On Las Vegas REOs, Banks Frequently Get List Price or More

Posted by Robin Camacho | Current,Resales | Wednesday 18 March 2009 2:27 AM

With an increasing number of REOs coming on the market in the past 90 days, it’s still too soon to predict when prices will stabilize. Sales are down a bit for February, but should rise in March. Having broken the law of Supply & Demand, the Las Vegas real estate market is attracting frontier-type investors — men and women who aren't afraid to brave the risks inherent in the new REO gold rush.

I continue to hear how bad the economy is, but my phones continue to ring off the hook. It seems some days that everyone and his cousin is looking at homes. Quite a few clients are making offers, but those who insist on trying to lowball the banks are walking away empty handed. Out of 1,731 sales of single family homes in February, the banks got less than 90% of list price on only 211 homes. Conversely, the banks got 100% or more of asking price on nearly one-third of REOs sold.

If the home is old or in disrepair, you may be more likely to pick the home up for less than asking price; the same holds true if you are paying cash. But then again, you may have to pay more than asking price; it depends on numerous factors. Since every deal is a unique transaction, I discuss these factors with my client as we structure an offer likely to be accepted.

Sales of existing homes for February were 2,187 as compared to 982 for February 2008. At this rate, I’m confident that sales will remain brisk into the fall. With all the REOs hitting the market, expect to see some more great deals through the next few months, at least.

Prices on Las Vegas Homes May be Nearing the Bottom in Certain Neighborhoods

Posted by Robin Camacho | Current,Resales | Tuesday 22 April 2008 7:30 PM

I’ve noticed a bit of a phenomenon that suggests to me that prices are beginning to stabilize in certain areas. Overall, prices are still dropping while sales are rising. However, we may be reaching the bottom in specific developments.

In December, I sold a nearly-new 3,100 sq. ft. REO to a client in the southwest area for $380,000. This was a great buy, but prices dropped again early this year, and a few more houses came on the market at a lower price. Today, I can’t find this model listed for anywhere close to this price. The most recent sales are $400,000 and above.

I have a client trying to buy a similar home in good condition for $375,000, but the bank countered at $415,000 and is standing firm. We’ve countered the counter at $385,000, and I’m working to educate the listing agent on why the bank should accept our price. We’ll see who wins. Unfortunately for his seller, the agent is taking it personally, as though it’s his home. He’d be doing his seller a favor by sending over the comps, but I can’t seem to get him to understand that.

In January, another client’s offer was accepted on a 3,000 sq. ft. home in very good condition for $249,900. There were similar homes that he could have bought for $245,000 to $255,000. He closed escrow in late March. Now I’m trying to find a home for his friend, but homes similar to the model he bought are selling for at least $260,000. His friend just offered $270,000 for a similar home in good condition, but our offer was rejected for a higher offer!

The only difference in both of these situations appears to be the timing. Same models, same condition, but what was available in December and January—when almost no one was buying—is selling for more today. Too early to tell if this pattern foreshadows a trend. But I’m sensing that prices have stabilized in these 2 communities when you can’t buy the same house for the same price you could 60 days ago. More buyers, more competition…supply and demand at work.

I’ve shown houses and written offers this week for clients from Alaska, Saskatchewan, San Diego and Calgary; but no one from Las Vegas! Investors are scooping up the best deals, as are out-of-state vacation and retirement home buyers. I hate to see so many locals miss these opportunities. By the time they get that it’s time to buy, the houses will cost more.

Is This the Bottom — or What?

Posted by Robin Camacho | Current,Resales | Wednesday 6 February 2008 6:13 PM

I predicted in a Las Vegas Review-Journal article that we were nearing the bottom of the market last November. Wow, did that shake some people up. I received emails from a number of my clients stating that they thought I was crazy, and asking how we could be nearing the bottom when prices were still dropping. Yes, prices are still dropping … but since you really only know that prices are rising after the fact, you've already missed a great opportunity if you wait for statistics that are 30 days old when you see them.

I am more confident than ever that we are at the bottom of the market in terms of sales. For the 11 months ending in October 2007, the number of sales decreased every single month. In November, sales were flat. Based on several factors, I predicted we were nearing the bottom and that, even with an expected holiday slowdown, we would begin to see sales rise early in 2008.

Sales of "resale" homes (single family residences listed on the MLS) in Las Vegas have remained flat for November, December and January. In a market that was devastated by decreasing home sales for nearly a year, flat is good. But it gets better, because pending sales are on the rise. I am going to make another bold prediction: I predict that, barring an apocalyptic event this month (such as mortgage products disappearing), February sales will be higher than January sales.

My clients already know my secret: I don't make guesses based on my feelings. Our research is real-time, not based on another firm's stats released at the end of the month. (My researcher can beat up your researcher.) So while I'm going out on a limb in predicting that February sales will be higher than January sales, I'm merely extrapolating using today's statistics.

It's simple supply-and-demand logic that once demand is rising, prices will follow. Perhaps sales will remain flat for several more months; I predict that they will continue to rise. We are seeing pending sales rising in what are traditionally the worst sales months of the year. In March or April, these sales will begin to show up in the statistics as escrows close.

In other words, the general public will be reading news stories that sales are rising soon. I work hard to keep my viewers on the cutting edge; I don't want our clients and viewers to hear about opportunities once they've passed. When prices begin to rise, I'll let my viewers know. In the meantime, I'm stating it once more: We are at the bottom in terms of sales. How long until the pendulum swings?