One of my favorite high rise buildings in town is the new Panorama North Tower.  Unlike the first two towers, the third tower is positioned so that each unit has a view of the Strip, the HOAs are lower than in the older towers and in general, I think this North Tower has more of a sophisticated vibe than the first two towers.  One problem we have had is the major lenders were reluctant to finance before the project is 51% sold.  I now have a lender, Fiona Brady with Avtek Mortgage who can do mortgages in this tower as long as you can put 20% down and it will be a primary or second home.

Give me a call or e-mail if you’d like to go see the fabulous units at Panorama North.

A recent article in the Las Vegas Review Journal reported on a study by Union Gaming Group which has noticed an uptick in sales of high rise condos.  Those of us who routinely work with the high rise market have also been noticing this.  The bulk of the sales at the moment are the lowest priced, foreclosure and short sale units.  While there is still too much inventory available to say that we have reached the bottom, from my experience, we are very close. 

Perhaps it’s the sunny, high 60 degree weather, but I am confident that a year from now we will look back and realize that this was indeed the bottom of the market.  I don’t expect that we’ll see prices dip much lower in the high rise sector, but I do believe we’ll see more of the over-priced listings getting realistic and dropping their prices down to the bargain price that it takes to get them sold.

I’ve recently been working with clients who are looking at homes in the $1 mil range.  I was fairly shocked to hear the husband of the couple comment about one home with dated carpet that they could move in and live with the carpet for awhile….Not a good idea in my opinion.

When we bought our current home, I wanted a home that didn’t have carpets but the seller had just installed new carpet and it was of a good quality so we kept it.  Big mistake.  Five years later we are getting ready to have it all ripped out.  We found some beautiful Italian porcelain tile that is going to be so easy to maintain and is a perfect match for our colors.  I know travertine is popular but we tried spilling red wine, oil, even the juice from a rare steak on the porcelain sample we brought home and it left no stains at all.  My only regret is that we didn’t do this before we moved in.  I know the seller would have been kicking himself that he wasted money on carpet that we just ripped out but it would have been so much easier than moving the heavy, antique desk and the baby grand piano.

My advise to sellers is have carpets cleaned so they show well but don’t replace them because you may well find your buyer shares my disdain for carpet.  And, buyers who don’t like carpet should never settle for carpet no matter how good the quality because if you don’t like it to start with, you will hate it as time goes by.

Fireworks over CityCenter and MGM

The fireworks did not disappoint this year as Las Vegas entered the new decade.  We were lucky to have an excellent viewpoint from the 43rd floor balcony of a penthouse at Panorama North Tower.  The views from this tower are incredible, in my opinion possibly the best views of our high rise buildings.

Some of my other favorite moments of 2009 were the opening of CityCenter.  Although, I’ve heard clients who are staying there voice complaints about the contemporary (or sterile) design, this project is so large that it is destined to be a major milestone for Las Vegas.  And, there were moments when it was questionable as to whether MGM would be able to get the project completed.  They did, I personally think it looks fabulous and it has employed over 10,000 new employees.  My favorite spot so far is the entry area to the Mandarin.  The bamboo planted in the center with the tall metal and glass buildings makes me feel more like I’m in Tokyo than Vegas.

Other favorites from last year, Jersey Boys at the Palazzo, Santana at the Hard Rock, Kid Rock at the Pearl.  Favorite restaurants, Nora’s Wine Bar and Osteria in Summerlin, Grimaldi’s Pizza in Henderson and NOBU in the Hard Rock.  While there are too many great restaurants and shows to list them all, I would say those were our three favorites.

I received an e-mail early this morning from Dave Liniger, Founder of RE/MAX International.  Dave’s e-mail was especially intended for RE/MAX agents with good news about the new regulations regarding “Short Sales”.  Dave’s e-mail referred to an article with Reuter’s* which summarizes the new “Home Affordable Foreclosure Alternatives Program”.  As the article states, the lending institutions who are indebted to the government (about 85% of our mortgages fall this category) are now required to give an answer on any short sale offer within 10 days.  No more waiting for 60-90 days or even longer to see if the lender will accept the offer.  In addition, the transaction must fully release the borrower from the debt.

