Archive for February 1st, 2010

Short Sale Activity in the Las Vegas Real Estate Market

Monday, February 1st, 2010

It’s entirely possible that a fundamental shift is occurring in the Las Vegas real estate market that could have important implications for the rest of the country. As we have been reporting in this blog for over a year now, it remains almost impossible to buy a foreclosure property in the number one foreclosure market in America. Unless you plan on paying cash and bidding over list price, your chances of success are shockingly slim. Why is this? The inventory of available foreclosures for sale in the Las Vegas MLS remains anorexic. There are more theories about why this is so than there are speculations about the Kennedy assassination, so there’s no point in even trying to parse that subject yet again.

In any event, the new development in our market that could be of national significance is the increasing prevalence of successful short sale closings. As a percentage of overall closing activity in the resale sector, short sales are steadily approaching 25% of the market, and are poised to climb higher by many estimations. On the upside of this issue is the simple fact that the banks score a better deal for themselves with a short sale as compared to a foreclosure. In addition, the feds have jumped into the process in an attempt to encourage the banks even further …

The Treasury Department is offering incentives on short sales by providing a $2,500 subsidy, $1,000 to the servicer and $1,500 to the seller for moving expenses. In addition, investors can get $1,000 by allowing subordinate lenders to get $3,000 in proceeds from the sale. The program is effective April 5, but servicers can implement it earlier.

On the downside, the logistical hurdles (and sheer span of time) in getting a short sale approval from the banks on a Las Vegas home have been a bureaucratic nightmare up until now. I can’t tell you how long and frustrating this process has been in the past. However, Bank of America is supposedly preparing to lead the way to a brighter future in the form of standardization and automation of the short sale approval process. Where is the “beta” test market for this newfangled short sale administrative and efficiency miracle? Many are saying that it’s right here in Las Vegas, Nevada. Stay tuned !!