Are You An Optimist Or A Pessimist?

I read and participate on a number of blogs related to real estate. Some people, like me, are optimists. We understand things are bad but feel that there are glimmers of hope to be grateful for. Pessimists are out there not only to spout doom and gloom, but capitalize on how everything is bad, getting worse and won't get better for years, if ever. My dilemma is do I spend time trying to convince people that their outlook affects everything, or join other optimists by putting on my rose colored glasses and seeing things in a better light?

In the early 1980's, we were in the midst of a huge recession, watching jobs vanish and dealing with paying double digit interest rates on our mortgages. There wasn't the same kind of creative financing that went on just two years ago, but naysayers and black cloud spouters were everywhere. And then the sun came out. We came out of the recession, interest rates dropped, the job market improved and real estate again became a good investment.

Then in the late 80's and early 90's, with little oversight, we had the Keating disaster with all the savings and loans. Millions of people lost tons of money, tons of jobs, and real estate in many areas such as Arizona took a nose dive. (I know only because that's when I foolishly jumped into selling real estate full time). Great fodder for those naysayers and doom spouters again. But, this too did pass. Cooler heads prevailed, regulatory steps and oversight were put in place, jobs reappeared and real estate again recovered.

Now we're in the 21st century. After an insane record run on real estate complicated by greedy banks and rose colored glass wearers refusing to acknowledge that this freakish growth could not possibly continue, we're back to deciding if the glass is half empty or half full. In our local newspaper this morning, experts and pundits much smarter than me state that Las Vegas has an existing home inventory of about 10 months which, according to Larry Murphy president of Sales Traq, is just outside the norm of 6-9 months worth of inventory which is considered healthy.

What does this all mean for real estate, or specifically Las Vegas? No one is sure, although with prices back to being reasonable and by that I mean the median price on a home in Las Vegas dropped back to $225,000, property is back to being considered a good deal. New home sales are not fairing so well, but resales are back to selling like hotcakes, well warm cakes anyway. Our prices have dropped on average just under 20% from a year ago. Not great news for anyone who bought within the last two years. Great news for people who are shopping now.

Is this good news or bad news? For the naysayers, they continue to predict that prices are going to continue to plummet. Hang on to your money they say! Buy other places but not Las Vegas! Is that because they want you to buy where they bought so they'll feel good about their investment? I prefer to think that there is a light at the tunnel and now is a great time to buy property in Las Vegas. I realize that there won't be any great rebound in prices any time soon, but there are a lot of great deals on gorgeous properties (and some not so gorgeous). We're back to seeing multiple offers on the good ones, something that hasn't happened in a while.

So for all you naysayers out there who would like to continue to wallow in doom and gloom, casting dark shadows on all who come near, I'll continue to smile and wave from my cloud with the silver lining while wearing my rose colored glasses and drinking from my glass that's half full. I see bright spots in the coming year and believe now is a great time to invest in real estate because after all, especially when it comes to land, God isn't making any more.

Are You Going to Miss The Boat?

No one wants to believe it, but things are heating up in the Las Vegas real estate market. Yes, we're number one in foreclosures, but its also an amazing time to get a great deal.

Last week, I showed a first time buyer couple eight homes, even though I had ten lined up. When we arrived at number 8, they said STOP! This is the one we want. So, I called the listing agent only to learn that 4 other offers were being submitted on this exact property. We are back in the multiple offer stage.

I will be the first to admit that this seems to be restricted to homes listed at $200,000 and under, but with all the bad news floating out there, who would believe we were actually getting multiple offers on properties.

Do all properties deserve multiple offers? Of course not, but there are some outstanding properties for a steal right now. Out of the over 27,000 properties listed over 24% are either in contingent or pending status. I think that's amazing for a bad real estate market. Over 10,000 are listed at $200,000 and under and 29% of those are under contract.

So I'm telling all my clients, if you find the house that works for you or you're looking for a great investment, now is the time to jump. Because there is a 1 in 3 chance the property you like has other people who like it too, and it may be gone tomorrow.

If Vegas Is So Bad, Why Are So Many Properties Selling?

