http://www.trulia.com/profile/LasVegasRealEstate411/The latest answers submitted by Paul Francis - Las Vegas Real Estate en-ushttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Yun says 2010 Sales set to increase 15% http://www.realtor.org/RMODaily.nsf/pages/News2009111301 The tightening inventory at all price points will help improve market performance by bringing supply into better balance with demand, but the added sales, particularly on the higher end, will also increase the number and quality of the market comparables used by appraisers to assign valuations. Once appraisals improve, foreclosures will ease, blunting their drag on the market and making it less likely that Fannie Mae, Freddie Mac, and even FHA will need help from the taxpayer. “Then we’ll be set for a durable economic expansion,” he said. Even under the most positive economic scenario, unemployment will remain elevated through 2010. Yun is predicting unemployment to stay near double-digits going into 2011, qualifying this recession, as some economists have, as the "Great Recession.”Mon, 23 Nov 2009 08:58:25 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Nicholas, Is that because you've run out of reasons not to buy?Fri, 13 Nov 2009 07:42:46 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: I did not want to use Zimbabwe as an example since it never was a real economy to begin with... Argentina at one time was...Mon, 9 Nov 2009 15:24:16 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Tim, I've had a lot of these inflation theory conversations in the past six months. The problem is with 10%+ unemployment, a skyrocketing federal debt, increased taxes and the majority of our goods manufactured overseas is that if and when the inflation hits.... necessity items such as gas (already rising if you have not noticed) and other imported items are going to cost an arm and a leg. Kind of tough to pay for on a $1,400 dollar a month max unemployment benefits (for Nevada) ..... much less pay for higher housing costs. The Fed is in a Catch 22 right now..... raise interest rates and we are screwed. Keep adding to the federal debt with investments returning no money and we are screwed.... Do some research on what happened to Argentina in the 90's that led up to their crash to spot similarities... Personally.... I don't see any small businesses having a bright future right now and small businesses are what really contribute to a local real estate market. Big Wall St. bonuses, Adding federal govt. jobs in Washington D.C., McDonalds or Wal-Mart profits certainly don't help Any town U.S.A.....Mon, 9 Nov 2009 14:45:47 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: So far... I have seven e-mails from various lenders / homebuilders announcing the glorious news of the extension / expansion of the $8,000 tax credit.... Just amazing.... Luckily... we have some real estate blogs this time around to tell the story of what really happened and how programs prolonged the pain.. Obviously not going to do us any good this time around... But.. at least when our kids hit the work force and wonder why they have nothing left after working all day... they'll know why. "The Key to Happiness is Having a Bad Memory" So True....Fri, 6 Nov 2009 14:58:38 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Looks like the $8,000 Tax Credit is about to be extended and expanded to current homeowners: http://www.boston.com/business/articles/2009/11/06/first_time_home_buyer_credit_jobless_benefits_both_extended/ I'm already getting bombarded with all of the RE propaganda but.... I'm with Peter Schiff on this one... http://www.youtube.com/watch?v=IRpTaZOunPs And.....Fannie Mae is getting into the landlord business.. http://www.youtube.com/watch?v=5wFamjmNUNIFri, 6 Nov 2009 08:21:13 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Chicago, Crook County... Same Thing... "--There are about 1,200 taxing bodies throughout the county.." I just find that hilarious.... until I remember that the same system has now moved to the Federal level in D.C.Mon, 2 Nov 2009 14:45:54 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Rosalie --- when a tenant becomes a homeowner the property they rented becomes vacant. Case in point.... I just picked up two more listings where the tenants moved out to take advantage of the $8,000 first time homebuyers tax credit... (And I'm working on two more with a similar situation.) The owner now can't rent the homes at a rate to cover the mortgage and expenses.... besides that... he is buried over $100K on each property so he is making a business decision to short sale the properties. FOR EVERY ACTION... THERE IS AN EQUAL AND OPPOSITE REACTION.... I'm all for buying homes but Restoring our economy starts with financial responsibility from Main Street to Washington D.C.... an economy that is fueled by debt is unsustainable. Just ask California, New Jersey, and the City of Chicago....Mon, 2 Nov 2009 13:57:35 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: It's Unconstitutional for a State to print their own money. @ Carl -- No surprise... taxes in Illinois are always going up in one form or another. Good luck with the increase in the already high property taxes. http://www.chicagotribune.com/news/chi-cook-county-taxesoct21,0,5535095.story "--There are about 1,200 taxing bodies throughout the county.." And everybody wonders why they are broke.... LOL!!Mon, 2 Nov 2009 13:26:08 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Interesting Part 1 of a five month investigation into Goldman Sachs: How Goldman Sachs Secretly Bet on the Housing Crash: http://www.thestate.com/local/story/1008510.html "In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting. Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies. Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk." Anybody want to buy some Mortgage Backed Securities?Mon, 2 Nov 2009 11:50:01 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Hmmm... Back during the bubble and when new oil drilling permits in OK were skyrocketing... I was looking at apartment buildings in the OK City area. I came across one pretty decent 45 unit apartment building where the two bedrooms were going around $450 a month... Owners were too stubborn though... The price was just a little too high and after looking at their rent roll, schedule E and reviewing the building... I suspected the owners were cooking the books and I lost interest. @ Steve, Correct me If I'm wrong... but an acre of rural land outside of OKC is going for around $3,000+ an acre so whoever you are renting from has a pretty crappy ROI. Do they have any other leases on the land? As for anybody buying a Primary Home for a "Tax Deduction".... Send me $100 and I'll send you back $50 which is a better return then that "tax deduction" you get for mortgaging yourself to death.Sat, 31 Oct 2009 10:32:01 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Carl, Slim to none... I think it was already admitted that both of those home loans were done as "Primary Homes" for Senator Dodd.... http://www.breitbart.com/article.php?id=D99N143G3&show_article=1 "Feinberg also told House investigators that Countrywide counted both of Dodd's' homes as primary residences. "He was allowed to do both of those as owner-occupied, which is not allowed. You can only have one owner-occupied property. You can't live in two properties at the same time," he said." I always thought that was mortgage fraud myself...Tue, 27 Oct 2009 13:11:41 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Nicholas, Do you have the link to the original article? What's really interesting about the Option Arms coming up to reset is that the vast majority of the lowest payments are less then paying rent. From people who have contacted me with these types of loans considering a short sale... I often have to point out that if they do it now... they will be paying more for rent then their minimum payment "option". (Of course... once I point this out... they tend to decide to wait until Judgement day.) This is going to be a little different then the Subprime loans resetting... more often then not... the payment before the reset on the Sub Primes were higher then paying rent anyways. In other words.... that big wave of Option Arms coming down the pipeline represents a whole wave of homeowners who are soon going to see their cash flow situation change .... and not in a good way. If it makes anybody feel any better... A house oversight committee has finally issued subpoenas concerning Countrywide's VIP "Friends of Angelo" program. (It only took well over a year...) http://lasvegasrealestate4u.com/2009/10/27/countrywide-vip-program-under-fire/Tue, 27 Oct 2009 12:20:49 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: LOL! Wow... it took 3,977 answers to get to that brilliant tidbit of information. Case Closed....Thu, 22 Oct 2009 15:21:09 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Nice read Carl, It's a nice summary of many issues that have been brought up on this thread for the past several months including one of my last points ... the drop in rental values is causing a new squeeze on the investors that were breaking even.... but now have a negative cash flow to go along with a property that is worth far less then what is owed on it. An investor recently told me that at this point... it's a business decision. Wave 6?Wed, 21 Oct 2009 19:11:49 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Nice post Charles... However... are you saying that prices will remain stable after the end of the First Time Homebuyers Tax Credit AND the rise of interest rates after the Fed stops buying up Mortgage Backed Securities? Let's not even get into all of the option arms coming up to be reset... Just looking at the Big Picture... Just picked up two more short sales since the sellers loans are going to be re-setting next year and her tenants have not paid the rent for several months... She already had a negative cash flow and when the tenants stopped paying... it has put her in a major bind. Unfortunately... she still has to go through the process (and pay the money) to evict them...Tue, 20 Oct 2009 23:59:09 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Instead of blanket statements such as rent is a waste of money... don't you think we should be using Rent vs. Buy Calculations to show a savings in cash flow to compensate for the risk of ownership? Tax benefits... spend $100... get back $34 at the most? Brilliant. It takes far more then just ownership to make a house a home... I've seen $200K homes and $1 million dollar houses... figure that out. Ownership certainly is nice but it needs to be for the right reason and not based on blanket sales statements. Blanket sales campaigns have wrecked this country into making people think they need to get debted to death to be happy... And that's the real travesty.... Bernie Madoff was selling something too..Mon, 19 Oct 2009 22:24:44 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Nicholas, And the reason why many of the owners of those option arms are still in the homes is because the minimum payment is equivalent or cheaper then rent. It will be interesting when they reset to see what happens. You are right.... the vast majority of the option arms are only being paid the minimum. On a similar note... Here is a blog post I did concerning the Tarp Oversight's panel recent report regarding foreclosures, loan modifications under the Hope for Homeowners Programs... http://lasvegasrealestate4u.com/2009/10/09/tarp-oversight-panel-releases-report/ The actual report (linked to in the blog post) is quite a read full of great charts... I highlighted some things I found interesting including the suggestion that the mortgages of the unemployed are paid. Regardless... our Representatives are well aware of what is taking place if they bother to read the report. (Of course... the ones in 2005+ were ignored and look where we are...) Strange... but I have not come across much reporting by the mainstream media on the report that was released.... I guess Journalists don't understand it... All the news seems to be concentrated on Health Care like that's the reason we are where we are... Great new report by Peter Schiff --> http://seekingalpha.com/article/167101-american-austerity-is-about-to-begin Welcome to the Banana Republic ---> http://politicalticker.blogs.cnn.com/2009/10/18/gregg-u-s-could-be-on-path-to-a-banana-republic-situation/ Take the Congressional Report and the above two posts and come to your own conclusion as to what is wrong...Mon, 19 Oct 2009 09:01:09 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Four new listings coming... three by the same owner: Property one -- tenant has taken a beating in their business and found something cheaper. Current rental index will be a negative cash flow. Property two -- City Center worker that got laid off and found something cheaper to move to since they have lost their $39 an hour job and now have to rely on their spouses $16 an hour job for all of their expenses. Property Three -- Another City Center worker that will be done in December and who knows what will happen. They make over $40 an hour and there are obviously no new projects to go to. Property four -- Owner has been coming out of pocket $800 a month since they bought the property in 2006 and are tired of it.... especially since they just took a cut in pay. The point of the matter is.... the whole re-set process is still well under way and Taxpayer dollars being used to artificially attempt to keep artificial values up have been a complete waste in delaying the inevitable.. The couple of trillion plus would have been much better served in doing something that creates investments and jobs... much like Hoover Dam. Once all of the subsidies stop and a true market is allowed to exist... then we'll get back on track towards a true recovery..... Until then... you are playing with fire.Wed, 7 Oct 2009 21:55:02 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Spam sucks BTW.. Ryan... final answer as of today.. MAN up and buy some real estate after all of the subsidies expire. This country was built on men with kohanas that did not rely on the Govt. giving them something to make a decision. (Yeah.. I said MEN.) If your cash flow is better buying then renting... buy it up and ignore the pansies who follow the trail with plenty of opinions but no true success in their life. None of the naysayers can sell you anything good in life because they've never accomplished anything in their own.... Cash Flow positive is what matters.....Mon, 28 Sep 2009 02:54:05 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Nicholas, Everything is ok...... Nothing that another trillion can't fix... http://www.youtube.com/watch?v=at3MNu8BRwQSat, 19 Sep 2009 14:17:19 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Nicholas, Socialism works until it runs out of money.... Here is what is happening to that "Shadow Inventory" I've mentioned in the past: http://www.latimes.com/business/la-fi-malibu-wells11-2009sep11,0,1323579,full.story I think I'm going to start a real estate comedy tour... "You know your in real estate if...."Fri, 11 Sep 2009 11:23:04 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Nicholas, http://www.dsnews.com/articles/extra-innings-pending-for-homebuyer-tax-credit-2009-08-27 (And it won't add a dime to the federal deficit. Wink-wink....)Fri, 11 Sep 2009 10:52:07 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Steven and Frank, Here is an article from January of 2005 for you to consider before you think politicians are the answer: http://money.cnn.com/magazines/fortune/fortune_archive/2005/01/24/8234040/index.htm It's also well documented Government entities knew that risks were being taken with lax lending standards... Summer 2006 FDIC outlook --> http://www.fdic.gov/bank/analytical/regional/ro20062q/na/2006_summer04.html "Since 2003, strong home price appreciation and declining affordability have helped drive growing demand for nontraditional mortgage products that can be used to stretch home-buying power. Aided by new computer models and an easing in lending standards, many lenders have accommodated this demand by expanding the variety of nontraditional mortgage products offered while also extending loans to borrowers with less-than-stellar credit histories. As a result, by 2005, nonprime lending, comprised of subprime and Alt-A (low- or no-documentation) loans, accounted for about 33 percent of all mortgage loan originations, up from almost 11 percent in 2003." Translation: Instead of allowing the real estate market to cool off and home values to level off... lenders came up with some new programs to add some gas. If it all implodes, Who cares? The taxpayers will pay for it. How do you fix the problem? You have to understand what created the problems to begin with. This is the best summary I know of that goes over the REAL Problem: http://www.thislife.org/Radio_Episode.aspx?episode=355 (Click on Full Episode.) Translation and Implications: While the intentions may have been noble with home ownership for everybody... what it did was create more buyers with access to more money with little risk. More buyers resulted in higher home values. Lax lending standards and new exotic loans allowed people to buy more home then they could have afforded with a traditional loan. Instead of home prices leveling off.... Prices go up even higher... (Simple Econ 101 -- higher demand equals higher prices.) Home builders built away and as fast as they can since their profit margins were outrageous... lots of jobs, lots of money circulating around and lots of equity to tap into that homeowners were more then happy to do. (Aka... using the home as an ATM machine.) Meanwhile... home inventory is increasing with all of the new homes for the new demand, high rises are built, etc.. etc.. The Money spreads throughout the economy and businesses such as those that sell $4.00 coffee all of a sudden look like genuises. They expand and start building everywhere. More jobs are created... so... let's go out and build some more homes since there are some pretty cool new loan programs where all you need is a good FICO score and a statement of what you make. Bartenders all of a sudden become Millionaire loan officers pushing new programs creating more debt. Home Values go up even higher. Everything is great... people are feeling rich since their "investment" in home ownership has all of a sudden doubled. WHOO HOO... let's go out and spend some more money in the economy, rack up the credit cards, buy new cars and take trips to Las Vegas where we can buy $400 bottles of $50 Vodka and get a VIP table. YAY! Everything is great... Until... People who got into homes with Sub Prime mortgages start seeing their ARMs reset. They can't afford the higher payments, stop spending money in the economy, try to sell their homes (along with everybody else at the same time) and the cracks start to spread. Homes start getting foreclosed on and the giant pool of money starts to dry up. Builders stop building... jobs are lost and $4 coffee is all of a sudden not a staple. Money stops flowing into the rest of the economy.. more jobs are lost and home values continue to drop. True demand for homes starts to show.. the increased inventory contributes to the problem since all of a sudden the choice of homes is a dime a dozen. Home values in areas such as Las Vegas, Arizona, Florida and California start to implode. How do you fix the problem? The problem was created years ago with cheap credit. If you want home values to get back to where they were... you need to put back in place all of the bad loan programs, erase fico scores, erase all of the debt and start all over. Of course... it would eventually come to an end again and we would have to start all over in finding a "solution". In other words... it was one Very Bad Business Plan that Failed. Do you understand the problem yet? Throwing trillions of dollars of borrowed money at the problem is only transferring the pain for another day that is going to be far more painful for EVERYBODY. Franks Ideological dream of a collective group with their own special interests working together should start with everybody taking some time to learn about what went wrong in the first place.Sun, 6 Sep 2009 01:09:27 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Nicholas is getting really good at this! --- Quote--- "Look for a peak in mortgage delinquencies in your area (yes that data can be found, look harder). Remember that during this deep recession the cure rate (the loan goes from delinquent to current) is poor." ------- End Quote Yes... the information is out there since it is public record and buyers should know this information or take the time to look it up before running out and buying. My last three posts on my http://lasvegasrealestate4u.com/ blog cover this.... I don't know about other areas but our area has been experiencing a decline in sellable inventory (priced right due to being an REO or Short Sale) for the past several months primarily caused by the foreclosure moratoriums from earlier this year. For the past several months we've had bidding wars going on for the good properties and buyers actually purchasing homes for more then they are appaising for. The banks are making the buyers come up with the difference and not reducing the prices. (Obviously they know they can get away with this since there are so many buyers chasing after the good ones.) Some people might not care because they are buying a "home", need to buy, etc.... which is fine. For people that do not need to buy and are only buying because they think they are going to get rich in real estate... they might be in for a rude awakening. Regardless.... more "distressed" inventory on the way. Could prices remain stable? Possibly... possibly not. There are enough underlying factors in place right now that suggest prices will not be going up anytime soon. Maybe a temporary blip ... once again... due to the foreclosure moratoriums and the $8,000 tax credit for homeowners that have not owned for the past three years. These measures have been effective in stopping the free fall of home values but we have to wonder if it's just making it a slow decline and making it take even longer to truly become a healthy real estate market. And that's why it can be frustrating for people who really look at all of the factors when it comes to real estate. Sure... it's busy, blah, blah, blah. But AIG stock has been going up also... it certainly does not mean to buy it.Thu, 3 Sep 2009 17:21:19 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: The effect of the foreclosure moratoriums are now starting to rear it's ugly head in Las Vegas with the number of Notice of Trustee's Sales being recorded : http://lasvegasrealestate4u.com/2009/09/01/clark-county-nevada-foreclosure-report/ Notice June and July numbers... basically another 60 days from these filings at a minimum until the bank puts them up for sale. Hopefully I don't have to explain Econ 101 on what was created... and is being created. I wonder how many other markets are seeing the same thing?Tue, 1 Sep 2009 18:31:29 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: OOPS! -- I did mean Victor. Re-posted with the correction. Thanks! @ Victor, I'll give you the benefit of the doubt on your last answer where you quoted me out of context based on the following: 1) You either did not read the specific question that Steven asked and I was answering... 