land records.

Previously the site of the Holy Cow Casino, this two acre parcel was most recently proposed to be the tallest condo tower in Las Vegas, according to would-be Australian developer Victor Altomare. Launched with the motto “In Vegas, Size Matters,” The Ivana Supertower was intended to be an 80 story building soaring above the Las Vegas Strip at 923 feet. Much was made of the competition between Ivana Trump, after whom the building was named, and ex-hubby Donald for sales of their respective Las Vegas condos properties. But after numerous launch parties and lots of hoopla, eventually Altomare quietly folded up shop and headed back to Australia.

The current sale shows Johnson paid $45 million for the two acre Holy Cow/Ivana parcel. Johnson says that he is at least a month from finalizing plans for the site, which is across from a multibillion-dollar resort that MGM Mirage Inc., Kerzner International Holdings Ltd. and Dubai World are planning. Since the site is entitled for a casino, there is speculation that there will be some sort of gaming on the property. But much of the property Johnson has purchased in Las Vegas has been turned into Walgreens drugstores, including one on the Las Vegas Strip near the MGM Grand hotel-casino and another at the corner of Charleston and Las Vegas boulevards.

Whatever he builds there, Johnson’s intention is that by the end of 2009 his project will be 75% complete. Evidently Johnson, who has been extremely successful in all his past real estate ventures, feels that Las Vegas real estate is still a good investment, even with a $45 million dollar price tag! That’s why it’s also a good time to look into Las Vegas homes for sale. Buy when the “big guys” are buying too.

This morning at the Four Season’s hotel in Las Vegas, Prudential Americana Group Realtors introduced Adam Kearney and Eric Torykian as the newest high profile mortgage lenders to join MJM Home Loans, an affiliate of Countrywide Mortgage. I have been privileged to work with Adam and Eric for years, and was tremendously excited about them joining the company.

I originally met Adam when he was coaching wrestling to my two young sons. He was still in college at the time, and had been the Nevada state wrestling champ his senior year in high school. It takes an amazing commitment and drive to become a state champion, and wrestling is a team sport as well as an individual competition. Adam brings the same kind of all star dedication and enthusiasm to Las Vegas mortgages that he did to wrestling, as well as the team spirit necessary to put deals together. And he never gives up on a client when trying to find the perfect loan that will allow them to purchase their dream home. Adam specializes in knowing all the different loan programs, no matter how obscure, and matching them to the client’s needs. And he has a phenomenal staff behind him, getting paperwork processed in an expeditious manner.

I have called on Adam many times when the buyer’s lender on one of my listings left us all hanging at the last minute after promises that the loan was “good to go.” He has literally taken a loan, packaged it, gotten it approved and funded it within 3 days, start to finish. To get the job done, he has even had his processors literally get on a plane and fly to another city with loan docs, gotten them signed and notarized and flown back so that the loan could be funded on time. That kind of service is why I have followed Adam through five different mortgage companies over the years, and am honored to call him a friend as well as a business associate.

In these days when many mortgage companies are shutting their doors and are unable to put together a loan package that gets funded, lenders like Adam and Eric, with their commitment to customer service, are essential to any real estate transaction.

This is a question we are asked all the time! I always reply that my crystal ball is broken, but recently I have been noticing that though sales are still slower than they were in 2004 and 2005, the hectic “golden” years of real estate, they seem to be remaining steady. And the buyers, though still a bit gun shy, are showing signs of returning to the marketplace, impatient to get into home ownership again finally. My personal prediction is that next spring, we will see the Las Vegas homes market totally return to “normal” because of pent up demand plus the influx of both retirees and younger people looking for jobs in all those upcoming casinos.

Guess I am not the only one who thinks so. Forbes recently released its list of top 10 picks of where to buy real estate now based on what it perceives as future trends (see article below), and Las Vegas was on it! So for those weary Las Vegas home sellers, hang in there, better times are coming! And for buyers, better get on the ship now before it leaves the dock and you have to swim for it!

Daily Real Estate News October 9, 2007

The real estate business may be facing a softening in sales, but there are parts of the country where it makes sense to buy now. Forbes magazine examined current home sales patterns and sales projects in the country’s 40 largest real estate markets to identify these attractive markets. Based on models that estimated 2008 housing inventory, sales rates, and turnover, the magazine compiled a list of markets that are experiencing price declines, but where buying looks attractive because there is likely to be an increase in sales in the near future. Here are Forbes’ and Moody’s 10 most attractive cities along with the median homes sales price and their price change from 2006.

