Las Vegas Market Update for May
Single family residential (SFR) closings for April were down 9%from March but 4.5% better than April 2010. The median sales price of an SFR dipped further to $125,000. Yet, the average closed sales price increased slightly from last month. Homes in the South, Northwest, and Summerlin enjoyed noticeable higher average closing prices than in March. Overall inventory continues to slowly shrink; however, available REO inventory reached the 3000 level. Meanwhile Classic Closings have gained momentum even as REO and Short Sale Closings continue to decline!
Again, keep in mind that based on the 2010 Census—Nevada will gain a fourth Congressional seat. To keep up with Reapportionment & Redistricting or the current Legislative Session, please visit: http://www.leg.state.nv.us/.
As always, feel free to contact me with any questions or concerns.

Deirdre Bergeron
REALTOR®
deirdreb@americanagrp.com
www.deirdrebergeron.com
702-275-7667

Here are some stats on the Las Vegas market for November. And as always your referrals are always welcome!

Las Vegas Market Update for November

Single family residential (SFR) closings declined by 207 units from September sales but were down 936 units or (-26.5%) from October 2009.  The median sales price of an SFR dipped to $133,000.   Available REO properties are nearly 3500 units.  Short sale closings slowed down while bank owned (REO) and Classic sales increased.  Cash was certainly “king” in October as 46% of all closings were cash. The market appears to be soft, but stable as we close out the fourth quarter of 2010.

For more in-depth information courtesy of Equity Title: http://ninedots.net/wordpress/wp-content/uploads/2010/11/MarketSnapshotOctober2010.pdf

As always, feel free to contact me with any questions or concerns.

The issue of fraud has been headline news here in Las Vegas with the FBI recently making arrests related to mortgage fraud, it is only natural that we start to see articles surfacing regarding fraud as it relates to the tax credit.  I found this article intriguing.

As always, feel free to contact me with any questions or concerns

Tax Credit Extension Could Help Tax Cheaters

Real estate news and analysis from The Wall Street Journal

By James R. Hagerty WSJ Blog

As we reported Thursday, Congress is considering a proposal from Sen. Harry Reid (D., Nev.) to extend the closing deadline on the tax credit of up to $8,000 for home buyers.

One risk of this proposal: It could help people who are trying to cheat Uncle Sam.

To qualify for the credit, buyers must have made a contract to buy the home by April 30. They are then supposed to complete the transaction by June 30. Because of the rush of people to close by then, mortgage companies and closing agents may have a hard time getting all the paper work done on time. So Realtors are pushing Congress for an extension. Sen. Reid has proposed to extend the deadline for closings to Sept. 30, so long as the buyers were under contract in April.

The danger is that this extension would also give more time to people who are merely pretending they were under contract in April and intend to backdate their documents.

Some real estate brokers see signs of dubious behavior. Glenn Kelman, chief executive of Redfin Corp., a Seattle-based broker that operates in nine states, says he started to wonder if tax fraud was on the agenda after hearing from some customers who were very insistent on closing by June 30 even though they went under contract after April 30.

Schahrzad Berkland, an agent for Fidelity Pacific Real Estate in San Diego, who helps produce analyses of that market, found that the number of homes listed as pending sales agreed upon in April continued to rise over the past few weeks. Normally, that number should decline as some deals fall through. Ms. Berkland thinks some buyers are backdating to April.

Beware: The Internal Revenue Service wants to see the paper trail. A spokesman for the IRS says people claiming the credit are required to “attach a copy of the pages from a signed contract to make a purchase showing all parties’ names and signatures, the property address, the purchase price, and the date of the contract.”

Backdating a contract would be both wrong and risky. “That would be fraud on the federal government,” notes Mark Fiedler of Coldwell Banker Legacy, Rio Rancho, N.M. “As a broker, I would not participate in that activity, although there may be others who might. My license enables me to earn a living, and the FBI is not someone I want to cozy up to.” Besides, Mr. Fiedler says, the FBI is “busy putting people in jail for mortgage fraud right now, so let’s not overwork them.”

Terry Smith, an agent at ReMax Integrity, Fort Worth, Texas, also thinks backdating is a bad idea. She says the IRS could demand to see fax dates on contracts, dates of emails discussing the deal and the date that the buyer put up a deposit as “earnest money.”

And is there really honor among thieves? Kevin Duffy, an analyst at ReMax Unlimited in Cincinnati, says: “First you would have to have all parties in agreement to fudge the dates, then hope no one gets mad and turns the (other) party into the IRS.”

Even without cheating, the tax credit will be expensive for Uncle Sam. The National Association of Realtors estimates that 4.4 million people will seek the credit at a cost of more than $30 billion.