2) You did not read my full answer and what it was pertaining to.. otherwise you might have picked up that listing short sales are 95% of my business. (You certainly should have picked up the two examples I used of short sales that I had approved.) In the future... Please do not quote me out of context. If you would have taken the time to fully understand what was actually being discussed... you would be fully aware that I am completely aware of what a short sale approval is. Please... take the time to read what is actually being discussed before answering. (And certainly before quoting somebody out of context.) Thank You.Mon, 31 Aug 2009 16:58:12 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Nicholas, I'll give you the benefit of the doubt on your last answer where you quoted me out of context based on the following: 1) You either did not read the specific question that Steven asked and I was answering... 2) You did not read my full answer and what it was pertaining to.. otherwise you might have picked up that listing short sales are 95% of my business. (You certainly should have picked up the two examples I used of short sales that I had approved.) In the future... Please do not quote me out of context. If you would have taken the time to fully understand what was actually being discussed... you would be fully aware that I am completely aware of what a short sale approval is. Please... take the time to read what is actually being discussed before answering. (And certainly before quoting somebody out of context.) Thank You.Sun, 30 Aug 2009 22:15:10 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: My nomination for the new Car Czar.... http://www.break.com/index/top-gun-motors.htmlFri, 28 Aug 2009 22:01:34 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @Steven, I've never heard of a lenders written approval of a short sale with a rent to own option. It kind of flies in the face of what a short sale is to begin with. (Sellers with a true hardship that need to sell... but can't sell the home for what is owed on it and needs the lenders approval to get out from their mortgage aka contract, release the lien and allow title to be transferred to a new owner.) However... anybody who actually does a lot of short sales will tell you there is nothing set in stone when it comes to short sales since lenders have different criteria. I'm not going to say it's impossible since we've closed some short sales that fly in the face of the many rumours you'll hear / read online about short sales. Personally... I think the person who asked that question was just confused with a lease to own option for a home that is worth less then the mortgage. BUT... and follow along here.... Today I had a short sale approved where the buyers and sellers had to sign addendums stating there was no agreement between the parties allowing the sellers to stay as renters or move back in later on down the road. Last month I closed one where the seller stayed and is now the tenant without having to even pack their toothbrush. Two different servicers/lenders. It depends on the loan servicer / secondary market investor on what they will allow... or not. AND... I've come across hard money lenders that can be quite creative. Short sales require a lot of out of the box thinking which is one of the reasons they are despised by so many people. (No set rules that all servicers must follow.) The correct answer to that question is... Who is the lender/servicer and is the rent to own option for the lenders approved short sale in writing? All lender short sale approvals and the terms are in writing. (I would really like to see that approval because it would be a first for me.) It certainly makes you think though... but nothing I would even contemplate specializing in.Fri, 28 Aug 2009 21:28:15 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: I just find all of this fascinating.... http://dealbook.blogs.nytimes.com/2009/08/27/fdics-insurance-fund-dips-20/ "Despite some improvement in the financial markets and broader economy, credit loss rates reached a record high in the second quarter. Over all, banks charged-off $48.9 billion, or 2.55 percent of assets, or nearly twice the levels the industry reported last year." So let's think about that... Last September the Financial System was about to end as we know it... This year banks have charged off nearly double the amount that they did last year but everything is showing signs of improvement? Does this mean that this time next year we can get $9,000 cash for our clunkers and a $16,000 tax credit to buy a home? Hmmm.....Thu, 27 Aug 2009 11:13:31 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Joan, You Asked: "I am curious. Do you look at tax cuts the same way you look at the first time homebuyer tax credit or the cash for clunkers program? Its all intended to "stimulate". How effective any of these programs are in the long term, who knows?" I don't consider an incentive for being rewarded for taking on risk (investing) the same as a flat giveaway of borrowed/printed money to get into more debt. We might as well do a "Dough for Dumps" program as Peter Schiff mocked: http://seekingalpha.com/article/157686-forget-cash-for-clunkers-try-dough-for-dumpsThu, 27 Aug 2009 11:09:01 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Add another 7 to 9 Trillion to that www.usdebtclock.org and figure out what that is going to do to the future of real estate. http://www.foxnews.com/politics/2009/08/25/administration-pegs-long-term-deficits-trillion/ Higher taxes and/or higher interest rates.... something is going to have to eventually give.... The capital gains tax looks like it might be going back up in 2011 which will discourage investing in real estate. Since the Capital Gains Tax has not been mentioned as of yet... here is an overview: http://www.american.com/archive/2009/august/capital-gains-tax-an-argument-for-repeal Currently... hold an investement property for more then a year and when you sell it for a profit... you pay a maximum of 15% tax on that profit. (Unless of course you delay it for another day with a 1031 Exchange) It looks like that could be going back up unless the Bush tax cuts are extended... lowering the reward for taking the risk in investing in real estate. (Keep in mind... the lowering of the capital gains tax in 2003 attracted a lot of investors to real estate.) Anybody in Ground Zero for the foreclosure crisis will tell you that investors are keeping the lower end properties from being even lower. Cut into their potential profits and it may discourage the truly savvy investors from sticking around. Just another equation to consider.... (If anybody in the current administration or the leaders of Congress had any clue about real estate... they would waive the capital gains tax for anybody who invested in real estate with a minimum holding period ....you'd see some real change, real quick....)Tue, 25 Aug 2009 14:15:36 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: If this debt was used in our Debt to Income ratios.... How many Americans would qualify for a home loan? http://www.usdebtclock.org/ Can anybody calculate what we each owe on that interest alone? Somebody call Suze!Tue, 25 Aug 2009 05:05:15 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Ummm guys... The Govt. is already involved in rentals ... it's called Section 8 Housing. http://www.hud.gov/offices/pih/programs/hcv/about/fact_sheet.cfm They don't actually manage the properties but there are guidelines including property owners submitting an application for suitability approvals and a local agency insuring that the rent is at fair market value. Does it affect rental prices? Ummm... it probably keeps them a little higher then they should be. Anyways... concerning the new proposal being considered... The Govt. or banks for the most part don't actually manage the foreclosures they have now... the vast majority of them are managed by service companies. It really would not be hard for them to do this new program and turn the management over to approved Property Management companies.... Basically from what I understand ... the home is taken back by the lender through the foreclosure process and the former owners submit an application to stay and rent the home back. Approved Property Management companies awarded the contracts manage the properties and send the checks in to the FDIC insured lenders that are the proud new owners of the homes.... essentially becoming single family real estate investors that will rent them out until market values come back to cover their losses. Now... if you would have read the previous links that I supplied... you would have read the spin where it stated that taxpayers would not be paying for this program. From the article: "As Baker sees it, giving the foreclosed the right to rent their home at a market rate for a long stretch (perhaps five to 10 years) is a win-win. The landlord (an investor or bank) gets market rental income, the homeowner isn’t uprooted, property values aren’t further depressed by foreclosure fire sales, and taxpayers aren’t asked to bail out lender or borrower. In mid-July a Treasury official confirmed the administration is mulling the idea. The House has supplied traction too, recently passing the Neighborhood Preservation Act, which would permit FDIC-insured banks to lease back homes to folks it has foreclosed on. Did you catch that artful spin? This isn’t solely about helping the foreclosed; it’s about protecting your neighboring home’s value." I guess they forgot where the Tarp money and the continued money comes from to keep some certain financial institutions doors open. And as I suggested.... do you think that homeowners strapped in overpriced mortgages but don't want to move are going to take full advantage of becoming tenants for far less? And who is going to pay for those losses and then essentially be financing lenders to become single family home investors? And the issues involved on how this manipulates the market can certainly be debated. For one... the taxpayer will certainly be paying for it and the argument that it saves the taxpayer in the form of keeping artificially high home prices... high... is complete (insert what you want here).... if you truly have an understanding of what went wrong in the first place. As we should have learned... high home prices / mortgages debted people to death and eventually created all of the problems with the economy we now see. Now.... you have to ask yourself the question with no other considerations taking place.... Would you rather have a $500,000 mortgage or a $250,000 mortgage for the exact same home? Do you think you'll be better off with the $500,000 mortgage or the $250,000 mortgage in 10 years? And that is the debate... should we let the market correct and be better off in the long run... or keep throwing billions of dollars trying to correct what was a broken system to begin with... and pay for the consequences later? I could go on... but I'm sure Roberto can add to this since he's on the same page.Mon, 24 Aug 2009 06:53:05 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Actually... the foreclosure to rental program is backed by HUD. I've got a friend who owns a PM company applying to be a management company qualified to manage these types of properties. I don't know the exact details.... http://www.foreclosure-support.com/wp/financing-and-mortgage/federal-government-to-buy-foreclosure-houses-for-rent-0818919.html Another Take: http://moneyfeatures.blogs.money.cnn.com/2009/08/10/fixing-foreclosures-with-a-right-to-rent/ "As Baker sees it, giving the foreclosed the right to rent their home at a market rate for a long stretch (perhaps five to 10 years) is a win-win. The landlord (an investor or bank) gets market rental income, the homeowner isn’t uprooted, property values aren’t further depressed by foreclosure fire sales, and taxpayers aren’t asked to bail out lender or borrower. In mid-July a Treasury official confirmed the administration is mulling the idea. The House has supplied traction too, recently passing the Neighborhood Preservation Act, which would permit FDIC-insured banks to lease back homes to folks it has foreclosed on. Did you catch that artful spin? This isn’t solely about helping the foreclosed; it’s about protecting your neighboring home’s value." Of course... this article is written by a journalist with little clue about real estate... (as usual) and thinks this will have no effect or cost the taxpayers anything. However... think it through. A homeowner has a $400K mortgage on a home worth $200K. They come across this program and know they can stay in the home if they just let it go to foreclosure and instead of having a $3,000 mortgage can stay and rent the home for $1,300.... What do you think this is going to do?Fri, 21 Aug 2009 13:30:55 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Yes... this did start over a year ago but due to the nature of the question ... and that real estate has been changing significantly with all kinds of twists... it's been an entertaining (sometimes educating) thread when current news about real estate is shared. (Of course... there are and always will be the generic blanket answers that it's a great time to buy... ) As for taking advantage of the $8,000 tax credit... falling prices and high property taxes are not going to help out too much.... unless you need the cash from the tax credit now which also tells me something. Property taxes just don't seem to go away -- even if you don't have a mortgage. And... the $8,000 tax credit does not last forever so you have to wonder what is going to happen when it ends. (I don't think car sales are going to be very good after Cash for Clunkers ends.) Counties with the highest Property Taxes: http://www.forbes.com/2009/01/22/taxes-homes-property-forbeslife-cx_mw_0122realestate_table.html And for states with high corporate income taxes... I don't see a very positive future for new growth... (Jobbie-jobs.) http://www.taxfoundation.org/files/bp58.pdf Sure... you can throw a couple of billion of taxpayers dollars to build a road or two but those jobs do not last forever. Just some thoughts...Thu, 20 Aug 2009 13:34:28 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: All of those appraisals and BPO's really worked well from 2004 through 2007!! @ Steven -- take CRS 204 http://www.crs.com/Education/287?cid=rs204 for a good understanding of applying some basic calculations to figure out the returns on cash and comparing them to alternative investments. Then Jump in and take a CCIM 101 course --> http://www.ccim.com/content/ci-101-financial-analysis-commercial-investment-real-estate If you get a chance... take the "Does it Pencil?" class with this guy --> http://www.stilltraining.com/coursepreviews.html He teaches how to use the right leverage to maximize returns.... He also teaches Internal Rates of Return for flips... Calculating the Returns on Equity so you know when it's time to sell, etc..etc... good stuff. BPO's and Appraisals are only for CURRENT market value --- they certainly do not automatically mean it's a good financial investment. Just ask all of the speculators who were buying $400,000+ homes in Las Vegas that could only be rented out for $1,200 a month. They all appraised.... Even the ones with "Investment" appraisals performed for the extra $100... Today I was out with one of my investors.... we went through about 13 homes and narrowed it down to three properties in good locations and condition. One with an 8% cash on cash return, one with a 9% cash on cash return and one with a 12% potential cash on cash return... (20% down and calculating low rents..) Which one did we write the offer on? I have two properties in escrow right now... similar price ($280K, $289K), similar size, similar but different neighborhoods. One appraised for $50K over the purchase price and one appraised at purchase price. The one that appraised at the purchase price actually commands a higher rent.... So.. I have one that some Appraiser tells me is worth more... but the other will get $200 more a month in rent. (The one that can get $200 more in rent a month has higher rated schools.) Which one is worth more to an investor? FOR NORMAL BUYERS -- if buying a home saves money over renting a similar home in the same area.... YOUR purchase is now actually an asset since you are saving money. Use conservative rental rates and if you have to move.... at least you will have the safety net of maybe renting it out without coming out of pocket each month to cover the difference. Unfortunately...... that's why there are so many foreclosures, etc... The people who bought when the calculations were WAY out of whack can try short selling, loan modification (good luck), deed in lieu of foreclosure...etc... or just walking away. Throwing Billions of Dollars of Taxpayers money at trying to correct what were horrendous fundamentals in the first place will eventually create problems elsewhere... I can tell Roberto certainly gets it... which is the reason some of his statements may be a little harsh but I certainly understand where he is coming from.Tue, 18 Aug 2009 23:33:08 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Steven, There is no Kelly Blue Book for investment real estate because it's much more complicated then a year, make and model. It's a combination of specific neighborhood calculations, financial calculations and knowing the neighborhood. It also involves each investors particular needs, their desired rates of return, credit scores, financing options, etc.. etc.. etc.. Throw in location, lot sizes, conditions... etc.. etc.. etc.. and it's pretty safe to say that no two transactions are the same. The closest thing to the Kelly Blue Book for Real Estate is the local MLS and Tax records. Even then... you need to know how to comprehend the information given.Tue, 18 Aug 2009 14:37:25 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: And we interrupt this little spat about Govt. Subsidies with an important message from a sponsor: http://online.wsj.com/article/SB40001424052970204908604574334662183078806.html "The FHA now insures $560 billion of mortgages—quadruple the amount in 2006. Among the FHA, Ginnie, Fannie and Freddie, nearly nine of every 10 new mortgages in America now carry a federal taxpayer guarantee. Herein lies the problem. The FHA’s standard insurance program today is notoriously lax. It backs low downpayment loans, to buyers who often have below-average to poor credit ratings, and with almost no oversight to protect against fraud. Sound familiar? This is called subprime lending—the same financial roulette that busted Fannie, Freddie and large mortgage houses like Countrywide Financial." Combine that information with the First American Corelogic second quarter report (BTW ....Carl in NJ....a highly reputable source ) .. http://www.loanperformance.com/infocenter/library/FACL%20Negative%20Equity_final_081309.pdf I think I'm going to set up some odds and take some bets on future home values in select markets.... I see some suckers to fleece.Tue, 18 Aug 2009 14:12:11 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Stephen, Concerning Mark to Market -- the articles you are pulling up pertain to other types of assets. I'm specifically questioning the changes to the accounting rules as it applies to real estate. For example... The percentage of Homeowners under water: http://www.bloomberg.com/apps/news?pid=20603037&sid=adBYDzUMt68k Might as well read "the number of loans that Banks are sitting on where the asset is worth less then the loan". What are the banks currently reporting the real estate values at for the loans they have on them? I bring this up because I know of one certain regional bank that has a couple of hundred million in a loan for a major project. They've been reporting the value of that project at a much higher price then the loan that is on it and have been called out... with three lawsuits recently filed by law firms representing pension funds basically charging that the books were cooked. (This was done before the Mark to Market accounting rules were changed.) Why is all of this important with home values? Well... the new accounting changes may not be telling us the whole story of just how healthy banks really are. Some of the recent rah-rah cheerleading about some certain financials on the rah-rah channels are not reporting the changes made to the accounting rules. Think of it this way... if you owned a pawn shop and you were loaning out money more then the items