Everyday I hear on the news what a bad market Las Vegas is. This is often repeated in the newspaper. Inventory is up...Prices are dropping...This is not the place to invest...blah, blah, blah.

Yet, I've been working with a number of people who don't agree. We spend time looking for investment condos in the low $100Ks, and I've found quite a few in very nice communities. In fact, I just came across a unit (no its not my listing) in Silverado Ranch. Silverado Ranch is located on the border of Henderson, and close to the Strip. This particular condo offers two bedrooms and tons of upgrades including granite countertops and maple cabinets in the kitchen, hardwood floors, ceiling fans and two master suites with walk-in closets. The community is gated and of course has a sparkling pool and spa.

These deals are out there and they don't last long. The biggest problem I've discovered is buyers who can't make up their minds and then when they've decided to make an offer, the property is already under contract. They've missed the boat. In fact, right now any property in Las Vegas and Henderson that's in decent condition and priced under $200,000 are selling like hotcakes with multiple offers. Huh?!?!?!

It seems these properties make excellent investments because they ..... wait for it ..... cash flow. That means if you buy it for an investment, you can rent it for at least what its costing you or can even make a little money. A 2 bedroom condo in this community rents between $925 and $950 a month. This particular condo will cost approximately $880 a month (including principal, interest, taxes, insurance and HOA fees -- assuming you'd put $20K down on this condo listed for $120K). That's $45 to $70 a month cash flow -- not a ton of money, but not in the negative. It's been quite awhile since we've been able to say that.

So if you've been looking for the right time to buy or jump on the investment, NOW is the time. Don't hesitate to call or email me regarding this or any other investment property I can help you with.

Heather Peck
Rosen & Company West
www.heathersellsvegas.com
702-595-7380
lasvegasexpert@yahoo.com

Lake Las Vegas - An Oasis in the Desert

Water communities are not that unusual in the desert. Even here in Las Vegas, we have Desert Shores and the Lakes over in Summerlin. There's also great views of Lake Mead from many properties in Boulder City. But none of these areas have everything to offer like Lake Las Vegas.

Surrounding a man made lake just 5 minutes from Lake Mead is a variety of gorgeous townhouses, condos, condo hotel units and upscale homes. This area not only has a refreshing private lake for a view, but also offers its own village with shopping, restaurants, and casino for gaming. Lake Las Vegas also offers a number of special events including outdoor concerts, art shows, and ice skating on a floating barge during the winter holiday season. Don't miss the amazing award winning golf courses of The Falls and Reflection Bay.

South shore offers guard gated entry to a number of different single family homes and midrise condos including Mantova and the Tennis Club. North Shore has gated communities comprising of single family homes, condos and townhouses.

Just 20 minutes from the famous Las Vegas Strip, this amazing location seems worlds away from the hustle and bustle of all the activity on Las Vegas Blvd. If you're just planning a visit, you can enjoy accommodations at the Ritz Carlton, Lowes or the condo-hotel units next to the Casino Montelago. Lake Las Vegas is also a popular location of vacation rentals in all type of accommodations.

If moving or visiting Las Vegas, this is one location that needs to be on your visit list. There are great deals in this gorgeous location that won't be there long.

Lease Options - Good Or Bad

Lease options are a great way to buy a house. You don't have to come up with a 20% down payment, lenders aren't going through your life with a fine tooth comb, and you get to try on a house and neighborhood before you buy. Part of your monthly rent is also often applied towards a down payment when you buy. But the best part is if you don't like it, you don't have to buy it.

For sellers, its a great way to get a great tenant. Its a fact that if someone has a vested interest in purchasing the property, they'll take better care of it. They put up some option money upfront which will be applied to their down payment when they buy your house. If they choose not to buy it, the option money is nonrefundable. Even when you credit them part of the rent towards the down payment every month, if they don't buy, they don't get that money back either.

Sounds Great! What's the downside? The downside is only about 20% of lease options are ever completed. Usually its because the buyer couldn't get their credit together enough to actually qualify for a mortgage. But lately its may also be due to the seller possibly losing the house to foreclosure. They may have gotten behind on the payments for the property because the mortgage just went from a low monthly ARM payment to a huge fixed payment and the seller can no longer make the payments because the rent they're receiving isn't enough to pay the mortgage. Its a risk for both parties.