As many of you may or may not know. Today is the day that the new HAFA ( Home Affordable Foreclosure Alternatives) program goes into effect. It is a way for homeowners who are unable to qualify for modification to pursue short sale or deed in lieu procedures. With that said, I have included an article from HUD stating that the term “foreclosure” can include properties with 60 day lates. As always, if you have any questions, feel free to call me.

4/2/10

HUD’s got a big red editing pen in hand and is going to work on what we’ve all understood to be the traditional meaning of foreclosure. The federal agency announced Friday that it is changing how it defines foreclosed to include properties in default and abandoned to include homes with lingering code violations.

Effective immediately, HUD is classifying any property that is at least 60 days behind on the mortgage or the property owner is 90 days or more delinquent on tax payments as a “foreclosed” home.

In addition, HUD is expanding the definition of an “abandoned” property to include homes where no mortgage or tax payments have been made by the property owner for at least 90 days or a code enforcement inspection has determined that the property is not habitable and the owner has taken no corrective actions within 90 days of notification of the deficiencies.

HUD officials say the new wordsmith-ing will help communities acquire, rehabilitate, and re-sell foreclosed and abandoned properties more quickly under the Neighborhood Stabilization Program (NSP) and help prevent further decline in hard-hit neighborhoods.

The changes come just as reports are surfacing that states and local municipalities have spent less than half of the $4 billion available through the NSP initiative to buy up distressed properties in their communities.

According to the Associated Press, as of March 16, only 38 percent of the grant money had been “obligated,” meaning a municipality has a formal contract at a specific address

in place to purchase a foreclosed or abandoned home. The state and local governments must commit the money to projects by September or the funding is lost, the news agency explained.

HUD says its new expanded definitions will increase the reach of NSP by allowing more properties to qualify and will remove existing barriers caused by market conditions.

“The original NSP rules…limited the impact of the Neighborhood Stabilization Program and we’ve heard that clearly from our partners on the ground,” said HUD Secretary Shaun Donovan. “The rules needed to be more flexible so our local partners can put taxpayer dollars to work quickly to stabilize neighborhoods hard-hit by foreclosure.”

HUD previously defined the term foreclosed to apply only to properties where the foreclosure process was completed. Local communities suggested this narrow definition was not a good fit for market conditions since many properties were lingering in the foreclosure process and beyond the reach of NSP.

Properties will now be eligible for NSP assistance if: the mortgage on the property is 60 or more days delinquent and the owner has been notified; the property owner is 90 days or more behind on the taxes; or foreclosure proceedings have been initiated or completed under state or local law.

The word abandoned was previously defined as a property that had been foreclosed upon and was vacant for at least 90 days. This definition effectively excluded properties abandoned by owners but where tenants were still in place, precluding local communities from assisting the properties with NSP funding or protecting the tenants’ occupancy. HUD determined this limitation was a substantial barrier to the preservation of existing affordable housing.

To address this limitation, HUD is now also classifying “abandoned” as a home where mortgage or tax payments are overdue by at least 90 days, or a home that has received a code violation that makes the property uninhabitable and no remedial action has been taken to bring it up to code for 90 days.

By: Carrie Bay DSNEWS

Chris Morris / Special to the Sun

By Buck Wargo

If real estate agents are applauding the historic snowfalls pounding the Midwest and Northeast, little wonder.

History tells us that blizzards prompt snow-weary homeowners to move to Las Vegas, and the depressed housing market is making that all the more attractive.

With a 60-percent decline in home prices in Las Vegas since 2006, the valley is certainly an attractive option to homebuyers tired of wielding snow shovels.

Las Vegas has been relying on investors and first-time homebuyers to swoop up a lot of the inventory triggered by foreclosures — but Realtors and housing analysts note it is uncertain how much longer that market can be tapped.

Enter the snow factor.

“We’re expecting the most recent weather along the East Coast will make more people relocate to the Southwest,” said Linda Rheinberger, president of the Nevada Association of Realtors and owner/broker of One Source Realty in Las Vegas. “Some people are fixated on Arizona and New Mexico, but they are open to the opportunity in Las Vegas, especially with the undervaluing in housing. They know they can buy at such a great deal.”

Homeowners looking to upgrade have remained on the sidelines because many are unable to sell their homes after values have declined so much. And there are no jobs to speak of to lure new residents.

That means retirees could be an important piece of the puzzle until the economy recovers. And who hates snow more?

“I believe they could be an even more important component,” Rheinberger said. “Unless we concentrate on job creation, we are forced to consider retirees and people who are not subject to the job market as a crucial part of our economy.”

Rising home prices in the past decade shut out many seniors who might have wanted to retire in Las Vegas. Now they may be ready to pounce, said Bob Hamrick, president of Coldwell Banker Premier.