were worth... you would soon be broke. While it would not be obvious at first... eventually the people pawning the stuff just would not come back to pay off the loan. Whatever they put up for collateral would eventually have to be sold... if you loaned out more money then it was worth... obviously you will either be sitting around with a bunch of junk or you'll sell it for a loss..... and eventually be out of business. (Unless you have a bunch of buddies that have access to trillions of somebody else's money and can just keep tapping into it to keep you in business. ;)...) So... that's the big question concerning the shadow inventory the pros know about.... and the short sale fiascos where some certain banks are not processing them even though the sellers have stopped making payments, are financially strapped and fully qualify under a hardship for a short sale. Under the new rules.....Are the current home values of $175,000 being reported on their books or the $375,000 (loan) home value? The changes suggest that the banks get to use their discretion of what they use to report. Just questioning why the banks may be holding inventory off of the market, delaying the foreclosure process and failing miserably with short sales. (Sure... the backlog is a great excuse... two years ago when this all started.) Or... are they doing this so the market is not flooded with even more inventory resulting in lower prices? By the way... Concerning the inevitable Commercial Real Estate Collapse: This was a bank in Nevada that did a lot of commercial real estate loans for strip mall development, etc.. http://www.lasvegassun.com/news/2009/aug/14/community-bank-nevada-handed-fdic/ "The bank struggled for the past year as the commercial real estate market fell in Las Vegas. The bank was heavy in commercial real estate and construction loans. Many of its loans were at least 90 days overdue, accounting for $261 million in potential losses. It also had $112.9 million in foreclosed property, as of March 31." This one is only going to cost the FDIC around $781 Million according to this: http://www.istockanalyst.com/article/viewarticle/articleid/3419481 There were other banks closed... but this is a bank where I was wondering when the commercial real estate market was going to start rearing it's ugly head and collapsing banks heavy into commercial real estate.Mon, 17 Aug 2009 12:11:59 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Since it has not been brought up in the 14 months since this thread started... What are opinions on what the Mark to Market accounting changes have done for Banks and Real Estate holdings since they were changed this past April? Just in case some of you don't know what this is: http://en.wikipedia.org/wiki/Mark-to-market_accounting Easier Reading as it pertains to Banks and mortgage backed securities... http://www.nytimes.com/2009/04/03/business/03fasb.html "During the financial crisis, the market prices of many securities, particularly those backed by subprime home mortgages, have plunged to fractions of their original prices. That has forced banks to report hundreds of billions of dollars in losses over the last year, because some of those securities must be reported at market value each three months, with the bank showing a profit or loss based on the change. Bankers bitterly complained that the current market prices were the result of distressed sales and that they should be allowed to ignore those prices and value the securities instead at their value in a normal market." So... since the majority of sales taking place today are "distressed sales" ....does that mean current home values should be considered "normal"?? What are the banks currently using to define the value of their holdings? In our market... it's come to the point of where we do not care who is selling it... if it is a REO, Short Sale.. etc.... the value is the value. Are banks still counting yesteryears values in their valuations? Could that be the reason why they are SO SLOW (especially one certain very big bank that happened to purchase one very big lender) in approving short sales and even non-responsive, why there is shadow inventory in the form of bank owned homes not up for sale, why some homeowners have not even had foreclosure proceedings filed on them even though they have not made a payment in months, etc?? Which "Normal" market are they using for the accounting of Home values for all of the option arms due to reset in the next couple of years they are currently sitting on? If accounting procedures were the same as this time last year... would the earnings reports be telling a different story?? Hmmmm....Fri, 14 Aug 2009 21:39:25 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Lessons were either not learned or it's desperation mode... http://online.wsj.com/article/SB10001424052970204908604574334662183078806.html "The FHA now insures $560 billion of mortgages—quadruple the amount in 2006. Among the FHA, Ginnie, Fannie and Freddie, nearly nine of every 10 new mortgages in America now carry a federal taxpayer guarantee." "Herein lies the problem. The FHA’s standard insurance program today is notoriously lax. It backs low downpayment loans, to buyers who often have below-average to poor credit ratings, and with almost no oversight to protect against fraud. Sound familiar? This is called subprime lending—the same financial roulette that busted Fannie, Freddie and large mortgage houses like Countrywide Financial." In case anybody forgot... this same subprime lending helped to cause this: http://www.reuters.com/article/newsOne/idUSTRE57C0M620090813 "U.S. home loans failed at a record pace in July despite ongoing federal and state programs to avoid foreclosures, which have severely strained housing and the economy."Thu, 13 Aug 2009 06:39:43 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: On the lighter side.. ;) http://www.thepeoplehistory.com/1930s.html Median Price of a home in 1930 = $7,145 Median Price of a home in 1939 = $3,800 This is great... A "Better Housing" News flash... http://www.youtube.com/watch?v=KlkOPAa4Mao "Ahhh... but maybe they can" ... LOL! ;)Wed, 12 Aug 2009 01:07:12 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: As mentioned concerning the Short Sales debacle..... http://www.usatoday.com/money/economy/housing/2009-08-04-short-sales-mortgages_N.htm At least it's finally being acknowledged.... over a year late... but I guess it's better then never.Thu, 6 Aug 2009 14:35:40 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Nicholas, That's what I was thinking... somewhere on the Strip. LOL!! "Unfortunately I think that you missed the paradigm shift in American culture that occured 4-5 years ago which pushed everyone into the "real estate investor" category." Very well stated Nicholas.Thu, 6 Aug 2009 10:59:57 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Terry, You are right... I have no idea how it was in the Bay area so your perspective is interesting. We have our same stories in Las Vegas that have made the headlines... Regardless though... the opportunites were created from lowering lending standards and new exotic loan products to keep the prices going up... No money down??... No Problem! No verified Income? No Problem! Home values up but lending is slowing down? Lower the standards even more to keep it going... Home values Still going higher but things are slowing down? Let's make up these really cool little things called option arms so people can still qualify! YAY!!! The economy is great!!! The abuse was created as a result of the systems put in place.... not the other way around. Sorry... but I have to keep bringing this up... This is from the Chief Economist of the FDIC in September of 2006: "The historical experience clearly implies that a widespread price bust remains an unlikely outcome for two reasons. One is that historically price busts are typically associated with severe local economic distress that arises from outside the housing sector itself. While recent macroeconomic performance has benefited a great deal from expansion in the housing sector, the prospects appear good that the solid growth in jobs and incomes that has occurred in recent quarters will continue to be supported by other sectors of the economy, including business investment, exports and nonresidential construction." http://www.fdic.gov/news/news/speeches/archives/2006/chairman/spsep1306.html I can write off and laugh at the typical trade group nonsense but that statement coming from somebody in that position at the time it was made.... makes me shudder.Wed, 5 Aug 2009 22:59:44 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Yes.. making decisions on what has been seen for the past six months and relying on mortgage professionals... ...You can be in the house of your dreams sooner then you think... http://www.dailymarkets.com/economy/2009/03/06/pictures-of-sacramentos-tent-city-unfiltered-and-unspun/ Make sure you have a backup plan: http://www.nationalhomeless.org/publications/crimreport/CrimzReport_2009.pdf Pay Close Attention to Page 36....Wed, 5 Aug 2009 22:25:17 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Terry... Sounds like CW / BofA to me... Deutsche Bank did not get the memo about home values... http://www.calculatedriskblog.com/2009/08/negative-equity-16-million-homeowners.htmlWed, 5 Aug 2009 14:57:37 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: LOL!! I think we just saw a perfect example of what naysayers are really harping about... Historically... average national home prices have a 3 to 5% appreciation rate... (Here is a fantastic link on the subject ---> http://www.freeby50.com/2008/05/more-on-historical-home-appreciation.html -- make sure you click on the Excel file for the Shiller study.) A $100,000 home.. on average... even using the higher 5% appreciation rate will be worth $162,889 in 10 years. (1948 to 2007 Historical Appreciation rate at 4.87%.... it's probably a little lower today... don't you think?) Of course... there are all kinds of factors that can influence the short term actual appreciation rates such as lax lending standards, innovative loan products, etc... (Inflation.. see the 1970's appreciation rate and compare that to the inflation rates of that era.) I think this FDIC link from the summer of 2006 says it best... LOL!!! http://www.fdic.gov/bank/analytical/regional/ro20062q/na/2006_summer04.html And then... for some nice reading... make sure you read this Press Release from 11/05/2002 http://www.fdic.gov/news/news/Press/2002/pr11702.html "The home equity extraction provided consumers with an estimated $90 billion in extra cash last year, and $50 billion in the first half of 2002. Cash-outs have been an important source of funding for today's economy, with the monies going to finance new consumer spending and repay higher cost debt." (AKA...Credit Cards) Now you know how we got out of the last recession and put it off to deal with for another day.... Here is some more entertainment for your Tuesday afternoon reading from September of 2006... http://www.fdic.gov/news/news/speeches/archives/2006/chairman/spsep1306.html "The historical experience clearly implies that a widespread price bust remains an unlikely outcome for two reasons. One is that historically price busts are typically associated with severe local economic distress that arises from outside the housing sector itself. While recent macroeconomic performance has benefited a great deal from expansion in the housing sector, the prospects appear good that the solid growth in jobs and incomes that has occurred in recent quarters will continue to be supported by other sectors of the economy, including business investment, exports and nonresidential construction." Of course... Historical performance is no Guarantee of Future Results... LOL!! And Terry... no offense but sub-prime and option arm loans came into flavor when people could not afford tradional mortgages and the down payments that used to come with buying real estate. The charts direct from the links provided in the FDIC statements provided clearly shows that. Deflecting the current crisis as to blaming it on Mortgage Fraud is better directed to the uneducated masses looking to blame somebody... Really now... what % of all loans from 2002 can be tied to Mortgage Fraud? http://www.fincen.gov/news_room/rp/files/MortgageLoanFraudSARAssessment.pdf Page 9 of the report states there were 37,313 suspected cases reported in calendar year 2006... while 44%+ increases from previous years are certainly nice shocking statistical percentages to use... what % of total home loans in 2006 were reported of suspected fraud? Here is a report from the Federal Reserve that covers only 80% of the institutions that were providing home loans for 2006: http://www.federalreserve.gov/pubs/bulletin/2007/pdf/hmda06draft.pdf Page 12 -- a reported 27 Million Home loan applications were filed... So... a quick calculation show a big whopping less then .01% of all loans in 2006 were suspected of Mortgage fraud. Even if it was 5%... it's hardly enough to blame the crisis on mortgage fraud... Basically... it comes down to a sign me up for a no risk bet fully endorsed by the Federal Government.... Resulting in higher prices and higher property taxes that went right back into the local governments cash strapped during the last recession.... So much for saving it for a rainy day. Don't get me wrong..... I'm certainly all for investing in real estate and think it's far better then investing in cooked books... But I also want to keep it fair and balanced backed by some real research instead of some scripts picked up from the latest real estate sales training guide.Wed, 5 Aug 2009 14:49:31 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Nicholas, I shudder to think where you stayed in Las Vegas with what you described. If you would have contacted a pro instead relying on those paid sites for your information.. your stay would have been much more enjoyable. (LOL!) Regardless... it looks a lot better then it did this time last year... Besides... it's been over a 100 degrees... not the ideal time to visit Las Vegas except for cheap room rates. @ Terry -- The others can correct me If I'm wrong... but I think the real dissent concerning real estate is due to all of the Govt. Subsidies on borrowed money and tampering with the market that are creating a big "What If" for the real estate market and much like 2006... the powers to be are just playing right along as if everything is normal... which it certainly is not. It's safe to say that important data is incomplete right now... which could certainly be complete... and should be. If you are doing short sales... you know the games going on. You know what lenders are really dragging their feet and doing nothing for months... even if the owners have stopped making payments. And you probably know the ones that won't do anything at all if the owners keep scraping by to make their payments but need to relocate and can't stay... You probably also know how many homeowners are trying to do loan modifications and are in a wait and see mode... etc... http://www.dailyfinance.com/2009/08/04/obama-tries-to-shame-banks-into-speeding-up-mortgage-modificatio/ (I certanly do not approve of this tactic either...I prefer just not recommending these same banks/lenders for any future business.) Or maybe... I just see all of this taking place since I'm at ground zero for the crisis... not sure. Roberto certainly sees it but he's in a similar market as mine. Regardless... I better be quiet before I get turned in and the guys in the black suits come knocking on my door. LOL!! http://www.americanthinker.com/2009/08/citizen_informants.html http://www.whitehouse.gov/blog/Facts-Are-Stubborn-Things/ No wonder there are so many anonymous posters out there! LOL!!Wed, 5 Aug 2009 11:24:23 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ JR Business of the future? http://www.lasvegasweekly.com/news/2008/aug/21/matching-homeowners-who-have-empty-houses-homeless/Tue, 4 Aug 2009 20:31:38 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Read Roberto's three points VERY Carefully... It would be a great time for the NAR to establish some credibility by bringing this to everybody's attention instead of ignoring it... http://www.reuters.com/article/GCA-Housing/idUSTRE56U5YZ20090731?pageNumber=2&virtualBrandChannel=0&sp=true "It appears that there is a significant amount of shadow inventory in the form of bank owned properties, which will continue to grow with the rising in delinquencies," he said. It can take about 4-6 months for a house for be out of foreclosure and ready for sale. Torsten Slok, senior economist at Deutsche Bank in New York, said about 1.8 million homes are currently in foreclosure and they will continue to weigh on home prices at least for the rest of this year. "Foreclosures are creating a shadow inventory and this is the main problem in the housing outlook," he said. "Had it not been for foreclosures then the housing market would probably already have recovered." Ummmm.. duh. But they are there.. As for the Foreclosure Moratoriums put in place this past winter from November to March... all of these homes would already be hitting the market but for the most part... have not. For those of us that do not have our heads buried in the sand... we know they are there. We just don't know how many of them there are... But hey... we have some great studies on current appraisal issues! http://www.ritholtz.com/blog/2009/07/more-nar-nonsense/ I also find it curious that there are no hard numbers out there on how many people have purchased using the $8,000 tax dollar giveaway. Anybody with any numbers on this? What happens when it expires in 12/01/2009?? Since the housing crisis is over... I guess there will be no need to extend it? I'm sure that when the majority of Option Arms recast in the next couple of years... everything will be A-Ok. http://www.calculatedriskblog.com/2009/05/new-mortgage-loan-reset-recast-chart.htmlTue, 4 Aug 2009 14:30:44 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: @ Carl, It's all about the art of Negotiating.. When you come across as too abrasive... you lose. ;) As for multiple offers... for the really GOOD properties available that are a GOOD deal.... there are multiple offers. One neighborhood in Summerlin I track --> http://www.realestatewebmasters.com/blogs/svrpaul/8130/show/ .......Suggests that values in that neighborhood are starting to rise. Look at the one that was on the market for 8 days, closed in 45 days... listed for $289,800 and sold for $325,000 on 06/24/09 It tells you what is going on... (Of course... these homes were in the high $400's during the peak.)Tue, 4 Aug 2009 13:22:53 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Steve, I only had 5,000 characters to work with... I could have gone on... But... it certainly would have been in the same context and I certainly would not have used the extremely biased philosophical ideological source you chose to link to. I probably would have gone more this route (if I wanted to get into philosophy) and quoted passages from "The True Believer" by Eric Hoffer http://en.wikipedia.org/wiki/Eric_Hoffer considering the current circumstances. http://en.wikipedia.org/wiki/The_True_Believer "Hoffer argues that mass movements such as fascism and communism spread by promising a glorious future. To be successful, these mass movements need the adherents to be willing to sacrifice themselves and others for the future goals. To do so, mass movements need to devalue both the past and the present. Mass movements appeal to frustrated people who are dissatisfied with their current state, but are capable of a strong belief in the future. As well, mass movements appeal to people who want to escape a flawed self by creating an imaginary self and joining a collective whole. Some categories of people who may be attracted to mass movements include poor people, misfits, and people who feel thwarted in their endeavors." Sound Familiar? I'll stay away from the debate you bring up concerning Lance Corporal Joe Glenton and the ideologies of that source.. .. On a lighter note... you've got to be laughing at this! http://www.thedailyshow.com/watch/wed-july-29-2009/home-crisis-investigation While it is a spoof since Mr. Geithner leased his home out several months ago for $7,500 a month... it's certainly entertaining. http://finance.yahoo.com/news/Geithner-faces-sluggish-apf-15419661.html?.v=3 It appears that he is taking a loss every month with loans totaling $1.25 million and property taxes of around $27,000 a year. Maybe he got one of those "Friends of Angelo" deals from Countrywide? http://online.wsj.com/article/SB124588865553750813.html http://themortgageinsider.net/mortgage-news/countrywide-friends-of-mozilo-and-obama.html So... would it have been better to buy it for $1,575,000 or rent it for $7,500 a month? Remember... it's a great time to buy! (Especially If you can get the right financing...LOL!!)Tue, 4 Aug 2009 12:46:00 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Yes... do your history. I suggest you go back farther then 2005 though.... Here is a start for you... http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx Now think about what is going on today with a federal deficit out of control... future debt obligations that can't be met without raising taxes.... and the value of the dollar slowly devaluating as investors pull out seeking better investments. http://www.ibtimes.com/articles/20090803/gold-rises-to-seven-week-high-on-weaker-dollar.htm EXCEPT... this time we have no manufacturing base to help get us out... Instead of financing countries we are being financed... We rely on borrowed money for cheap debt instead of having a 20% savings base that we saw after WWII.. Today.. Govt. Economists think that a 6% savings rate is too high and are pushing programs that promote more debt such as the "Cash for Clunkers" program, 125% re-financing options for "help for homeowners", $8,000 tax credits for people who can't save money for a down payment.....and we STILL have not learned our lesson about little to no down loan options and too much debt. http://4.bp.blogspot.com/_pMscxxELHEg/SghkMj7_XNI/AAAAAAAAFOE/8r1iqveqYyU/s320/PersonalSavingLong.jpg We have more CZARS then Imperial Russia... http://www.washingtonpost.com/wp-dyn/content/article/2009/07/29/AR2009072902624.html, the only growth in the GDP is Government Spending (on borrowed money), Cap and Trade is coming, Universal Health Care is being pushed while Government programs/obligations such as Medicaid and Social Security are mismanaged and pretty much broke... yet we need to add more Government Programs that are going to run in the Trillion dollar + range? While California goes BK, they are praised as a model to follow. Instead of allowing failing companies to fail and new companies to start... we are rewarding companies with taxpayer dollars. Meanwhile... the heart and soul of America... the small business owner... is getting creamed. Would if the Federal Govt. bailed out Horse Drawn Vehicles in the early 1900's when the public was screaming for Gas Powered Horseless Carriages? William Durant would have never founded General Motors --> http://en.wikipedia.org/wiki/William_C._Durant. Henry Ford http://en.wikipedia.org/wiki/Henry_Ford would have never have been able to raise private capital to revolutionize an industry.... ...and Tesla Motors based in California ... http://www.teslamotors.com/ ... has to compete against failed business models receiving Billions of Dollars in Aid. Yep... do your history. Billions of dollars of homeowners equity was taken out of homes from 2001 through 2007 and spent on a bunch of worthless junk with no future value... http://4.bp.blogspot.com/_pMscxxELHEg/Scj-vk4_KVI/AAAAAAAAE3o/uMkhuOAViqA/s320/MEWactiveQ42008.jpg And people are still trying to figure out What Happened?? http://www.calculatedriskblog.com/2009/05/mew-consumption-and-personal-saving.html Yes... do your history. Here is a good summary right here: http://www.usatoday.com/money/economy/housing/2008-12-12-homeprices_N.htm • Optional payments on principal —In 2005, 29% of new mortgages allowed borrowers to pay interest only — not principal — or pay less than the interest due and add the cost to the principal. That was up from 1% in 2001, according to Credit Suisse, an investment bank. • No verification of income —Half of mortgages generated in 2006 required no or minimal documentation of household income, reports Credit Suisse. • Tiny down payments —In 1989, the average down payment for first-time home buyers was 10%, reports the National Association of Realtors. In 2007, it was 2%. An interesting artilce... but fails to mention the consequences of all of the Inventory Created by Homebuilders during the boom when everybody needed 7 homes. http://bloomberg.com/apps/news?pid=20601110&sid=an17jgiccivM Yes... do your history. The same people who helped get us here are the same people in charge of trying to solve the problem. Brilliant.... Need I continue? Perhaps we'll start up home loans for the Unemployed? http://www.calculatedriskblog.com/2009/07/unemployed-over-26-weeks.html Oh, Oh.... http://www.nytimes.com/2009/08/02/us/02unemploy.html?