1. Fort Worth, Texas: $156,500, 1.7 percent
2. Kansas City, Mo.: $157,700, -0.7 percent
3. Houston: $154,900, 1.4 percent
4. Cleveland: $128,700, -7.1 percent
5. Denver: $255,200, none
6. Long Island, N.Y.: $482,300, 1.7 percent
7. Washington, D.C.: $445,300, 0.3 percent
8. Orlando, Fla.: $265,100, -2.4 percent
9. Phoenix: $264,800, -2.7 percent
10. Las Vegas: $307,900, -3.6 percent

Source: Forbes, Matt Woolsey (10/08/07)

A decision by the 9th U.S. Circuit Court of Appeals on a North Las Vegas case is expected to save developers of apartment buildings from the prospect of serious legal headaches.
A three-member panel of the Appeals Court ruled that builders of Las Vegas multi-family housing cannot be held liable indefinitely for faulty design or construction under the Fair Housing Act. The 2-to-1 ruling supported a reading of the act that says the statute of limitations on such claims begins when the structure is occupied — not when the fault is discovered.

The case began in 2004 when a disabled “tester” from the Disabled Rights Action Committee (DRAG) visited a complex called Craig Ranch Villas looking for violations of the Fair Housing Act. He and DRAG sued the developers and owners under the faulty design and construction clause of the Fair Housing Act.

“Basically, had they won, the liability of the original owners, developers and contractors would be limitless,” said Josh Reisman, a Ballard Spahr lawyer who defended the case. “And it was construed very broadly so that everyone involved with the building, throughout its history, could be involved.”

There is currently a statute of limitations holding developers and builders responsible for Fair Housing Act violations for two years from when the structure is occupied. The 9th Circuit’s ruling is a relief for valley builders, architects and contractors who could have been held liable for faults on any property built after the Fair Housing Act went into effect in 1991. Often apartment complexes change hands multiple times between when they are designed and when they are occupied, leaving previous owners liable but with no control over possible fixes.

Las Vegas already suffers from a lack of affordable housing and builders of multi- family units generally serve that section of the market. Las Vegas homes for sale currently average $286k and many families have been priced out of the market. Had the 9th US Court of Appeals decided in favor of DRAG, there would have been no incentive for developers to build more multi-family units, knowing they could be sued indefinitely.

High prices in international housing markets, combined with the weakening US dollar and the current slump in US housing values, have foreign investors taking another look at Las Vegas real estate investments.

Foreign currencies, which have posted significant gains against the US dollar in recent weeks, have international investors eyeing the depressed US housing market looking for bargains investments and affordable second homes. Canadian currency got a boost after a report showed the economy expanded for the third straight month in July. It climbed above $1 on September 20th for the first time since November 1976, and Canadians are flocking across the border.

Gold also broke through to a fresh 28-year high as the dollar hit a new record low against the euro. For the first time since it began trading, the euro now buys one dollar and 40 cents, having started out at almost the same value. In addition, the Pound Sterling hit a one-month high against the softer dollar, peaking as high as $2.0331 in trading.

With the high price of foreign real estate, investors are bargain shopping in the United States to take advantage of the favorable rate of exchange while it lasts. One of the most popular housing areas being scrutinized is the Las Vegas real estate market. Though previously touted as the one of the markets most likely to crash after high appreciation rates, the decline in Las Vegas prices seems to be stabilizing due to the continued steady growth of 6,000 new residents each month and an expanding labor shortage as more of the multi purpose mega projects like the MGM City Center come online. As the labor shortage problem worsens over the next twelve months and as another year of baby boomers hits retirement age, a spike in prices is expected to roll out towards the end of 2008.

But currently prices are still at a three year low with the number of foreclosures to choose from providing a bonanza for those with cash. Las Vegas new homes builders are offering incredible incentives as well in order to move standing inventory so they can go on to new projects. And they are offering foreign nationals favorable financing with 30% down at American lending institutions despite the recent credit crunch. Foreign residents can even obtain financing with 10% down, good credit and local employment.

One of the most popular investments for the international buyer seems to be the mixed use high rise projects going up along the Las Vegas Strip and in downtown Las Vegas. In addition to the luxurious high rises in the MGM City Center and the Cosmopolitan, mid rise urban lifestyle developments like Sullivan Square and Manhattan West are also gaining in popularity. Prices range from the high $200s to over $5 million for some of the penthouse properties, with a wide range in between for preconstruction. And there are some real steals to be had in the burgeoning resale market in developments like Panorama and the MGM Residences where buyers intended to flip quickly rather than hold long term.

To receive assistance negotiating the best deals on Las Vegas Homes or Las Vegas Condos, contact a professional Realtor.

Nevada’s population boom is keeping the Southern Nevada Water Authority scrambling for new sources of water. Every hour, 24 hours a day, seven days a week another two acres of Las Vegas land are developed for residential or commercial use. Developers of Las Vegas new homes are running out of new street names and two phone books are printed every year to keep with up all the new residents and businesses. In 2000 the Census Bureau projected the United States would grow at a rate of 19 percent by 2020. Since 2000 the Las Vegas Valley has added 480,397 new residents - that’s the population equivalent of Oakland, California. Nevada’s population is expected to grow by 69 percent to 3.6 million people in 2024.