One analyst suggests people 60 and older comprise 16 percent to 17 percent of the market today. Watch that number rise by as much as half, Hamrick said.

Demographics are on Las Vegas’ side, too.

The first of the Baby Boom generation turns 65 next year and those in a financial position to do so are looking to warmer climates for retirement, said Steve Bottfeld, executive vice president of Marketing Solutions.

“I think seniors are going to be the next wave of buyers,” Bottfeld said. “What you are going to see is a strong movement here beginning this year and peaking in 2012 and 2013. A lot of people are looking east but look at California (instead). There are a lot of people who want to get out of the congestion and want a simpler life. It is a much lower cost of living (in Las Vegas), and most important is the lack of a personal income tax.”

Thirty-two million people will turn 65 from 2010 to 2030 and 30 percent will move at least once during retirement, according to Applied Analysis.

The U.S. Census Bureau projects that from 2010 to 2020, Nevada will see a 61 percent increase in residents 65 and older.

Bottfeld said seniors will be in a better position in the next couple of years with the stock market rebounding. In addition, they can qualify for loans more easily than many other buyers,

“We are the single most underpriced city in the country. A lot of people are looking at us and saying, ‘It is a bargain,’ ” Bottfeld said.

Rheinberger said one reason Realtors nationwide pushed for an expansion of a tax credit of $6,500 for existing homeowners was in part to target seniors who want to move. That extension expires June 30, she said.

“They are less subject to the whims of the marketplace,” Rheinberger said. “They have a stream of income that is defined, whereas those who have to work to support themselves are in a worse position.”

Although Las Vegas will attract a lot of seniors, it won’t be the first choice of many, according to a 2010 Del Webb Baby Boomer survey. It shows about one-third of seniors plan to move to a new home during retirement and 50 percent of those who plan to move will go out of state.

North and South Carolina were at the top of the list of places to move to followed by Florida, Tennessee, Virginia, Arizona and California. Nevada didn’t make the top tier of states.

John Restrepo, principal of Restrepo Consulting Group, said competition among states for seniors will be fierce. The primary attractions include cost of living, entertainment, availability of medical services, weather, tax structure, proximity to family and work opportunities. Southern Nevada rates high for some factors, such as cost of living, including housing prices, entertainment and tax structure, but not so well in others such as health care services and job opportunities, he said.

“But retirees want a complete set of senior-related services and amenities to attract them to a community or region — not the least of which are health care services and even jobs,” he said.

Dennis Smith, president of Home Builders Research, said he is telling clients to watch the trend of seniors relocating, which also will help bolster the new-home market.

He suggests that the housing industry focus more marketing efforts on retirees who eschew Las Vegas because it is perceived as Sin City.

Restrepo said it’s worth discussing whether public dollars should be spent to attract retirees, but his research suggests that middle- and upper-income retirees are sophisticated enough to know the qualities and amenities of the various Sun Belt regions they are considering.

Property Tax Amount and Lowering Property Taxes

I have received calls on how real property taxes may be affected by the current economic market in Clark County.

How Is Tax Determined?

Real Property taxes in Clark County are based upon a formula, not the sales price.  To calculate the real property tax you multiply value times .35 times tax rate.  (VALUE x .35 x RATE).  Example:  $1,000,000 x .35 = $350,000 assessed value.  To calculate the tax, multiply the assessed value ($350,000) by the tax rate (.035): $350,000 x .035 = $12,250.

How Is Value Determined?:

The value is generated by the Clark County Assessors  office. 

When is Value Determined?:

Notice of value was sent by mail to property owners on December 1, 2009.

How Do You Appeal Value (Lower your Taxes):

Owners have between December 15 to January 15, 2010 to file an appeal.  Owner can telephone and speak to the Assessor to request an appeal form OR go to 500 S Grand Centennial Parkway 2nd Floor Las Vegas, Nevada to get an appeal form.  Beware of Scam:  Be aware there is no such thing as a “Property Tax Review Board.”  The Board claims that it can lower property taxes for property owners.  Questions regarding this matter can also be addressed by contacting the Nevada Attorney General’s Bureau of Consumer Protection at (775) 684-1169. 

Deadline:

Appeals must be filed within these 30 days, December 15, 2009 to January 15, 2010.  

More Questions:

Questions regarding a tax amount for a specific property should contact the Treasurer’s Office 702-455-3882.

I hope this great info passed on from my broker helps some of my fellow Nevadans with their questions about property taxes in the current market. Have a great weekend, and as always referrals are always welcome!

As usual, I have come across some great info that may be of some assistance to you or someone you may know who is having a tough time, as so many of us are these days. Below is an article from Fannie Mae.Please feel free to call me with any questions or concerns and as always, referrals are always welcome.