_r=1 And to Cheer Everybody up on this Beautiful Tuesday Morning: http://www.thedailyshow.com/watch/wed-july-29-2009/home-crisis-investigation Yes... do Your History. Learn something about economics while you are at it and study demographics. Maybe we can have some thought on what to buy instead of generic (tired) statements that it's a great time to buy anything! (Just use me to buy... LOL!!) http://www.ritholtz.com/blog/2009/07/analyzing-the-analyzers/ Yes... do your history... http://www.time.com/time/world/article/0,8599,189393,00.htmlTue, 4 Aug 2009 09:38:31 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Steve, That would be a nice graph if it was 2005. Unfortunately... it does not show what has happened since then. Second... it's national data which is really worthless for making a decision for the local market when there are so many other factors to consider such as employment, etc. For example... a factory closing down in a small town in Indiana is going to have a negative impact on housing in that community no matter what the charts say about what has already happened. You should understand that being from Oklahoma... where there are small towns that thrived during the oil boom but have still not recovered from their hey day since the oil bust to this day... over 20 years later. That's the problem with national data being reported.... sales are through the roof for areas that have already collapsed in price such as Las Vegas, certain parts of Florida, Arizona and Southern California. However... I can pick apart some data from other markets behind in the correction and see some really bad things taking shape.... things that I've already seen for our market and had to experience which are not pretty. Current market snapshot From www.RyanWardRealEstate.com for Atlanta: Active Listings 45,871 Pending Sales 6,396 Homes Sold Last 30 Days 2,321 Absorption Rate 19.7 Months Activity Index 7.17 Months From www.Prupref.com in Chicago: 147,668 listings currently available for sale according to the site... I can't find any other current stats for Chicago on a quick glance... That looks pretty ugly to me... considering our (much smaller) market has more closed sales in the past 30 days (3,774) then Atlanta, Pending/Contingent sales are at 13,225..... and current inventory of only 11,724 for single family, townhomes, and condos... (Numbers above include Henderson, Las Vegas and North Las Vegas...All numbers exclude High Rises) I'm sure I could find more (current) data on the other major markets.... I just used Ryan's site because it's one of the better ones for Atlanta real estate. Regardless... without getting into this too much further... there are major markets out there that are just now starting the big correction.... and other markets that appear to have hit bottom. Some cities/states are raising taxes for budget short falls... which will result in people who can afford to move... moving... which will eventually have an impact on real estate prices. National charts from 2005 really don't mean too much in August of 2009... except to show that a major correction needed to take place. I certainly don't mind seeing negative information about real estate... just make it current information please.Mon, 3 Aug 2009 09:25:27 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Well... I've been on vacation but I must admit the activity from this thread coming across my phone has been entertaining to read to say the least. We went to one of our favorite places where I've been eyeing the real estate there for a good 4 years... prices have gone down somewhat but not enough for me to bite. Too much of a big "what if" with all of the government subsidies in place. I'm also very concerned about the foreclosure moratoriums that were put in place and the delay this caused in all of the homes that SHOULD be Bank Owned Homes available for sale right now but are just now in the foreclosure process.... And.. for anybody who really knows the market there is no doubt that banks are holding on to properties and not putting all of them on the market at the same time. Check your county tax records and do some research... I certainly have. Reminds me of the Diamonds market... Since I specialize in Short Sales... I also know of one particular BIG bank that is just basically doing nothing right now when it comes to foreclosing and/or working on short sales. It's quite curious since I do have some clients that have not been able to make a payment since December of 2008... we've had it in escrow since March and this particular bank is just wasting money... along with several other lenders. And that brings me to something that Carl from Chicago provided with this link: http://www.dailyfinance.com/2009/07/28/were-countrywides-loans-to-lawmakers-simply-legal-bribes/ What was not shared in that article is that Senator Chris Dodd got a Primary Loan for his home in Connecticut and Washington D.C. -- courtesy of Countrywide. http://www.breitbart.com/article.php?id=D99N143G3&show_article=1 "Dodd received a break when Countrywide counted both his Connecticut and Washington homes as primary owner-occupied residences" "Feinberg also told House investigators that Countrywide counted both of Dodd's' homes as primary residences." "He was allowed to do both of those as owner-occupied, which is not allowed. You can only have one owner-occupied property. You can't live in two properties at the same time," he said. "Normally, Feinberg said, a second home could require more equity and could have a higher mortgage rate." Ummmm.... I handle a lot of Vacation homes and there is no "Could" involved. It's either a Vacation Home or a Primary Residence and the loan application clearly asks this question. In other words... it's Mortgage Fraud. From the Article: "—Dodd heads the Banking Committee and is a major player in two big areas: solving the housing foreclosure and financial crises and putting together an overhaul of the U.S. health care system. A five-term senator, he is in a tough fight for re-election in 2010, partly because of the controversy over his mortgages." Yeah.... that gives me a lot of confidence. Here is some more interesting reading for you to ponder: http://www.portfolio.com/news-markets/top-5/2008/06/12/Countrywide-Loan-Scandal Regardless... for the most part I'm bullish on real estate since alternative investments are weak to say the least. When you really look at the books and understand what the devaluation of the dollar from the printing up of money is creating and what effect this has on the markets you'll have an understanding of why the stock market has been going up. Regardless... Naysayers are failing to provide proof of better alternative investments... ...And agents are using tired and old sales lines that quite frankly... savvy investors think are ridiculous. For some added entertainment for those Shouting "You've Got to Buy Now": http://news.yahoo.com/s/ap/20090801/ap_on_re_us/us_lonely_highrise I'd like to throw in that there are high rises all over the place that have turned into rentals as the developers hold out for prices to return to levels where they can afford to sell them. In other words.... there is no shortage of real estate available for sale and there won't be for quite some time. My message is somewhat cryptic but: Higher Interest Rates will collapse the real estate market The End of Government Subsidies are going to kill sales Unemployment is still rising If everything was great... 125% refinancing options to save homes would not even be considered For the most Part... banks are still failing miserably when it comes to handling short sales. People in charge of solving the foreclosure crisis are the same ones who helped create it. Bottom line... if you have cash and have representation that can show you what your returns or savings are... consider real estate. If you can't make it past a paycheck and have nothing to put down... concentrate on something else such as straightening out your finances.Sun, 2 Aug 2009 02:59:10 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: John the Bruce, Good question. I've got somebody relocating to Las Vegas who I've been working with for quite some time while they have had their property up for sale. It took eight months... but they finally found a buyer. Now the jitters come in as they are planning their relocation to Las Vegas... a thousand plus miles away. Some doubts are coming into their mind concening the price they sold their condo for... $496,000.. a high state income tax.. moderate property taxes and a monthly association fee of over $400 a month. They told me that their market value has gone down about $50K from the highs... when I asked what I could rent that same condo for.... it was around $2,000 a month. NO Brainer to me.... GET OUT while you can. Government subsidies can't last forever..... especially when it's borrowed money. Their Vegas property will be half the price....bigger, newer, association fees at a quarter of what they pay now for three times the amenities, very reasonable property taxes and NO state income tax. And... they'll have easy access to an airport where it's pretty easy to travel anywhere they want to. (They are semi-retired and do a lot of travelling on their off time.) Financially.... it's a brilliant move for them. @ CARL.... get into buying up them short sales (the right ones and the right way) and you don't even have to run an ad... You are a cash buyer.... you can get some really good deals with tenants in place. ;-)Fri, 17 Jul 2009 08:07:25 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Carl in Chicago, I'm a licensed Broker in Illinois.... I'm currently #41,000 something on the Cubs Season Ticket list.... maybe once I get those season tickets I'll move back to Chicago and handle your real estate investments. By then... maybe global warming (LOL!!) will have made the winters more bearable.Fri, 26 Jun 2009 13:39:01 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Hello Nicholas, I'm not missing the point at all.... In Las Vegas we've seen first hand what happens when "creative destruction" is allowed to take place and prices are not tampered with and allowed to reset. Keep in mind that much of what you bring up has already happened here.... and from some of my friends in Phoenix, Florida and some parts of California... has already happened there. All of the current programs came out long after our troubles started... People are buying here again because of the prices. Yes... we have million dollar bank owned homes. And yes... New home builders are building homes here again. And REALTORS in these areas certainly know what a cut in income is since the vast majority of us have experienced this and we've certainly made personal spending changes. Except for a handful of RE Agents listing homes for the banks... we've all taken a major cut in our income. I do short sales and have been for almost a year now..... we are working twice as much for half the pay. A 50% drop in home values means our 2.5 to 3% is half of what it was during the peak false economy days. So... when people talk about a cut in pay... we CERTAINLY know what a cut in pay is. Unemployment did not cover us during the year and a half where there was only 1 sale for every 5+ agents. And I call it a false economy because that is what it was due to the inflated prices and all of the refinancing and equity withdrawals that took place during the boom...... Mortgage Equity Withdrawal chart provided previously shows that. The money taken out was spent on new cars, clothes, flat screens, IPods, Playstations, etc.. etc... That money is obviously gone and so has all of the spending in the economy. I'm certainly not discounting what you are providing... because I certainly believe (know) that there are many areas of the United States that will eventually see what we have already seen and it won't be pretty. My Bank contact for Georgia/Florida is telling me what is currently taking shape in Georgia and it's ugly. They are in Commercial Lending and they will be the first ones to tell you that they built WAY too much and the regional bank they are with is in panic mode. As I told them well over a year ago... it was not a matter of if... it was a matter of when it will happen to them. I am a firm believer that until everything resets back to before all of the lax lending and everybody own a home social experiment that started in 2002, it's going to be ugly. After the Tech bust and 9/11 -- prices should have dropped but due to tampering with interest rates and rubber stamping loan applications.. prices went up, up, up and now we are in a credit crisis as people got stretched out and buried in debt. It's really not that complicated.... let the reset happen and the recovery will come much quicker. We see it here... sales are taking place left and right and properties priced right sell in a matter of days. (Obviously unless somebody has been under a rock for the past three years --- knows that prices in Las Vegas have been decimated from the highs.) Now that prices are extremely affordable... homes in our area are selling again. This results in home inspectors, appraisers, lenders, repairmen, Real estate agents and title officers all getting paid -- making money again and spending it in our local economy. New home builders are starting to cautiously build homes again. (Like the old days when they did not build until they had a contract in hand.) You know... doing short sales I've seen first hand what happens when somebody gets out of a huge mortgage that was sucking away all of their income and rents something comparable for far less until they get their debt paid off..... they become much happier people. In summary... the issues you bring up are a cause of what already happened. What happens tomorrow is taking shape today. As far as the deflation / inflation debate... of course prices for cars, homes and other items have come down in price because people can't afford them or are no longer interested in being in debt up to their ears. You have to lower the price to sell them... The inflation will eventually come though due to the federal policies in place. You can't just print up a bunch of money / sell a bunch of debt and flood the economy with "stimulus" packages and not expect any future consequences. There are no charts to show it.... yet.... because it is happening now. Let Americans reduce or increase their cash flow the right way and it will sort itself out. The process to get there might be temporarily ugly but the long term benefits will be priceless.Fri, 26 Jun 2009 13:34:15 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: All good points Nicholas, At this point I'm not following any of that very closely anymore... all I know is that it's easy to purchase real estate with a positive cash flow that easily beats out the returns I could get in the bank, municipal bonds, T-Bills, annuities or under my mattress. On top of that... somebody else is paying off the debt. And yes... that's even discounting the rent to get them rented fast because we obviously know that everybody is looking for a good deal to reduce their cash outlay. Regardless.... real estate is and always has been meant as a long term investment... all of the charts tracking real estate on a month to month basis as if it's a stock is ludicrous. It's all about cash flow.... In my last example for the $135K home that is currently getting $1,200 a month... If the positive cash flow is applied to paying down the loan... it's paid off in about 12 years. Will the home be worth zero in 12 years? Will the monthly rent be zero in 12 years? Will the rent drop so low that it does not cover the PITI? (When I first moved to Vegas in 1992 a one bedroom apartment near UNLV was $600 a month.) As I think I've mentioned before.... I have a client who has over 60 homes paid off in Southern Cal that they started purchasing in the '70's. (They have a tenant who has been in one of the houses for 27 years and they've only raised the rent $50 on them when they replaced the carpet... LOL!) They don't care what they are worth tomorrow or next month or even next year.... they just collect all of that rent each and every month and enjoy their lives without too many worries right now... This whole crisis has been created because people think too much about what something is going to be worth tomorrow instead of being able to calculate where the best return on your actual cash is today. Take advantage of the low rates and create the right leverage and let somebody else pay off your debt and build a future. Or save money on rent and purchase something where the mortgage is going to be less then rent.... (Even without the tax deductions.) And if you can't do that where you live... then move to Florida, Las Vegas or Arizona where you can... ;)Fri, 26 Jun 2009 02:37:23 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Voices Member, Las Vegas real estate in 2004 was up 42%..... it certainly did not mean to buy it. I am a fan of silver but the stockpiles are not generating any postive cash flow and it does not pay the bills unless you sell it. The coins are pretty though.Mon, 22 Jun 2009 18:51:57 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: It comes to a point where price/perceived value is a moot point... Just because everybody was buying in '05 does not mean it was a good time to buy... and just because not everybody's cat and dog is buying today does not mean it is a bad time to buy. Case in point... deal just closed with a tenant in place paying $1,200 a month for a $135K home built in 2006 in a desirable area of Las Vegas. (Rent could actually be a 100 or two higher but we want to keep this tenant..) $40,500 down generates a positive cash flow before taxes of $460 a month or $5,520 a year.... Could you tell me where else you can get a 14% return on your cash?Mon, 22 Jun 2009 10:31:07 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Nicholas, The current storm brewing up concerning interest rates has to do with the loss of interest in purchasing govt. debt due to the obvious reasons. (Too much spending... too much of a deficit.) When the Federal reserve has to print money to buy U.S. Treasury Bonds it's only a matter of time... Not only will rates go up... but the dollar loses it's value. The Zimbabwe mess you mention is actually HyperInflation due to printing too much money and essentially made their currency worthless. http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe Following some of the overseas business channels shows that Europe and Asia (specifically China) see better opportunities then U.S. Treasury debt and the dollar to put their money.... rates need to rise to attract investors to pay for all of these programs that are not going to generate any real return on the investment in my opinion. (Not anytime in this decade anyways....) .... And questions are being asked as to how it's going to be paid back when we have massive obligations such as Social Security and Medicaid right around the corner. (2009 is the first year the more is being paid out in Social Security then is coming in.) Good luck raising taxes when people are making less money. Keynesian economics is what the current government is attempting to get out of the mess. http://en.wikipedia.org/wiki/Keynesian_economics "Keynes argued that the solution to depression was to stimulate the economy ("inducement to invest") through some combination of two approaches: a reduction in interest rates and government investment in infrastructure. Investment by government injects income, which results in more spending in the general economy, which in turn stimulates more production and investment involving still more income and spending and so forth. The initial stimulation starts a cascade of events, whose total increase in economic activity is a multiple of the original investment.