Las Vegas has been one of the country’s fastest growing cities for years. Las Vegas has consistently maintained the highest new job growth in United States. Of the 25 cities likely to have the country’s highest employment growth over the next five years, Las Vegas ranked second in a recent Forbes Magazine study. Since 1990, Las Vegas has also ranked number one in high-tech job growth and more than half of the new companies that recently relocated to Las Vegas were high-tech/manufacturing firms.

But a lingering drought combined with 20 years of booming growth has left Southern Nevada parched. Local officials have subsequently been hard pressed to meet the valley’s increasing water needs, which the SNWA now estimates at 400,000 acre feet more annually by 2025. The SNWA, in response, has been pursuing a 300-mile buried pipeline to import up to 150 million gallons of groundwater from northeast White Pine and Lincoln counties. The bond-financed project will cost at least $2 billion to complete.

The SNWA also received approval earlier this year to draw 60,000 acre feet of groundwater from Spring Valley in White Pine County in a staged fashion, with immediate rights to 40,000-acre feet. And the water agency has another hearing in February about drawing 35,000 acre feet of groundwater from Snake Valley, east of Spring Valley.

Meanwhile, the initial 75-mile pipeline section could be operational as soon as 2012.But that’s not soon enough. The primary raw water intake at Lake Mead could become inoperable as soon as 2010 based on current drought and user projections, spelling potential disaster for Las Vegas. The SNWA, however, is responding with $817 million for a third raw water intake at Lake Mead about three-miles northeast of Saddle Island. But a lack of water could ultimately impact growth in the valley and drastically reduce the number of Las Vegas homes for sale as existing inventory is eaten up by the expanding population and driving prices much higher.

Last week Gov. Jim Gibbons and Assembly Speaker Barbara Buckley, D-Las Vegas, put the escalating problem of homes in foreclosure under the spotlight. Gibbons called for an Oct. 4 economic summit on housing, and Buckley convened a special subcommittee on mortgage lending in Nevada.

The fallout from foreclosures has tightened credit nationwide and made it more difficult for even those with good credit to get loans unless they put down a larger down payment or pay higher interest rates. That has reduced the pool of buyers for Las Vegas homes at a time when the city has record level of inventory on the market.

Recently President George W. Bush (08/31/07) announced that HUD’s Federal Housing Administration (FHA) wouldl help an estimated 240,000 families avoid foreclosure by enhancing its refinancing program effective immediately. Under the new FHASecure plan, FHA will allow families with strong credit histories who had been making timely mortgage payments before their loans reset-but are now in default-to qualify for refinancing.

Under FHASecure, borrowers that are delinquent on their mortgages as a result of interest rate resets will now be able to refinance using an FHA-insured mortgage. In many cases homeowners may be permitted to include mortgage payment arrearages into the new loan amount, subject to existing geographical mortgage limits and the loan-to-value limit shown below. Before this, only borrowers who were current on their existing loan were allowed to re-finance into an FHA-insured mortgage.

Assembly Speaker Buckley noted that it is not a bail out at the state or federal level to help first-time homebuyers who were sold Las Vegas mortgages by predatory lenders looking for higher commissions when they could have received a more conventional loan. “I think it would be wise to allow them to refinance,” Buckley said. “It would not be a taxpayer bailout to allow them to have access to capital that they can repay on reasonable terms.”

For more information on the FHASecure plan or to be referred to a reputable lender, please call our office at 702-985-7654 and ask to speak to one of our preferred mortgage lenders.

Contrary to many local developments, Chapel Hill, a new Las Vegas condo project, is actively courting real estate investors with buying incentives. The condominium project’s developer, Nevada West, offers a guaranteed lease for one year, 2 percent towards closing costs, and no home owners association fees for one year.

“This is a chance for those buyers who want a piece of the Las Vegas real estate market,” said Ron Smith, regional sales manager for the project. ” Chapel Hill is welcoming investors with this spectacular promotion.”

Located off Interstate 215 at Russell Road , Chapel Hill lies in the southwestern portion of the Las Vegas Valley . The complex is close to Red Rock National Conservation area and the Red Rock Station, the area’s newest casino, which houses retail shops, restaurants, a movie theater complex, a spa and the Cherry nightclub. The project also is close to Southern Hills Hospital and several neighborhood eateries and shops.

Five floor plans range from 700 to 1,100 square feet. Each kitchen is fully appointed with oak cabinetry, breakfast bar and pantry. Also included is a microwave, dishwasher, oven/stove range, garbage disposal and a frost-free refrigerator with ice maker.

“Our kitchens are designed for usability,” Smith said. “We want our buyers to be able to live comfortably in their homes.”

Other features include 9-foot vaulted ceilings, ceiling fans, walk-in closets, full-size washer and dryer, private patio/balcony, storage closet and monitored fire alarms in each home.
The gated community also features a putting green, acres of landscaping and a resort style clubhouse that includes a pool, spa, and a health and fitness center.

For more information on this project, prices and floor plans, please call our office at 702-985-7654.