 Fannie Mae: New Affordable Housing Options Fannie Mae announced Tuesday that it has launched several initiatives designed to stabilize neighborhoods and promote purchases by owner occupants and low-income buyers.

Fannie Mae’s “First Look” initiative offers buyers who intend to live in the home, particularly low-income buyers, and an opportunity to make an offer during the first 15 days the property is on the market. Investors can only make an offer after the first 15 days have passed. Other programs aimed at stabilizing neighborhoods include:

• Deposit Waivers. Fannie Mae will waive the earnest money/deposit requirement for public entities using public funds to purchase a Fannie Mae-owned property. Individual home buyers who have qualified for public funds and want to purchase a Fannie Mae-owned property do not have to meet the usual earnest money/deposit requirement either. Deposits for these buyers can be as low as $500.

• Reserved Contract Period. Upon receipt of an acceptable offer, buyers have the ability to renegotiate their offer after obtaining an   appraisal.

• Extra Time for Closing. Buyers receive up to 45 days to close – 15 days more than is usually permitted for purchases of Fannie Mae-owned properties.

Source: Fannie Mae (11/24/2009)

This new program just launched by Fannie Mae is an option for those who are faced with hard times, but would like to remain in their home. Feel free to call me with any questions and as always, referrals are always welcome 

Fannie Mae Announces “Lease for Deed” Program
by CalculatedRisk on 11/05/2009 11:20:00 AM

From Fannie Mae: Fannie Mae Announces Deed for Lease™ Program
Fannie Mae (FNM/NYSE) is implementing the Deed for Lease™
Program under which qualifying homeowners facing foreclosure will be
able to remain in their homes by signing a lease in connection with the
voluntary transfer of the property deed back to the lender.

The new program is designed for borrowers who do not qualify for or
have not been able to sustain other loan-workout solutions, such as a
modification. Under Deed for Lease, borrowers transfer their property
to the lender by completing a deed in lieu of foreclosure, and then lease
back the house at a market rate.

To participate in the program, borrowers must live in the home as their
primary residence and must be released from any subordinate liens on
the property. Tenants of borrowers in this circumstance may also be
eligible for leases under the program. Borrowers or tenants interested in
a lease must be able to document that the new market rental rate is no
more than 31% of their gross income.

Leases under the new program may be up to 12 months, with the
possibility of term renewal or month-to-month extensions after that
period. A Deed for Lease property that is subsequently sold includes an
assignment of the lease to the buyer.
This is part of the “single family public housing” program.

Deirdre Bergeron
REALTOR®
deirdreb@americanagrp.com
www.deirdrebergeron.com
408-275-7667
702-275-7667

Good news, just in from one of my sales managers:

Senate Dems on Board with Credit Extension
Senate Banking Committee Chairman Chris Dodd (D-Conn.) says Senate Democrats have agreed to extend the first-time home buyer tax credit. The latest version extends the program to home sales signed — not closed — by April 30. Purchasers would have another 60 days to close the sale. The credit will also be expanded to include so-called step-up buyers who have lived in their current home for at least five years.

The credit would be cut nearly 10 percent to a $7,290 cap. Income eligibility for first-time home buyers would stay the same, but it would rise for step-up buyers to $125,000 for individuals and $250,000 for couples.
Source: Bloomberg News, Dawn Kopecki and Ryan Donmoyer (10/27/2009)

So don’t hesitate if you are in a position to buy! Feel free to call me with any questions and as always, referrals are always welcome J

While obstacles to short sales remain, real estate practitioners say the process is becoming more efficient. Rather than waiting six months or more to push through a deal, agents say banks are more willing to negotiate prices up front.

“My gut feeling is that short sales seem to be the preferred avenue for distressed property now,” says Cindi Hagley of San Ramon, Calif.-based Windermere Welcome Home. “It’s cheaper for [banks] to do a short sale than go all the way to foreclosure.”

The short-sale process has become more manageable now that banks are willing to pre-approve prices, reach out to underwater borrowers who have listed their homes for sale, implement Web-based systems that manage the short sale process, and add staff dedicated to short sales.

Additionally, the U.S. Treasury is set to implement a streamlined short sales framework and offer incentive payments of $1,500 to home owners and $1,000 to both loan servicers and second-lien holders.

Borrowers also prefer short sales because Fannie Mae requires them to wait only two years to own another home or even less than that if they were not delinquent. By contrast, those who lost their homes to foreclosure have to wait five years.

Source: San Francisco Chronicle, Carolyn Said (10/21/09)

Hi Friends and Family,

I hope this information is helpful. Feel free to call me with any questions and referrals are always welcome 

Deirdre Bergeron
REALTOR®
408-930-7667
702-275-7667