[2]" I could buy that theory if the Government was spending money on programs that would really generate some income. Unfortunately... we (the U.S.) do not have the money to artificially get us out of the bottom of the Austrian business cycle --> http://en.wikipedia.org/wiki/Austrian_Business_Cycle_Theory "The theory views business cycles (which they also call credit cycles) as the inevitable consequence of inherently damaging and ineffective central bank policies, which cause interest rates to remain too low for too long, resulting in excessive credit creation, speculative economic bubbles and lowered savings.[2]" Here is a nice collection of articles on chinese sentiment that have been brewing this year: http://markschinablog.blogspot.com/2009/03/what-to-do-with-chinas-massive-foreign.html Read all of those articles and form your own opinion of what is taking place. I have mine since I've been watching gold/silver and oil go up in price. I've also been following some of the overseas business networks and there are plenty of articles out there with opinions on the path the U.S. has been going on.... which basically in the end the message has been to get out of treasuries and the dollar while you can. Yes... some inflation is good... kind of like if it would have happened in 2004 to put a halt to the buying/credit frenzy that started up to put it in check. (Austrian Business Cycle -- Low rates for too long creates a credit bubble.... But hey... we have to keep selling all of these houses because they always go up in price!) Unfortunately..... right now is not the best time for interest rates to go up when some parts of the U.S. are just now experiencing the correction. For areas that have been decimated in value, buy and lock in the rates now because there is little to ZERO evidence that rates are going to get better. For areas just now starting to experience the correction... I would be expecting some very bad things coming. The Fed can only print money and artificially keep rates low for so long until the Zimbabwe effect takes place.... and the growing sentiment that I see is that U.S. Treasury Bonds are not the best place to be... Think about all of the borrowed Money being spent on programs such as GM, bailing out California, Performing Arts centers, etc.... Does anybody really think that these are going to generate a return on the money? If you do... I have a bridge to sell you. The only way Keynesian economic policies work is for projects such as building a Hoover Dam, offshore drilling, etc.... things that will actually someday have a return on the money invested. Unfortunately... economic policy today has too much money being used on programs that benefit loyal supporters.Fri, 5 Jun 2009 15:39:37 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: For us.... it's often far cheaper to buy then rent so it's kind of a no brainer --- especially with the incentives. Higher interest rates are on the way though.... along with a flood of new foreclosures due to the foreclosure moratoriums that were put in place so it's a real possibility that prices could continue to fall. We have people running around here acting like there will never be another home for sale and buying anything... I just say be selective and don't get caught up in emotional bidding wars... Anyways.... as far as the U.S. Economy... take a look at this post from Calculated Risk: http://www.calculatedriskblog.com/2009/05/mew-consumption-and-personal-saving.html Take a look at the U.S. Savings Rate chart tracked from 1929 and then the Mortgage equity withdrawal chart that shows all of the equity taken out of homes during the boom. (Or... why we built a Starbucks on every corner and built more Mega Resort Casinos in Vegas during the 2002 through now period then the previous two decades combined.) Add that data to all the BK's, (which by the way... is not a lagging indicator since all of those people will not be buying anything anytime soon), Credit card defaults taking place (highest on record) and all of the people that have been foreclosed on in the past year or two.... and all of the homeowners currently in default or in the foreclosure process (1 in 8 from the latest reports from the Mortgage Bankers Association) http://www.reuters.com/article/bondsNews/idUSN2832609020090528 In other words.... there are a lot of people that can't buy even if they want to. (Sadly... I just came across a buyer who has no credit because they've paid everything in cash for the past 5+ years, have no debt and they have no trade lines and can't get a home loan??? What a wonderful system the banks have created.) And now.... I'm coming across homeowners who have done a loan modification where the actual mod. is just a temporary interest rate reduction and the unpaid principal is just added on to the balance for a couple of years. (Basically.... extending/delaying the inevitable and one particular homeowner already told me how they were going to play that out which makes me wonder how many others out there are just going to do the same thing.) And then... let's throw in the out of control spending and deficits taking place by the Govt and we have a catastrophe in the works when it comes to any future means of raising capital without printing money.... I do say buy.... but only if you will be saving or making money from the alternative choices available and not thinking that prices are going to go up anytime soon. It's a lot more complicated though then just saying "big discounts" from the inflated prices, everybody is buying, low interest rates, etc... etc... Which is really not too different from 2004 when "everybody was buying", interest rates are low, real estate always goes up in price and we are running out of land....Wed, 3 Jun 2009 15:08:43 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Oh Boy... http://news.yahoo.com/s/ap/20090602/ap_on_bi_ge/us_automakers Interesting since Geithner is currently in China http://www.reuters.com/article/companyNewsAndPR/idUSPEK14475620090601 Quote from Article: "Chinese assets are very safe," Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s. His answer drew loud laughter from his student audience, reflecting scepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home." End Quote..... Anyways... The importance of this relationship that I mention in the last couple of answers concerning rising interest rates and the Chinese is that until recently.... the Chinese have gladly bought up our cheap debt.... Which... helped keep our interest rates low so we could go out and buy more junk. In the past, it's been perceived that they needed us to buy their stuff as much as we needed them to provide us with cheap money but that sentiment is obviously changing. It appears the Chinese are soon going to own Hummer as Government Motors sells it off....Tue, 2 Jun 2009 12:47:59 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: And here is something to go along with the Chart that Carl has linked to: http://www.calculatedriskblog.com/2009/05/mew-consumption-and-personal-saving.html You'll see the correlation between home values and the Mortgage Equity Withdrawal chart located at the bottom of the post. Basically.... money was extracted from home equity such as Cash out Refi's and used to spread the wealth throughout the economy. Or.... why a Starbucks was built on every corner, everybody bought a SUV or more mega resort casinos were built in Las Vegas during this time frame then the previous two decades combined...... ;) So obviously.... not everybody who bought a home before 2002 is just fine and dandy.... In the middle of the post is the annual savings rate that goes back to 1929 which I found quite fascinating when we consider the Great Depression and all of the arguments of how we really got out of the Great Depression..... and how the U.S. became a Super Power. (Financing England and France in WWII, saving money and going full blown into manufacturing and providing the world with American Made products.) Which.... could be the only REAL way we will get out of this mess instead of getting even deeper into debt with a Govt. out of control in spending, getting deeper into debt and printing money. Now... think about what the Chinese have been doing for the past couple of decades and compare that to what the U.S. did in 1942 through 1975.... Except the Chinese have an even higher personal savings rate. Tie it all together with this article from Fortune Magazine all the way back in March of 2006: http://money.cnn.com/2006/03/03/news/international/chinasaving_fortune/ So... should we be bailing out failing businesses or saving money?Tue, 2 Jun 2009 09:48:42 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: The inflation questions that some people are just now bringing up is all great and good.... but I'll follow the people who have been right about many things since 2005 and brought up the whole inflation thing and predicted what is currently going on several months ago. Let's not forget that the Govt. needs to raise a lot more money.... I don't even think we are halfway of what they need to raise to cover all of these programs.... all while tax revenues are down significantly and it's obvious that the previous purchasers of the debt appear to be losing their appetite. (Hence... the increase in interest rates to make that debt more attractive to purchase.) I kind of find it funny that people are using lagging indicators to say everything is A-OK with inflation... Kind of reminds me of so called real estate gurus saying everything was just fine in 2006 and there was no bubble... (Meanwhile... somebody is snatching up Gold, Silver and Oil... Hmmm....) As far as creative destruction... I think the $20 Billion+ used in the GM bailout could have been used in something better then who knows what. I'm sure there will be stories in the near future of just where that money went... much like the AIG bailout money. It took a little while but it eventually came up who really received the billions. Let's not forget that we now have people in charge trying to run businesses who have never successfully run a business. Once again... the current path was well predicted by some not so mainstream media economists that have been right more then they have been wrong. Interestingly... they don't have any political ties ---- they just know the eventual results of actions taken/currently taking place. Unless something significantly changes such as the Fed hitting the world lottery for a trillion or two.... expect more of the same as the next rounds of debt come up for sale. What will be interesting to see is what the higher interest rates will do to areas that are being held up artificially in price with all of the current programs in place. It's obviously not working... otherwise the $8,000 tax credit would still be used the way it was and not switching it to be able to be used as an actual down payment. And... the mess that the foreclosure moratoriums created by delaying the inevitable is still on it's way.... And honestly... that $8,000 tax credit was more then an incentive all by itself to purchase real estate with our market conditions....which obviously had already started correcting significantly long before the Govt. even figured out there was a problem and came up with programs to try to save the rest of the "it will never happen here" markets. Don't take any of this as gloom and doom because it's really just opening up eyes of all the opportunity out there as long as you stop listening to people (and the people they pay) more interested in getting re-elected. As long as it's cheaper to buy then rent... take advantage of the current interest rates and $8,000 tax credit (if you qualify) while you can. If prices go down due to the eventual increase in interest rates... you can just rent out the property and have inflated wages due to inflation cover the note and move on to the next property if you have to. Deflation? I just filled up on gas and it cost me more then it did last week, last month and several months ago. Groceries? For the most part, the staples have not gone down in price. The only things that I've seen go down in price are things that I don't need.... So... I guess if you want to count the non essential items going down in price as a sign we don't need to worry about inflation... go ahead... I don't buy it though.Mon, 1 Jun 2009 14:57:57 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Nicholas: "In short, high inflation is around the corner but I wouldn't worry about it today." So... are you suggesting not to prepare for it?? Much like to ignore the ugly warnings of what was to take place in real estate all the way back in 2005?? A little secret... short term ARM's actually had a higher interest rate then 30 year traditional mortgages in late 2005... the first time since the great depression. It was a big warning sign and all of my investors caught right on and we got out of Las Vegas real estate... my last personal piece was sold in March of 2006... thank goodness. As far as your variations of why real estate varies in value to Jeff... don't forget the supply vs. demand factor. From 2003 through 2006 EVERYBODY was building as many homes as possible... it's precisely why I brought this up long ago concerning why Atlanta and a couple of other cities were going to eventually crumble. Cities such as this have no shortage of land and just kept building farther and farther out... (As somebody recently mentioned from a Kool-Aid agent... "We never had the high rates of appreciation so our city will be ok." (Ummm... that's because you were building and building and building on all of that super cheap land...) And guess what... now they are crumbling hard and are only in the first phases of the foreclosure crisis. Shudder because what will eventually happen in these areas will be worse then all of the bad news you may have heard about Las Vegas. Have you noticed that Silver has skyrocketed in the past week? How about Oil?? I'm sure you've filled up with gas and noticed the big jump in prices. The news is all out there and easy to find... the current rate of Government spending to give everybody the temporary high to feel good with no money to pay for it unless they print up money is going to end pretty soon. It's not just inflation that's going to happen.. It's high inflation and maybe even Hyperinflation if the trend continues. Did you know that this is the first year Social Security has paid out more then it has taken in? Do you think that's going to get any better? I will bet that your dollars sitting "safely" in the bank (LOL!) is going to be worth far less in the near future as you wait for real estate prices to fall even further. Maybe your market has not fallen in price enough yet... but there are several markets where it has. Don't worry about it now?? I'm not because I'm already prepared for it. Find a great home at a cheap price and lock in at the current interest rates because it will not be long until the mortgage payment is a big joke. (Of course... there are plenty of people who have to worry about increased property taxes as a certain type of Govt. thinks that is the solution to all of their worries... ROTFLMAO!) Best wishes... The big mess is only getting bigger....Sat, 30 May 2009 05:11:21 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Nicholas, Nice find on that article. On the flip side... Inflation is on it's way with the printing machines working on overtime as interest in buying up Government debt wanes and other countries are slowly getting rid of their dollars... Basically... more dollars flooding the system which means the cost of commodities such as gold, silver, oil and even homes going up in price. (There is a difference between cost and value.) So... a $1,500 future mortgage may soon be equivalent to $500 today. If you own rental homes... you jack up the rents to make up for your costs. There is a reason why historical home appreciation is in the 3 to 5% range when it's not tampered with. The raise in interest rates is only going to speed up (the decline in over inflated home values) what should have been taking place anyways before Govt. interference. (Which is obviously starting to show failure with the recent news.... nothing unexpected though if you follow the right economists that for some strange reason are rarely credited in the mainstream media with their predictions of all this mess years ago.) For markets that have already been hammered (corrected in value) you really can't build some of these homes at the current prices. As you know... all of these new real estate markets with all of the bad news coming out is no surprise to me since the same crappy loan products were used across the entire country. They are just behind in the correction process. Our current wave of foreclosures in Las Vegas are more to the tune of people just giving up on $400,000 mortgages on homes only worth $200,000. I guess it would be considered the third wave of the correction process. However... we have people lined up to buy them at $200,000.... many with cash. Sadly... as mentioned by some with the tampering of the market products out there such as the $8,000 first time homebuyers tax credit that expires Dec. 1st and the foreclosure moratorium that took place, there is a lot of uncertainty of what is really going to take shape. Meanwhile... I have investors with fantastic credit scores and plenty of cash that are limited to how many homes they can get investment loans on... even when they are putting 25% down, have plenty of reserves and the properties EASILY cash flow using the most conservative expectations in rent. It's Pretty darn stupid if you ask me... Regardless.... the printing machines are running on overtime so if you have cash hidden under your mattress or "safe" (LOL!!) in the bank... expect it to have less purchasing power in the years to come as the Govt. attempts to spend it's way out of a nasty mess. Personally.... I really don't care what interest rates or home values are as long as I have a before tax positive cash flow using a 30 year fixed mortgage. Once you understand what that really means.... all of the current mess is better suited for a trivial pursuit game or sales tactics. (I'm already seeing this...) Interest rates are going up... you better buy now!! LOL!! Regardless... it's well documented that if the Government can't raise money through debt, they are just going to print up the money to pay for all of these programs.Thu, 28 May 2009 17:09:25 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Nice video Nicholas, Reminds me of a New York Times Subscriber. Anyways -- More signs that consumption is going to be going down --> http://www.usatoday.com/money/perfi/credit/2009-05-26-credit-scores-recession_N.htm "In the first quarter of 2009, credit card delinquencies hit a record high of 6.5%, while charge-offs reached 7.5%, a near-record high, according to the Federal Reserve." Tough to buy up all of those bank owned homes or a car from Government Motors when you are not paying those credit card bills. Maybe we can just do away with credit card scores to jumpstart the economy again?Wed, 27 May 2009 14:02:45 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: On another note... With what is going on behind the scenes with all of the money being printed up.... buy up everything you can on credit with the cheap money being offered and leverage yourself to the max.... Inflation will eventually hit and a $1,000 mortgage payment will be the equivalent to filling up your car with gas. Sad.... but true...Sun, 10 May 2009 03:11:04 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: JR, Send your sellers down this way... for $250,000 they can get a 3 car garage.. Maybe even a pool... ;)Sat, 9 May 2009 21:09:52 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Good Points Lori, I think the internet and some certain third party real estate websites have attempted (miserably) to make real estate similar to stocks with all kinds of charts and other blah, blah, blah information. When you really think about all of the third party website services and the information they provide... it's certainly pretty easy to see where irrational exhuberance came into play.... and then fear as the charts took another direction. Interestingly... I know people that own homes free and clear and don't fret about current market values.... This includes friends/clients that own well over 50 homes in Southern California. Yep.. the values went down significantly from the peak but their rent checks are still coming in every month. (Of course... they bought them right to begin with.) They've had tenants in one of their homes for 28 years now... "Own Thy Own Home" I think is Rule #1 in the classic "The Richest Man in Babylon" from what I remember and that means having no Mortgage.... Reading that book is probably more valuable then all of the money now being committed to the latest educational program