One more thing I want to make note of. Sellers please note that just because someone chooses to lease option doesn't mean they're stupid or can't read and they don't know what is going on in real estate. They're not going to pay more for your house than its worth and they're not going to pay much more than market rent. If the value on your home has dropped in the current market, and thanks to the media reminding us, values are still dropping in some parts of the country (especially here in Las Vegas -- houses dropped over 20% just last year and continue to drop 1-2% a month, more in some neighborhoods than others). That means that buyers will NOT pay $50-100,000 or more than the property is worth when its time to exercise their option to buy. The house will still have to appraise. If the house would rent for $1500 a month under a normal lease, a lease option buyer is not going to pay $2500 a month just for the privilege of lease optioning. It is reasonable to get $100 to $500 more a month (depending on the size of the house) IF you're going to credit that amount to them when they exercise their option. And they probably won't come up with 10-20% as an option fee. 1-2% is reasonable. If they had 20%, they'd buy, wouldn't they?

Would I recommend lease options as a way to buy or sell? ABSOLUTELY, with two caveats.

First, as the potential seller you must understand that the buyer is probably buying this way because they have shaky credit they need to work on and need time to build up a down payment. If the buyer had great credit, they would be buying not leasing. Please be reasonable when lease optioning your property. Its yours and you have a right to lease to whoever you want, but lease option clients are usually better than just renter tenants who don't care about the house or condo they're renting because its not theirs.

For the buyer, you must be diligent and check on the status of the property you're lease optioning so you're not surprised when someone knocks on your door to say the house just got foreclosed on and you have to move. If you want to know how to check this out without paying an arm and a leg to find out, call or email me and I'll tell you how. It's public information and readily available. Also remember, that the option money you put up is not refundable if you don't buy the house or condo. It was a promise to the seller, and now that money is theirs.

If I can help you find a lease option or help you lease option your property, drop me an email or give me a call.

Heather Peck
Rosen & Company West
www.HeatherSellsVegas.com
lasvegasexpert@yahoo.com

The Common Cry In Las Vegas "Are We There Yet?"

On the front page of our illustrious daily newspaper the Las Vegas Review Journal yesterday there was an article titled "Homeowners, you can almost touch bottom." It too rang out the common whine among most Las Vegas property owners "Are we there yet?"

People much smarter than me including the Massachusetts research firm Global Insight and an Ohio bank-holding company National City Corp. showed that us lucky Las Vegas and Southern Nevada dwellers (to use their words) are showing our first move towards undervaluation since they started to following our market in a joint report in 2004. Noted that our market dropped more than 20% last year, and the first quarter of 2008, the median home price in Las Vegas is $232,600 or just 3.1 percent below the value that historical market trends establish as sensible or healthy. What does that mean exactly?

It means that for the first time since 2004, our homes are worth just a little under what they should be or at least would be if we didn't have that outrageous value spike during 2005 & 2006. We are now considered fairly valued. Do you hear that home buyers and investors? We're now back to being a reasonable market based on the things that count like employment opportunities, climate and a great location for family and friends.

The one thing that really stood out for me was when Richard DeKaser, chief economist for National City stated "One thing which is clear is that the majority of Las Vegas' price correction is now behind it." This was reinforced by Ken Perlman, vice president of the Sullivan Group, another group of real estate advisors, noting that "It suggests that buying a home in Las Vegas is becoming more of a reasonable proposition. I do agree the biggest price declines are behind us."

Now no one, not even these experts can agree on how much lower our market will go or when the valuation slide might stop, but one thing is sure, they all agree that "We're much closer to the bottom than the top." Of course everyone has an opinion, some good some bad.

So a deal is a deal is a deal. If you're willing to buy and hold for 5 years, not an unreasonable proposition, this is the time to be looking for a good deal. If you're an investor, and the property will cash flow, get it now while the getting is good and lease or lease option the property. If you're looking to move up or even buy your first house, who wants to move sooner than 5 years anyway.

If I can help you find a property, don't hesitate to call or email me. You can visit my website at www.heathersellsvegas.com or email me at lasvegasexpert@yahoo.com.