With the new legislation finally in place, I do believe 2010 will be the year of the “short sale” with the bargains buyers have been finding in foreclosures now being sold in the pre-foreclosure process as short sales.  For those of you who are upside down in your home you can also click on short sale information for homeowners.  Whether you are a buyer or seller, we do have the expertise to help you determine whether a short sale is a realistic option and help you navigate through the process if it is.  For the complete Reuter’s article, go to http://news.yahoo.com/s/nm/20091130/bs_nm/us_treasury_shortsales.

When Dave Liniger and Margaret Kelly invited RE/MAX agents in Las Vegas to breakfast last week, they encouraged us to discuss some of the challenges in our market.  One of the most common problems we all agreed is getting an accurate appraisal.

Earlier this year, the rules were changed so that most appraisals are ordered through an independent appraisal management company.  The goal of the independent company is to keep lenders and realtors from putting pressure on the apprasier to come up with a value that is higher than it should be.  While this sounds like a great idea, in reality it is not working out so well.  One of the earliest problems was with appraisers being randomly assigned to appraise homes in other areas where they have no expertise.  Recent changes were enacted to help ensure that the appraiser is knowledgeable in the area where the home is located.

The most common problem in the current market in Las Vegas, we all agreed, is that appraisers risk being reprimanded if they come in with a value that is on the high side while there is no reprimand if the appraisal comes in low.  This encourages appraisers to be more conservative than they might be otherwise.  It also doesn’t make sense in a market like our current one where a bank owned property might have more than 40 offers, with many of them being well above list, yet the appraisal comes in several thousand below list.  If there were at least 20 people willing to pay the higher price, it would seem the market is telling us the property is worth more than the appraised value.

For buyers who are making offers on foreclosures, this creates an atmosphere which makes it very difficult for the home buyer who is using an FHA mortgage.  The FHA appraisals are the most stringent and sellers are aware of this fact.  In a multiple offer situation, the seller is far more likely to go with a cash buyer who does not have an appraisal contingency than with the buyer who is financing.  This results in an advantage for investors who are paying cash over those who would be financing their primary residence.

For sellers of homes that are not distressed and that are in much better shape than the distressed properties, this appraisal issue is going to cost them.  With most of the current sales consisting of distressed properties, appraisers generally have difficulty finding homes that have sold that were not distressed.  The well maintained, highly upgraded home is all too frequently being valued at the same price per square foot as the foreclosed property that has the dead landscaping and missing appliances.  Anyone who is considering selling their home should be aware of the most recent comps and the fact that an appraiser isn’t likely to give too much added value to the upgrades and superior condition of their home compared to the foreclosure down the street.  In general, the current appraisal process is likely to keep downward pressure on our home values even after the market has started to stabilize.

After breakfast with Dave Liniger and Margaret Kelly

Dave Liniger, founder of RE/MAX was in Las Vegas yesterday with the “Demand Success, Today & Tomorrow” presentation.  Unfortunately, Dave’s view of the future is much like the opinions I heard last week at the Center for Asset Preservation’s Short Sale Summit in Houston.  In spite of the increased demand, especially in the lower price ranges of single family homes that are listed for less than $200K, we still have more foreclosures ahead.

Many of the foreclosures over the past two years have been sub-prime loans.  The new foreclosures are hitting prime mortgages.  Many of our homeowners have 5 and 7 year ARMs which are now beginning to re-set with payments that are as much as 60% higher than what the homeowner was previously paying.  Liniger said that the option arms have a higher foreclosure rate than the sub prime mortgages.   While the government is pushing loan modifications, 68% of the loans that do qualify for a modification are going delinquent and back into foreclosure within six months.  And, with high unemployment, many of the homes will not qualify for modification to start with due to the lack of income.

On a brighter note, Liniger is hopeful that the congress will extend the tax credit and possibly open it up to all buyers for their primary residence.  With a flood of foreclosures that we probably won’t work through until at least 2012, letting a program such as the tax credit come to an end would be an incredible mistake.