announced.... that really does nothing but keep the cost of a college education high since colleges are now going to be subsidized even more by the Federal Government aka Taxpayers. Funny... I don't remember having a hard time paying for a good college... but I also worked in a job that probably taught me more then the majority of classes I had to take. Oops... sorry... straying from the topic somewhat but in reality it's the same.... subsidizing something only makes it more expensive. It just kind of makes you wonder what the real cost of everything would be if people did not rely on credit so much. Because in reality... if credit would not have been so easy to get... I don't think we would be in this mess to begin with. The Banking/Lending industry has somewhat become similar to the tobacco industry.... pushing something addicting that will eventually kill you.Fri, 8 May 2009 10:03:34 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Another short sale closed... another one in final file review. Behind the scenes, it appears now that the mouths in D.C. have been directed to important issues such as a College Football Playoff, lenders are focused on what they need to be doing instead of waiting for more hope and another "plan" irrelevant to homeowners who have 30%+ negative equity. It's amazing what can be accomplished when there is clear direction....Fri, 8 May 2009 08:50:09 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: My Point Exactly: http://www.cnn.com/2009/US/04/09/hawaii.volunteers.repair/ "So Slack, other business owners and residents made the decision not to sit on their hands and wait for state money that many expected would never come. Instead, they pulled together machinery and manpower and hit the ground running March 23. And after only eight days, all of the repairs were done, Pleas said. It was a shockingly quick fix to a problem that may have taken much longer if they waited for state money to funnel in. "We can wait around for the state or federal government to make this move, or we can go out and do our part," Slack said. "Just like everyone's sitting around waiting for a stimulus check, we were waiting for this but decided we couldn't wait anymore." I just found out where I will be taking my next vacation.... and I will go on a Kayak tour with Napali Kayak.Fri, 24 Apr 2009 17:05:29 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Carl, I was actually referring to the U.S. House of Representatives.... Unless you think she is a he?? What the State of California does is not too much of my business since I don't live there. (Of course I do appreciate all the Californians being sent my way to escape.) I know.... California donates a lot of money for federal taxes .... but perhaps more of that money should be staying in California?? My point is that the system is backwards from the original intention this country was created on. More money should be staying in the states where the residents have control of who represents them directly then sending it to the Federal Government and letting the powers of position (due to being in office for decades since there are no term limits) decide how it should be spent. Just like federal taxpayer dollars should not be used to clean up houses in a community that can't figure out what to do. You know... I see it left and right.... areas with a sense of community are faring far better then areas with no sense of community. Real leadership should be able to figure this out.... especially if you are a career community organizer....Fri, 24 Apr 2009 16:57:27 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Jeff: "There are a few shadow homes around here. On one close by, the neighbors are starting to mow the lawn in order to maintain appearances. The FDIC, who is monitoring some shadow homes, needs to use some of the TARP money to hire maintenance for these places." I've been known to pick up phone books, trash and flyers from bank repos... we don't need TARP money to take care of homes... we need neighbors that care about their neighborhood and help out.... since it does effect them. We had a bank repo on our street and the previous owners had over $20K in palm trees in the front yard... we watered them so they would not die since they were so nice and the bank listing agent was too cheap to turn the water back on. TARP Money is Taxpayer money and why should taxpayers in communities that look out for each other be paying for communities that don't?? Vegas is hurting just as bad as anybody but the casino execs are not flying in to D.C. looking for bailout money. And that's the problem... too many people are relying on the Federal government to solve problems when the original intention of the Constitution is for the local and state government to be more important when it comes to our day to day lives. (Let's certainly not forget how this whole mess was created in the first place with the tampering of the markets to get out of the last recession.) State Taxes and Local taxes too high and government regulation too high or restrictive in running a business? Move it to another state that is business friendly. Why should we be using Federal Taxpayer dollars to throw money at bad business policies? Bailing out California because their government lived the high life while being the eigth largest economy in the world.... and now they are teetering on BK? We need to send Billions to them because of some Kook running the house of representatives that would not get elected in 90% of the country? Does anybody else feel all of this is ridiculous?Fri, 24 Apr 2009 14:05:20 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: It is certainly a bizarre time... partially due to all of the special interest forces in D.C. and our state legislatures. Regardless.... The foreclosure moratoriums that were put in place just delayed the inevitable as Las Vegas is number 1 followed by the other usual suspects with the surge of foreclosure notices that were delayed due to the foreclosure moratoriums. http://lasvegasrealestate4u.com/2009/04/23/las-vegas-foreclosures-1/ The Good News for us though is the huge increase we've seen in sales with over 10,500 properties currently in contract... Inventory has dropped... but once again... we have a surge of foreclosures coming since the process was delayed for three months waiting around for a program that would not help homeowners buried. With all of the programs (and money).... still no real solution for speeding up the short sale process and sellers are still being held hostage by lenders in second position that will receive nothing if the property goes to foreclosure. For examply.... we have Chase holding one of our sellers hostage... They are being offered $5,000 to release the second but they want MUCH, MUCH more up front (will not accept a note) which the sellers obviously can't afford. If the property goes to foreclosure... Chase receives nothing but they don't seem to care and would rather destroy the sellers credit.... a seller who owns a business that has been a victim of the economy with a dramatic decrease in sales. This process has been going on for almost four months now and nobody has been getting paid... This is one of the biggest travesties currently taking place.... many more properties could be avoiding foreclosure in the first place and moving the correction process along. And the sad part is... the short sales in our area tend to be in much better shape then the foreclosures. I can certainly understand frustrated homeowners stripping out homes with some of the stupidity being displayed by lenders when homeowners try to do the right thing. It certainly is a bizarre time when we think that certain banks are too big to fail... when in reality they are too big to react to what is taking place. I have a contact in a regional bank that can make a decision on working with a homeowner in 30 minutes and short sale a home from start to finish in 30 days.... Yet... it takes a bank too big to fail 30 days just to upload the short sale paperwork into their system because their departments are too small to handle their business and they certainly don't know the markets they are servicing. Bizarre..... generally happens when you have parties involved in business that they have no clue about and are completely out of touch with the real world. And that pretty much sums up what is currently taking place....Fri, 24 Apr 2009 11:24:45 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: As far as the short sales and pricing low to create feeding frenzies with the intention of the price being bid up higher (auction concept -- get a bunch of people chasing after one thing and let the emotions take over).... we saw these tactics in early 2008. We all know what happened afterwards.... (And I don't think anybody who was bidding up the prices and won during early 2008 in our area is very happy right now.) Low list prices create a lot of attention and make properties stand out..... unfortunately.... buyers that don't offer more and don't get the property start ONLY looking for similar prices on similar homes and ignore the fair deals. Or worse yet... the buyers just get frustrated and quit looking....Thu, 23 Apr 2009 15:02:32 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Quote from Nicholas: "Im smelling a rat though with the banks holding onto properties and not putting them on the market. Estimates are that there are 600,000 forclosed homes that are not currently on the market. Estimates are in that say we will have 5 million more forclosures between now and 2011. Once banks begin to realize that they cannot hold onto these properties and that the housing market will not get better they will capitulate and we will see a collapse in the housing market again." End Quote No Worries Nicholas, We have the former Executives of Countrywide with their new company, PennyMac to buy up everything on the cheap. This blog post mentions PennyMac along with something else concerning the toxic partner program: http://brontecapital.blogspot.com/2009/03/why-countrywide-guys-should-be-allowed.html With the Toxic Partner Program and the Taxpayer funding the guarantees... there will be massive wealth being made from these partnerships... it just won't be made by the average Joe on Main Street. If there was no end in sight... these companies would not be getting formed or involved because they are far savvier then people give them credit for. The Banking/Lending Industry is a small world....Wed, 22 Apr 2009 13:43:39 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Nicholas, Actually, I like all of the links with the brief summary you provide.... I don't have time to track down blogs and articles from all over the place and you seem to pick out the good (National) articles for review. Quick and concise... precisely why Twitter is becoming so popular. And when you really think about it... this thread is kind of twitterish in a way. Lori is right that we could sit around a computer all day and track these articles down... but my time is limited since I do actually buy and sell real estate.... So I actually appreciate the links that go along with your research. Certainly much more interesting then opinions with no facts to back it up.Wed, 22 Apr 2009 13:12:52 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Nicholas, Fantastic charts... Page 26 of the presentation supports what I've been discussing about rent to a T. Page 29 shows home prices in one of the bubble areas crashing below the Trend Line... possibly showing an over correction in home values for California... back to our herd mentality theories mentioned almost a year ago. Chart # 6 is fascinating but I wonder what it is today?Fri, 17 Apr 2009 15:04:15 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: General Growth has done more for communities then AIG... where is their bailout or stimulus money? Guess since they were on the top 100 Contributors list, they get nothing. http://www.opensecrets.org/orgs/list.php?order=A The National Association of Retailers better start donating... LOL!! Don't worry.. the new Toxic Partner Program will shore up those bank assets.... Just find the companies that will be participating... I hear one of them is being run by some former Executives of Countrywide. http://stationcharon.blogspot.com/2009/03/country-wide-scam-aka-penny-mac-attack.html http://www.nytimes.com/2009/03/04/business/04penny.html?_r=1&hp "But to some, it is disturbing to see former Countrywide executives in the industry again. “It is sort of like the arsonist who sets fire to the house and then buys up the charred remains and resells it,” said Margot Saunders, a lawyer with the National Consumer Law Center, which for years has sought to place limits on what it calls abusive lending practices by Countrywide and other companies." "Its biggest deal has been with the Federal Deposit Insurance Corporation, which it paid $43.2 million for $560 million worth of mostly delinquent residential loans left over after the failure last year of the First National Bank of Nevada. Many of these loans resemble the kind that Countrywide once offered, with interest rates that can suddenly balloon. PennyMac’s payment was the equivalent of 38 cents on the dollar, according to the full terms of the agreement." How Ironic... some of the biggest sub-prime lenders with some of the laxest lending standards are now saving the very same people they buried... For a Huge Profit of course.... Nicholas... There was a big disconnect between the cost to purchase and the cost to rent which is one reason (of many)we are in this mess.... especially since we saw it first hand here in Las Vegas with "Investors" buying $350,000 homes that only rented out for $1,250 a month.... And were purchasing because some geniuses were reporting 20%+ appreciation rates without any explanation except that real estate always goes up in price.. My point on rental rates is that there has been some decrease due to what you mention... but I have not seen it follow in the 50% decline range even in the neighborhoods here in Las Vegas that I have seen decline by 50%+ in value. (And yes... I know several neighborhoods that have declined by 50% in value in Las Vegas from the peaks.) And that is because rents did not go up 50% when home values did. Throw in the tightened lending standards, all of the bad credit, fear, etc.. and you still have demand for rentals even though it's cheaper to buy then rent... (If you qualify.) Not sure... but I think we had more "Investors" buying in 2004 and 2005 then we do today since todays investors are limited to how many properties they can buy on credit... and the ridiculous requirements set forth by the same idiots who got us here. They are treating today's investors who understand cash flow and the real reason to invest in real estate as "Evil" people and stereotyping them as the "speculators" of yesteryear. (Unless of course you have a hundred million to do deals directly with your buddies sitting on $800 Million of bad loans. Funny how they now understand actual cash flow since they are somewhat servicing a loan...) Anyways... better stop ranting before I end up on the "Right Wing Extremist" list thought up by our genius Homeland Security Czar... Of course... I guess I'm already on it because I'm a veteran and watch Fox News... LOL!!Fri, 17 Apr 2009 11:32:36 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: My Question Was Based On A Real Life Example for a Real Life Condominium that I have Listed for Sale right now...so Yes.... condos for $50,000 are available for sale in Las Vegas in desirable areas. (The Condo is about 300 Yards off of South Las Vegas Blvd. Here is the condo --> http://www.realtor.com/realestateandhomes-detail/2615-W-Gary-Av_Las-Vegas_NV_89123_1108200504 I've already written up an offer on it but I also have a one bedroom condo for $30,000 that could rent out pretty fast for $600 a month. Regardless.... I can find properties with a Before Tax Positive Cash Flow all over Las Vegas.... just give me what you have available for a down payment and it's done. Carl from New Jersy -- pretty good job but What is my Cash on Cash Return? Is $55,000 better in gold, a mutual fund or stocks? I have a brilliant friend stocking up on gold and I grilled him on the value of owning something that generates an income. All of his gold is really cool but it sits there making no monthly income. Tempedude --- Laws concerning associations are different for every state. It's amazing how many times I have to correct people when it comes to associations in Nevada because they heard something about the nightmares happening in California or Florida. Foreclosures in Nevada also do not take a year to perform... (your reference to homeowners not paying their dues for a year --- does not work in Nevada.) it's a rather quick process compared to other states and the lenders are responsible for paying the HOA fees for the previous six months. If a lender is on top of what is going on.. it can take less then six months to foreclose on a property. Of course, lenders have to be on top of what is going on and from some consulting work... I've found out that lenders are actually pretty clueless when it comes to actual real estate and are only concerned with how they can make money lending money. And yes... I already know how many people are currently delinquent in the association that the condo for sale is in. A SFR in the 89123 zip code area for $70K? Good Luck. You might be able to find it but it will require more money for repairs to make it habitable. Nicholas --- Rent dropping? Rent has dropped a little but there is already a tenant in the property paying $850 a month that wants to stay. Generalizations that rent has to drop to nothing because of the economy should be more thought out. When home prices were $400,000 and the rent was ONLY $1,300... did Rent Prices Skyrocket? NO. I sold a bunch of homes for my investors in 2005 for $300K+ that were only renting out for $1,200. (My clients paid under $200K for these homes.) I certainly remember laughing my $%# off when a Realtor representing so called "investment" buyers bought two of them with tenants in place. $300K to get $1,200 a month in and around $340K to get $1,300 in rent.... BRILLIANT "Investors". The Generalization that rents must collapse because prices have collapsed is skewed thinking.... The whole point of this is that Prices should have NEVER gone where they did because Renting was SO much cheaper then buying in '05 and '06. NOW... IT's Cheaper to Buy then Rent in Las Vegas. Regardless.... The Economy is in bad shape because everybody got strapped in debt with high mortgages on overpriced real estate for one. Renting became a bad word due to clever advertising from lenders, Realtors, etc... I remember renting out a home on a street we pretty much owned and the tenant (from Chicago who was a loan officer) wanted me to tell everybody they owned the home since we pretty much owned the street... LOL! I know several people that are doing just fine because they have zero debt and have lived within their means. I also know several people that are strapped because they had to have the overpriced home with the granite counter tops, etc...etc.., nice car, clothes, eat out every night, etc... Chicago Carl.... I'm also a licensed Real Estate Broker in Illinois and there is absolutely NO WAY I would ever purchase investment homes for lease in Illinois due to the laws in place that are socialist in nature. The taxes are incredibly bad to pay all of those bloated government incomes and pensions.... Evicting a tenant in Illinois is a complete nightmare compared to Nevada. You really don't own property in Illinois when you consider those property taxes. Pay off your home and pay over a $1,000 a month in property taxes hardly qualifies as owning a home free and clear in my book. Regardless and to end my rant..... Las Vegas is far ahead of the majority of the country when it comes to the "Correction" currently taking place. http://lasvegasrealestate4u.com/2009/04/03/las-vegas-foreclosure-report-2/Tue, 14 Apr 2009 00:42:17 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: While we are at it... Let's seperate the Men from the Wannabe's with a real life example: $50,000 Two Bedroom Condo. Taxes are $750 a year, Association Fees are $176 a month. As an investor, My lender tells me I have to put 20% down for a 6% interest rate. If I put 25% down, I get a 5.75% interest rate. Current rental rate for this two bedroom unit is $850 a month. Let's say I put it up for rent for $800 and it takes me one month to rent it out. (One Month Vacancy.) What is my Before Tax Cash Flow? Cash on Cash Return? ROE for the year? Should I put 20% or 25% down??Mon, 13 Apr 2009 00:18:56 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Unless somebody can accurately predict the future 100%....Up, Down... who cares as long as it has a before tax positive cash flow? Because in reality.... what really determines the so called Value as defined in the past 8 years? What other homes sold for in the same neighborhood?... What it appraises for?? Ridiculous. $350,000 homes that could rent out for $1,200 were rubber stamped through by "genius" lenders four years ago. Now the same lenders make the savvy investors jump through hoops and sing a song while dancing to purchase the same home for $150,000 that rents out for $1,300 a month.... Absolutely genius. Figure out the PITI for a home along with Association fees if any, what it rents for on the low side, throw in a month of vacancy and if you have a positive cash flow at the end of the year with what you are putting down with your loan terms... buy it and don't worry about what MIGHT or MIGHT NOT happen in a couple of months or even the next few years. Before Tax Positive Cash Flow is the key phrase. My Grandfather racked up Thousands of Acres of Ranch Land during the Great Depression using a simple cattle per acre calculation and to this day, that land is still in the family.... He did not care what it might be worth next year, what the so called "appreciation rate" was or any of this other junk I see all over the internet... He cared how much cattle an acre of land could support and what the price of beef was. Funny... what I see in regards to real estate nowadays reminds me of going out to the ranch and feeding cattle.... Throw cake in the back of the truck, give the secret horn honk and cattle come from out of nowhere to feed on whatever we give them. I could put manure in the back of the truck, give the secret horn honk and the stupid cows would eat it up... It's really no different then 2004 when Las Vegas had 42% appreciation rates... Report it and people came out of nowhere to buy even though it made absolutely no sense. Today... report a 20% price decline and people run like there is no tomorrow. Probably the same reaction I would get with real cattle feed after feeding our cattle manure.... MOOOOO.... Hopefully some of that Stimulous Money makes its way to financial education... but for some reason I think the Financial/Banking Lobbyists don't want that.... Eat More Beef.... It helps the Brain.Mon, 13 Apr 2009 00:03:40 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Check out the Mortgage Equity Withdrawal (MEW) Chart over on Calculated Risk that shows the amount of money withdrawn from 2002 through 2007 that fueled the economy: http://www.calculatedriskblog.com/2009/03/q4-mortgage-equity-extraction-strongly.html Now that the ATM machines have run dry.... http://uk.reuters.com/article/burningIssues/idUKTRE52U72O20090331 "The John Hancock Tower, New England's tallest office building, sold in a foreclosure auction on Tuesday for $660 million, about half what the sellers paid three years ago, underscoring the crumbling state of the U.S. commercial real estate market."Mon, 6 Apr 2009 21:30:48 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Nice... any lower in our area and they might as well be free... Quote from Article: "Prices were weighed down by foreclosures and bank efforts to unload houses, according to the S&P/Case-Shiller U.S. National Home Price survey." Ask anybody doing short sales and they'll tell you the problem is due to the poor efforts of banks and their loss mitigators in dealing with distressed sellers facing a hardship and are trying to avoid foreclosure in the first place..... where the property will sell for even less.... Case in point... We have a short sale and have been waiting for Chase to approve the short on the second for four months now... they get a little bit of a payoff from the first which is better then nothing if the home goes to foreclosure. (Chase will get nothing if the home goes to foreclosure.) In the meantime... a REO home (same floorplan, same neighborhood) is put up for sale for $80,000 less, gets a buyer and closes. I hope I do not have to explain what that does to the neighborhood home values.... and future appraisals for all of the properties currently in contract waiting for their respective lenders to approve their short sales. There are hundreds if not thousands of the same situations taking place and with the reported declines in other markets as highlighted by the article Carl provides.... http://www.dailyfinance.com/2009/03/31/home-prices-drop-a-record-19-percent-in-the-past-year/, expect more of the same. There is nothing being done by the Geniuses to help address or solve this problem (except attempts to keep artificially high home prices up) ..... and it's been going on for quite some time now.Tue, 31 Mar 2009 15:49:12 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: BTW... as a UNLV alumni that does not like Duke for obvious reasons.... I hope Coach K and Duke win it all!Sat, 21 Mar 2009 21:05:38 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Best wishes to your Mom Carl. Glad to see that you've caught on. It should be an outrage as failure upon failure continues with an entity in charge that has NO experience or clue on how to run a business, much less have a clue about real estate. Here was a pretty good post on ActiveRain with everything taking place during the AIG smokescreen: http://activerain.com/blogsview/993231/AIG-Is-Just-A-Smokescreen-A-Diversion-Technique-Dont-Be-Fooled Gives a nice summary of everything taking place behind the scenes. Glenn Beck has been doing a STELLAR job of reporting the mess going on with some Fantastic guest speakers that sums it up to a T. The following article from Glenn Beck really sums up the AIG distraction for the Trillion dollars just printed up perfectly: http://www.glennbeck.com/content/articles/article/198/22954/ For the record... Glenn Beck thinks everybody in D.C. is pretty much a bum. As for our elected representatives... well... I asked Congresswoman Titus why they voted yes for a stimulus bill that she never read and how it was going to help... and if it really would help... why stop at $800 Billion and let's just make it 10 Trillion so we can all be happy. I got the same form letter that I got from Senator Reid in response to the same question. On Thursday I sent them a response telling them they did a great job for Voting yes on a bill that allowed the AIG Bonuses.... No response yet.... By the way... when you are #1 for a search term with 59,000,000 results... you are bound to attract spam. http://www.google.com/search?sourceid=navclient&ie=UTF-8&rls=HPIB,HPIB:2005-31,HPIB:en&q=why+should+someone+buy+in+this+marketSat, 21 Mar 2009 20:12:18 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: LOL!! I'm going to have to redo my tourney bracket... I'm having visions of what happens in some certain countries where the Ruler of the country's team always seems to win... As for Real Estate... buy in areas where the policymakers have an interest... If this continues... it's a no brainer. We've got Solar coming our way... http://www.energyinvestmentstrategies.com/2008/07/29/solar-coming-on-strong/Wed, 18 Mar 2009 16:00:12 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Yep... as predicted from the Dog and Pony Show currently taking place concerning the AIG bonuses: As now being exposed everywhere.... Senator Chris Dodd created the amendment that allowed the bonuses: http://www.foxnews.com/politics/2009/03/17/recover-aig-bonuses-lawmakers-scramble-undo-protections-approved/ "Though Sen. Chris Dodd, D-Conn., is among those leading the charge on retrieving the bonuses, an amendment he added to the $787 billion stimulus bill last month created a roadblock to getting that money back. The amendment, meant to restrict executive pay for bailed-out banks, also included an exception for "contractually obligated bonuses agreed on or before Feb. 11, 2009." This would seem to exempt the AIG bonuses that lawmakers and President Obama are looking to recover. Incidentally, Dodd is the largest single recipient of 2008 campaign donations from AIG, with $103,100, according to the Center for Responsive Politics." Remember that $800 Billion Dollar "Stimulus" bill pushed down everybody's throats without anybody having a chance to read it? Congress knew (or should have known) about these AIG bonuses long ago: http://news.yahoo.com/s/ap/20090318/ap_on_go_pr_wh/aig_what_did_they_know "While administration officials insisted Tuesday that neither Obama nor Geithner learned of the impending bonus payments until last week, the problem wasn't new. AIG's plans to pay hundreds of millions of dollars were publicized last fall, when Congress started asking questions about expensive junkets the company had sponsored. A November SEC filing by the company details more than $469 million in "retention payments" to keep prized employees." Say one thing to Main Street... do another for Special Interest Groups behind closed doors.... tough to decide on what to do with these guys and how to invest for the future. Now we know why "Flip-Flopping" is such an important issue. Reminds me of the T-Mobile commercial with the real estate agent. http://www.youtube.com/watch?v=O2_InqWiLPgWed, 18 Mar 2009 12:58:31 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Wow... Interesting article Nicholas. However.. I predict this law will be Modified REALLY Fast... Especially since the Public Employee Unions are major contributors to the ruling party. #2 on the Biggest Campaign Contributors List --- http://www.opensecrets.org/orgs/list.php?order=A http://www.opensecrets.org/orgs/summary.php?id=D000000061 I give it an over/under of two weeks until a new bill is up for vote to modify the BK law before this catches on with strapped municipalities. Funny how you can view the campaign contributor list and predict what is going to happen next.... For Example....Right now everybody is Screaming at AIG when they might want to be looking at something else... http://www.opensecrets.org/news/2009/03/before-the-fall-aig-payouts-we.html Just one big Dog and Pony Show in My Opinion.... It's just so predictable.... I wish the Casinos had some betting on these issues in the Sports Books so we could watch all of the Aides come in to place the bets....Tue, 17 Mar 2009 10:37:26 PDThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Porkchop, Article to go with what you state from The Financial Times: http://www.ft.com/cms/s/0/ba857be6-f88f-11dd-aae8-000077b07658.html From the Article: China has used the dollars it accumulates selling manufactured goods to US consumers to accumulate the world’s largest holding of Treasuries. "Luo Ping, a director-general at the China Banking Regulatory Commission, said after a speech in New York that China would continue to buy Treasuries in spite of its misgivings about US finances. Mr Luo, speaking at the Global Association of Risk Management’s 10th Annual Risk Management Convention, said: “Except for US Treasuries, what can you hold?” he asked. “Gold? You don’t hold Japanese government bonds or UK bonds. US Treasuries are the safe haven. For everyone, including China, it is the only option.” Mr Luo, whose English tends toward the colloquial, added: “We hate you guys. Once you start issuing $1 trillion-$2 trillion [$1,000bn-$2,000bn] . . .we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do.” ---- End Quote.Wed, 25 Feb 2009 02:42:17 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: I agree with you Nicholas... bailout money should have gone to the regional banks that did not get involved in the risks to get "too big to fail".... And your campaign contribution tracking will show that same trend for many representatives including Barney Frank and Chris Dodd. http://www.opensecrets.org/news/2008/07/top-senate-recipients-of-fanni.html Carl... No... sinking more money into them is just a payback from all of the campaign contributions. Hmmm... Citigroup Contibutions: http://www.opensecrets.org/orgs/toprecips.php?id=D000000071 Bank of America Contributions and Recipients: http://www.opensecrets.org/orgs/toprecips.php?id=D000000090 Tarp recipients... Check this out for an eye opener. http://www.opensecrets.org/news/2009/02/tarp-recipients-paid-out-114-m.html And this just floors me when you think about some of the recipients of the Spendulus bill: http://www.opensecrets.org/orgs/list.php?order=A Click on the American Federation of State, County and Municipal Workers: http://www.opensecrets.org/orgs/toprecips.php?id=D000000061 American Federation of Teachers: http://www.opensecrets.org/orgs/toprecips.php?id=D000000083 United Auto Workers Union: http://www.opensecrets.org/orgs/toprecips.php?id=D000000070 I feel like I can now predict the future.... Just for laughs... The National Association of REALTORS: http://www.opensecrets.org/orgs/toprecips.php?id=D000000062 They just donate to the incumbent.... No wonder why REALTORS are not getting bailed out... Everybody in Congress just figures they are going to get their money anyways...Fri, 20 Feb 2009 15:57:36 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: LOL Nicholas, You mean you are not the reason why money is leaving the stock market and going into gold?Fri, 20 Feb 2009 09:11:51 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Here is the link to House of Cards --> http://www.msnbc.msn.com/id/29163182/ Next Air Times: * Saturday, March 1, 2009 at 12a ET * Sunday, March 15, 2009 at 9p ET Or you go here --> http://www.nbcuniversalstore.com/detail.php?p=84587&v=cnbc_original-productions “American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage,” Greenspan recommended in a speech to the Credit Union National Association." They got the name for the documentary from an internal e-mail from a Wall Street Firm: "Let's hope we are all wealthy and retired by the time this House of Cards Falters." Something mentioned but not detailed in the documentary is all of the money made from cash out refi's and what this created in flooding the economy with buying everything on borrowed money from false equity... It was borrowed money used to consume... just like the money in the "bailout" and "Economic Recovery Act".... What happens when this money is used up and we start the cycle again? What will the next spending package be called??Wed, 18 Feb 2009 13:54:13 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Carl, The PBS piece was not that good... Something tells me the producers of that piece received some kind of Governtment Grant to produce it. House of Cards that ran this past weekend on CNBC was MUCH Better and explained how we got here in the first place with very candid interviews from some of the very same people who participated in the creation of "Financial Engineering" to begin with. The Government Tampering with Interest Rates and encouraging Lax Lending standards so everybody could own a home, the scandal with Fannie Mae and Freddie Mac...etc.. etc.. All of which helped create a false economy that should have never happened... and now the price is being paid. Borrowing money to spend in hoping to fix a problem created by too much borrowing is very dangerous and IMO will only compound the problem.... If it delays it... it's only a delay. Nobody is saying the policies of the past 8 years of extreme deficit spending were good... And the people who warned about this collapse several years ago are now saying the problem is only going to get worse as the Government meddles around in it and creates even more debt and obligations. Insanity is doing the same thing over and over again and expecting a different result.Wed, 18 Feb 2009 12:56:18 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Nicholas: "You guys haven't yet begun to feel the systemic shocks that are going through our economy." Pardon? We just had three Chilis restaurants close last week.. what do you mean we don't know the shocks taking place?? Just joking.. I have a client that works for corporate in Starbucks and things are not so happy right now. I'm currently watching gold shoot through the roof and stocks tank as the Stimulus package gets ready to be signed and GM tanks... Nasty, Nasty, Nasty... The commercial real estate collapse is coming really, really soon and is the next big crisis. Gold is going nuts again --> http://goldprice.org/live-gold-price.html and doing far better then any real estate investment. Get ready.... If you don't have gold/silver and are not in Govt. or Health Care... times are going to really, really suck as the lies unfold... Gold is up $26.81 today... WHOOO HOOO baby!!!! We are cashing out and moving it to Silver before the Govt. comes knocking on our door to take it away... If you have gold or silver and need a good steak... contact me. Your dollars are worthless so don't even try... LOL!!!Tue, 17 Feb 2009 09:54:58 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: I think the question needs to change. Things have certainly changed since April of 2008 to say the least... Buy plenty of Silver Ryan... buy lots of Silver... If you want some steak... contact me. I bought up ranch land with lots of fat cows because I love Steak... I don't know about everybody else... but I need Steak when everything collapses...Sun, 15 Feb 2009 02:15:58 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Gerald Celente may be right --> http://www.youtube.com/watch?v=9nJ7LM3iyNg&feature=channel_page From Housing Bubble Hall of Shame --> http://realestaterecord.blogspot.com/2009/02/revolt-brews-in-california-counties.html And I just wonder what people from Oklahoma/Texas/Midwest etc. are going to think when they find out the new stimulus bill is bailing out California? They will eventually catch on......Sun, 15 Feb 2009 01:38:19 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Wow, Since my last answer with the http://www.youtube.com/watch?v=9nJ7LM3iyNg&feature=channel_page link concerning commercial real estate... I've been doing some research and it's not pretty. Sadly... there is very litle information out there concerning this and the next crisis about to hit. These are the people that have money that creates the "trickle down theory" that are about to really lose some serious money. To date... we've been experiencing what happens when people get over leveraged on buying homes that they could not afford... created from homes being overvalued due to exotic mortgages. What we are about to see is what happens when the people who actually create real jobs lose their money and stop providing jobs. Not being able to afford a mortgage once the terms adjust is one thing... Scary stuff... And if our debt borrowers cut us off... we are in very serious trouble when the alternative for our liberal friends is to raise taxes and/or print up money to pay their new debts. Buy Farm Land with cash and worry about feeding your own family....Sat, 14 Feb 2009 22:40:34 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: What we really need to get the economy going is a Pool in every backyard... LOL!! http://activerain.com/blogsview/930780/What-This-Country-Needs-Is-a-Swimming-Pool-in-Every-Backyard And since it's Friday the 13th and Nancy Pelosi got her way with no 48 Hour Review of the spendulus bill so she can get out and take her 8 Day European trip... I thought this interview was appropriate for the day: http://www.youtube.com/watch?v=9nJ7LM3iyNg&feature=channel_page "The Commercial Real Estate collapse in 2009 will dwarf the Residential Real Estate collapse." Tax Revolts and Revolution? Oh MY! Happy Friday the 13th...Fri, 13 Feb 2009 19:04:20 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Carl, LOL!!! Funny thing is that I posted something on my Las Vegas Real Estate blog back in February of 2008 concerning how investors like yourself should have incentives to help the real estate market-- http://lasvegasrealestate4u.com/2008/02/02/the-real-estate-solution-to-stimulating-the-economy/ Today... I have a slew of real estate investors that truly have an understanding of what investing in real estate is all about... (leverage).. and are not too motivated because in our market they have to put 20% down since we can't get mortgage insurance for investors. Lenders will not lend to investors unless they put a minimum of 20% down and there are some GREAT cash flow properties out here that are sitting untouched. 96 Multi Family BANK OWNED properties in Las Vegas --> http://www.lasvegasrealestatehome.com/idx/search_repo_reo.html The current crisis is all about Real Estate and we have a bunch of clowns trying to solve the problem with zero clue about real estate. I don't doubt that they were good Attorneys but I don't think they have a clue when it comes to business. Oh yeah... Gotta buy now because there MIGHT be a $15,000 tax credit! (Read the fine print.) ... LOL!!Thu, 12 Feb 2009 16:10:35 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Hey Trulia, Thanks for joining the conversation! Please feel free to specifically call out names instead of generalizing all Realtors as one. You make an excellent point and unfortunately... just like when the $7,500 "tax credit" was announced last year... it was abused in marketing. No worries though... this time next year we'll probably be hitting $22,000 in a "tax credit" for the next greatest thing since sliced bread... Thanks for stopping by and clarifying though...Wed, 11 Feb 2009 21:28:49 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: It's a Great time to buy near any of these projects --> http://www.stimuluswatch.org/ Government Commitments according to Bloomberg --> http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aGq2B3XeGKok "The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages."Wed, 11 Feb 2009 12:11:49 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Carl, I'm not a big fan of tax credits to buy homes (or even cars)... If somebody needs to buy a new home or car they should do so for the right reasons... not just so they can get a tax credit. People are buying homes out here again without any incentives but just great affordable prices. I actually see a couple of homes currently in the process of being built... It's certainly not because of any stimulus packages. People that have gotten out of Mortgages they could not afford now have the extra monthly cash flow (permanent) to afford to eat among other things... which stimulates the economy. Please keep in mind that as the Government has decided to increase spending significantly and increase the deficit even more... tax revenues are going way down as it is. Spendulous bill passed the Senate today... Dow is currently down 385 points. Charles Schumer said Americans don't care about debt. While the current state of the economy is very complicated... it really is not. We got leveraged out and we need to reset to sanity. Not to change the subject... but I found this post quite interesting with a bigger meaning then just a Realtor that blew all of the money they made during the boom ---> http://activerain.com/blogsview/912244/2001-Realtor-vs-2004-Realtor-vs-2009-Realtor I think we all know people that made a lot of money with the false economy during the hey day and blew it on Nice shiny luxury cars, Going out to eat, $4.00 coffee, Luxury homes they really could not afford without exotic mortgages, etc.. etc.. The U.S. borrowed a lot of money, the deficit was doubled in 7 years and we blew the money without creating real investments. It was bound to end and creating a false sense of recovery will only create bigger problems down the road. Correct me If I'm wrong, but I'm pretty sure 9% of the annual budget is used up just to service the current debt. Obviously that % is going to be going up. Borrowing money to get out of trouble through Government Spending is not a solution. It did not work for Japan when their real estate market collapsed in 1989. Nice article done last October concerning the correlations between what is going on now and what happened to Japan in 1990 --> http://www.nytimes.com/2008/10/19/weekinreview/19impoco.html This was done in 2006 concerning "debt exhaustion" --> http://www.oftwominds.com/blogjun06/exhaustion.html Regardless... We have a lot of false hope currently being promised and circulated around without specific details to push some long time objectives through fear. Not what we need right now.... To finally answer your question Carl... don't care because that will now be the least of our problems. Probably a good time for you to brush up and read Animal Farm by George Orwell... http://en.wikipedia.org/wiki/Animal_Farm Plenty of sheep out there that prefer to chant what people want to hear and not what they need to hear...Tue, 10 Feb 2009 13:22:20 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Quick Questions For Socialist Carl, Do you think people would do their due dilligence if something was not supposedly regulated by the government? Would the people automatically trust documents that are supposedly regulated and just sign them? Real estate agents are licensed and regulated... should we automatically trust a real estate agent because they are licensed and "regulated"?? Should people have automatically trusted a Mortgage Broker because they paid $300 to get a license and be "regulated"? Sadly..... people trusted all of the above because they were supposedly regulated. Hard core truth but if all of the above were not licensed by the Government that everybody pays into as looking out for our best interest.... MAYBE.. JUST MAYBE people would have been more skeptical and did their due dilligence on the people they were dealing with instead of just relying on the fact that the real estate agent that said a property was a great investment or the mortgage broker who said that somebody could just refinance in a year would have been more carefully scrutinized... I talk to these people every day since I specialize in short sales and more often then not... these people were duped because they trusted that Government was regulating everybody. Who is going to regulate the regulators?? The current regulators are far from being trustworthy and in my mind are the biggest criminals.... Sorry... just my thoughts as the Socialist Kool-Aid is getting passed around as an excuse to support and spend more money to the very same people who gave EVERYBODY false guarantees... NO SPIN HERE.... Don't blame the Capitalists... Blame the Government for these problems because even my socialist european friends are wondering why in the hell the U.S. Government was guaranteeing these toxic investments..... As I always tell them... just look at where the campaign contributions are coming from...Sun, 8 Feb 2009 22:47:50 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Quote from Nicholas: The politicians in government need to immediately cease talking about more bailouts, cramdowns, and interest rate reductions. If you are going to do it, talk about it secretly with noted economists, write the legislation and then fire it onto the floor. The more you talk it up the worse it makes the housing industry. How many of you out there now will not buy a house unless you get a 4-handle on your mortgage? Why buy a house now when 15k no-interest loans are comming from the Feds. Maybe if I wait longer I can get a 4.5% loan with 15k no-interest kicker on the end. When does the cycle end? Stop. Further intervening in housing markets is only going to destroy the industry. Further handouts only propogate a handout mentality. The market doesn't need handouts, it needs price reductions. The end result of this action is already known. The US Auto industry found that they could sell a lot of cars at 0% interest. Great! Problem is that when the rates went back up they sold zero cars because people expected 0% interest rates and felt they were getting ripped off if they were not provided. We all know that housing subsidies do not work and that the cure is falling house prices, the rest is just smoke and mirrors, bread and circus. -------- End Quote---- Nicholas... quote of the year because I've had several people confused from the last "bailout" junk that turned out to be junk and only ended up draining more of their savings from false hope. You hit the nail right on the head concerning this... Las Vegas real Estate sales are up big time because prices have been corrected to pre-2001 days before the Government got involved with tampering with something they have no clue about except for what lobbyists are telling them....Sun, 8 Feb 2009 22:24:15 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Carl, No offense but you are clueless to the fact that the so called regulators should have been regulating.. I can make a pretty long list of government regulators asleep at the wheel while we were paying for their lifestyle... Sadly... you were obviously also sleeping with that sad socialist comment... What Bernie Madoff was doing was regulated by the government... In fact it's the precise reason why people trusted their millions to him despite warning signs.. because they trusted the government and there is no way the government would allow such a thing... Oh my... wow.. government regulation did a really good job now did'nt they???? http://news.bbc.co.uk/2/hi/business/7786923.stm Barney Frank said Freddie Mac and Fannie Mae were just fine in 2004 despite reports stating otherwise... Oh... how about this from your source of news?? http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63 9/11/2003 for your records... "The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates." SEPTEMBER of 2003... HELLO???? Carl... please do some research before coming up with another silly statement like that. The people you and I are paying knew all about it... Are you seriously going to sit here and tell us that they did not???? PLEASE... Don't be such a Pelosi... It's absolutely disgusting....Thu, 5 Feb 2009 07:52:41 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: http://www.foxnews.com/video/index.html?playerId=videolandingpage&streamingFormat=FLASH&referralObject=3516542&referralPlaylistId=f909db77f0ad31bbfd35cb7e6a04f50204809c04 Nice simple explanation on what happens when foreign countries such as China stop buying our debt. I could be wrong... but I don't think that helps out real estate. The "Inconvenient Debt" does not help out either... http://www.glennbeck.com/content/articles/article/198/20816/?ck=1 Until we stop living in a false economy... who knows when it really will be a good time to buy real estate? Too many bad policies in place with no common sense solutions... such as letting everything work it's way out instead of tinkering (and confusing everybody with false hope) with the system. If the Government would not have tampered with the system in 2001... we would not be here today. Unfortunately, everything I see today reminds me of a first time FSBO telling me the best way to sell their home.Wed, 4 Feb 2009 20:27:34 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Jeff, What's another $500 to $1000 a year when you owe $184,000?? (And going higher if the new "stimulus" bill gets passed.) http://www.pgpf.org/about/nationaldebt/ No worries Comrade... the new "stimulus" package will take care of everything. But we've got to get it through before you get to read it otherwise (according to Nancy Pelosi) we'll be losing 500 Million jobs a month!! http://www.glennbeck.com/content/articles/article/198/21053/ LOL!! The entire world is going to be unemployed by the end of 2009 according to Nancy Pelosi... Of course the new stimulus package really is not going to be creating any real jobs this year or even contribute to entrepreneural endeavors so real estate probably is not a good investment since the New Party in Charge says everybody is going to be unemployed. Nice take by Glenn Beck today on tactics currently being seen... http://www.foxnews.com/video/index.html?playerId=videolandingpage&streamingFormat=FLASH&referralObject=3528796&referralPlaylistId=949437d0db05ed5f5b9954dc049d70b0c12f2749 My congresswoman still has not gotten back to me on how the new "stimulus" package is going to help real estate even though they voted for it. Nice List... http://www.cnn.com/2009/POLITICS/02/02/gop.stimulus.worries/index.html Let's hope the Chinese don't see it or they might cut off the funding for the debt to pay for us to stay open... Of course... everybody else is starting to catch on... http://www.foxnews.com/video/index.html?playerId=videolandingpage&streamingFormat=FLASH&referralObject=3522606&referralPlaylistId=f909db77f0ad31bbfd35cb7e6a04f50204809c04Wed, 4 Feb 2009 19:49:03 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Lori, You are right... it was answered about 2,600+ answers ago. This has turned more into a discussion of what is going to happen next. Much of what we see now was discussed several months ago. So while some are scratching their heads and wondering what happened, there have been several on here providing some pretty useful information on what to look for. It's always best to be proactive then reactive... I just got a call from a luxury home builder in the burbs of Chicago. I had stopped by in April of 2008 to look at what they were doing.... now I can buy the same home in the builders inventory at the amazing once in a lifetime deal of 30% off from when I was last in there. Sign me up!Tue, 3 Feb 2009 18:35:52 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Reading between the lines on this story http://bloomberg.com/apps/news?pid=20601087&sid=aKufqJK9j1cY&refer=home is disturbing. Some interesting stats here including a chart on homeownership percentages --> http://www.hoover.org/research/factsonpolicy/facts/26963064.htmlTue, 3 Feb 2009 14:04:31 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Quote--- "This marks a very important shift in American pshycology. Consumers are turning into savers at an alarming rate. This is your economic contraction. What are they saving for...Housing maybe? On the other hand it seems that we are exchanging personal debt for national debt. It doesn't matter what balance sheet the debt shows up on, personal or federal, you still owe." End Quote ------- 70% of our economy is based on consuming... the Govt. has decided that if you are not going to borrow and spend money, they'll borrow and spend the money for you. As for California... don't worry Nicholas... you'll soon be paying their bills if the "stimulus" package goes through. And when that does not work...If you don't buy a house.. the Govt. will buy it for you.Mon, 2 Feb 2009 13:01:28 PSThttp://www.trulia.com/voices/General_Area/Open_Opinion_Thread_Why_should_someone_buy_in_th-31301Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: http://money.cnn.com/2009/01/21/real_estate/ghost_inventory/ By the time they get them up for sale, a dollar or two from the new "stimulus" package may trickle through. I'm with Carl on this one because there is so much in the new proposed "stimulus" package that is a bunch of Pelosi. (My new term for BS.) Too slow to react and the Government is so far behind that they appear to be clueless as to what has been going on. From 01/14/2008: http://www.nytimes.com/2008/01/14/business/14spend.html And it all goes back to this nicely written article with some certain people warning about this for quite some time: http://executivesuite.blogs.nytimes.com/2008/12/03/peter-schiff-and-shawn-tully-were-right/ Nice collection of TV Interviews of Peter Schiff and everybody laughing at him --> http://www.youtube.com/watch?v=2I0QN-FYkpw Too much consumption and not enough saving. From October of 2008: http://www.youtube.com/watch?v=4FvwxXfc7s0 Sorry.. I've got to listen to Schiff instead of thinking that the Pelosi coming out of D.C. is going to help. Not too long ago we were mocking the executives of the big three auto makers going to Congress with their hands out for a bailout without a plan... it appears the rest of the world is now doing that with us: http://www.iht.com/articles/2009/01/29/business/borrow.4-419037.php "As the U.S. Congress looks for ways to expand President Barack Obama's $819 billion economic stimulus package, the rest of the world has an urgent message to convey: Tell us how you are going to pay for it without drowning the world in debt." Good Question... We could not pay down any debt when we were making money.... Peter Schiff is right. ---> http://www.youtube.com/watch?v=BSparys6duU Even if you save your dollars, good chance it's going to be worthless not too long from now.Fri, 30 Jan 2009 00:13:52 PSThttp://www.trulia.com/voices/Foreclosure/is_it_time_to_buy_in_Las_Vegas_-5799Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Jerec12.. Umm... a Hyperinflationary Depression would basically equate to a $1,200 mortgage being pocket change since dollars will basically become worthless. In one sentence you are using Hyperinflation and the next you are using a decrease in prices. You should probably think that through a little IF it happens.Sun, 30 Aug 2009 10:23:52 PDThttp://www.trulia.com/voices/Foreclosure/is_it_time_to_buy_in_Las_Vegas_-5799Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: If recent activity on our listings is any indication... it could be time to buy. Several of our listings have now gone into contract with 4 of them going into contract in the past two weeks. Activity has been very strong... not exactly science but I don't have time to make hypothetical predictions. I think the 20% of the agents doing 80% of the business in Las Vegas would concur... However... you have to watch out for certain sectors of Las Vegas that seem to still be dropping ... Some areas have held up pretty well but it's tough to say if that will continue when there are some really good deals in other areas that have been decimated in value. Also.. a couple of communities we track seem to have taken a recent hit in value with the uncertainty of once proposed area entertainment and shopping centers of ever being built... For Investment purposes... there are areas in Las Vegas that easily cash flow... However... the job market is not that good and the tourism numbers are showing no signs of improvement. That's the wild card right now... Otherwise I would say buy, buy, buy...Sat, 7 Mar 2009 20:49:52 PSThttp://www.trulia.com/voices/Home_Buying/Where_to_find_an_experienced_short_sale_specialist-26162Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Hannah, That's interesting. Does a Title Company know of every single short sale transaction taking place and who is closing them? Whenever possible... we tend to use one specific title company / escrow officer for our short sales. if you call the Title Company / escrow officer that we tend to use... who do you think they will refer? Or... If you call another title company -- who do you think they are going to refer? So... stating that it's an unbiased opinion may not be exactly true. Some agents below answered this question and specifically pointed out some misconceptions in the original question asked on 03/14/2008.... which tells me they obviously understand short sales. Just some thoughts...Sat, 22 Aug 2009 16:27:15 PDThttp://www.trulia.com/voices/Foreclosure/REO_SALES_MANAGER_NEEDS_INPUT-98638Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Fun.... from my experience of representing buyers in purchasing, I'll give you two night and day examples of the techniques used by a couple of the top REO Listing Agents in Las Vegas (one is the top agent last I checked in closings... and the other one just has a ton of REO listings): Let's start with the good Example: Agent #1 who has been in the REO business for awhile -- has the properties cleaned up, minor repairs are often made and in the bad cases, new cheap carpet and paint, multiple photos (decent to good) on the MLS, utilities turned on, priced right on the numbers to start off, does not hold properties off of the market to collect both sides, properties always have a lockbox on with a key, systematically reduces the price with time on the market, staff is receptive when submitting offers and has the courtesy to let you know they received the offer and have submitted the offer to the bank. I love to show their listings due to the amount of games played is minimal and are handled professionally.... and other agents I talk to tend to feel the same way. Properties tend to sell faster at a fair price. Sometimes the hot ones pop up and they do get bid up a little. There are always buyers that let the emotions get the best of them. Last I checked... he had the most closings. Now the bad example.... Agent #2 - Newer to the REO business... maybe a couple of years of experience, Has a ton of listings... bad photos (or should I say photo), usually ridiculously underpriced and if they don't get enough offers, they will lower the price even further in the attempt to create a bidding war. I always loved (notice past tense) getting that phone call two weeks later after an offer is submitted "To put in your Highest and Best Offer". Utilities are rarely turned on, properties might be trashed out but not cleaned, repairs rarely made. Inspection? Good luck getting the utilities turned on in a decent time frame. In fact, buyers agents are better off putting them in their name for the inspection. Forget about being reimbursed for any minor repairs needed to just perform an inspection. You'll notice "Loved" because the listings are hardly represented by a professional and when the new ones come up on my radar, I rarely forward these listings to buyers on my search list because most of the time, it's a waste of time. I know several other agents that certainly feel the same way.... which... I've noticed more and more of their properties sitting around at low prices... And yes... there are plenty of agents wondering how they got the REO business to begin with... Big tip... follow REO Agent #1 and something to throw in.... collect up the agents e-mail addresses doing the business. (Especially the ones working with investment buyers) In my listings, I have/save the business cards of agents stopping in and see who is out there looking... (After a while... you see the same cards over and over...) Send them an e-mail with the listing information AFTER the property has been prepared. Somebody has been doing that with me (and other agents) with the brochure view from the MLS the day the property is listed (and ready) on the MLS --- nothing fancy and Agent information screaming "look at me" is not plastered all over it --- which I love because I can just forward it to my list of buyers in the category of home that it falls in. The agent is not running around trying to do "both sides" of the deal, holding properties off of the MLS, and building a good reputation with buyers agents... which truly is representing the best interest of their client in getting the best price in the shortest amount of time. Hope that helps....Sat, 14 Mar 2009 20:52:43 PDThttp://www.trulia.com/voices/Foreclosure/Short_sale_process_clarification_needed-69350Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Interesting Answers to this thread... read Len's last answer... Specifically: "You mentioned that there is a pattern of LV agents giving positive and hopeful advice and all other agents saying that these situations are not possible. Yes, there is a pattern! Do you want to know why? Because Las Vegas is the nation's leader in foreclosures. We have such high volume of these situations, most of us here have great knowledge of them. Plain and simple. So who should people believe, the people that see a situation like this every now and then or the people that constantly see these situations everyday (and also do business in the same area as the original poster)? I would go with the locals that see these situations everyday." Well Said Len... And as John answered... Probably one that I would pass on also. Short sales get a bad rap because of agents failing to qualify the sellers, advice from "friends" who have never done one... or advice from some of the answers I see on here. (Particularly one non-local answer that is REALLY bad...) Just my thoughts as I stumbled across this.... No two short sales are the same... and just when you think you know everything... something new comes along...Sat, 14 Mar 2009 20:00:38 PDThttp://www.trulia.com/voices/Using_Trulia/How_do_we_get_our_listings_back_on_Trulia_Our_nat-34034Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Thanks Emily, Signing up for Trulia Pro and how this would more effectively brand my listings was my next question... Thanks for the answer!Wed, 25 Feb 2009 12:32:41 PSThttp://www.trulia.com/voices/Using_Trulia/How_do_we_get_our_listings_back_on_Trulia_Our_nat-34034Answer by Paul Francis - Las Vegas Real Estate & Summerlin Homes: Hey Emily, I noticed the new changes and they hardly give the listing agent more visibility... in fact.. it's now worse. http://www.trulia.com/property/1073508121-2010-Mondo-Ct-Las-Vegas-NV-89123 "View More Details" goes to the company website and how come the "Ask a Question About This Property" is all the way at the bottom underneath all of the ads? How come when we claim the listing, we can't put our website link to the property for the "View More Details" like we can on Zillow? Even Realtor.com prominently puts the listing agent first with a link to our website. Thanks!Mon, 23 Feb 2009 13:28:48 PST