Fred Harbeson
Las Vegas, Nevada 702-374-3580
Certified Distressed Property Expert
Key Realty

The Las Vegas real estate market has endured an amazing roller coaster ride in the last ten years. Homeowners in the Las Vegas valley saw very modest price appreciation throughout the 90’s and the early part of this decade. In 2003, sales began to pick up and by 2004 Las Vegas was the hottest market in the United States. Prices shot up to astronomical new heights only to come crashing down a few years later. The 2007 and 2008 season saw the Las Vegas real estate market become as cold as ice as both prices and closings plummeted and foreclosures soared. But all things come full circle and since the summer of 2008, the Vegas market has been picking up steam and has in fact enjoyed record sales going into the summer of 2009. In fact, there were more sales in June and July of that year than during any previous month on record…including the heyday back in 2004. The continued bad news, is that after 18 months of price drops the huge gains in appreciation that we saw from 2003 to 2006 have not only been erased, but we have receded to levels of a decade ago. The average median home price in Las Vegas has settled near $130,000. Virtually everyone that purchased in Las Vegas after 1998 is now upside down in their home. It does not make a lot of sense to most Las Vegans as homes are now selling well below builder’s replacement costs.
This drastic decrease in prices has brought droves of investors back into the Las Vegas real estate market. 80% of closings in the last several months have been on REO or post-foreclosure bank owned homes. Cash buyers have been dominating the market and getting great properties for around $40 to $70 per square foot. Unfortunately, the inventory of bank owned homes is now at an all time low of under 1000 units.
This represents less than a two week supply of inventory based on the fact that the majority of the 4702 and 4602 closings in June and July of 2009 were REOs. Even though Las Vegas is the “foreclosure capital of the world”, we are continuing to see foreclosure inventory shrink on a monthly basis. June and July saw nearly 3300 homes per month revert to the banks through foreclosure, but this pales in comparison to the over 3700 REO sales per month that we saw at the same time. This disparity means that we are losing nearly 400 homes per month from the inventory of bank owned homes. The low inventory is causing heavy competition for the homes that are available. REOs coming on to the market today are creating bidding wars as investors try to snatch up cash flowing properties at great, low prices. Both owner occupants and investors looking to take advantage of great buying conditions are finding that they are having serious difficulty getting homes under contract. This excess of demand is beginning to drive prices up on bank owned homes. For months, I have touted the benefits of buying REOs directly from the banks. The process is simple and easy, and, until recently, investors could use this method to acquire great properties at great prices. But those days appear to be coming to a close, at least for the time being. There has been talk for over six months, since the moratorium on foreclosures ended in March 2009 that the banks have a surplus of inventory they are holding back. The problem seems to be that no one knows when or if this rumored inventory will be released. Until or unless that day comes, I am now advocating that investors change their strategy for acquiring properties in Las Vegas. Plan B is to buy homes at the trustee’s sale. After the notice of default (giving a late paying home owner 90 days to cure the late payment) and the notice of sale (giving them another 21days) a home is sold at the trustee’s sale. At this sale, the property will either be bought by a third party (you or I) or it goes back to the bank and will eventually become a bank owned, MLS listed REO foreclosure property. Previously, I have not advocated buying at the trustee’s sale because there are many restrictions and hassles involved in this method of purchase. Not the lease of which is that properties cannot be financed…cash must be paid at the time of sale. However, with the inventory of REO homes tightening so drastically, I am now finding that trustee sales are offering opportunities to purchase homes at 20-30% below the price that would be paid once the home becomes an REO. Buying at the trustee’s sale also eliminates the competition of multiple offers. This is where the true investor can now turn to get great wholesale deals.
Investors must continue to adapt in order to profit in today’s real estate market. I believe trustee’s sales in Las Vegas are the next step in this evolution.
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MGM Signature Towers
What a wonderful way to experience Las Vegas. Enjoying both the privacy and elegance of your residence, and the awesome amenities and services of the MGM Grand. You can continue to take in the Strip the way you’ve always done, with short stays, cramming in every bit of excitement into your visit. Or take full advantage of your own private retreat by staying longer,exploring the city to its fullest – hitting all the out-of-the-way spots you never seemed to have time for Just bring some clothes and personal belongings, and your best mix and mingle attitude. Our designers have thought of everything else. Plush furniture, luxurious carpeting and stone flooring, exotic baths, including Jacuzzi® tubs, Snaidero® cabinetry, granite countertops, flat screen TV’s, high-speed internet capability, and a deluxe appliance package. We’ve even provided the linens, towels, dinnerware, and silverware. All the comforts of a most inviting home away from home. And all the elegance to provide an unparalleled pride of ownership.
Residents feel as special as any celebrity – pampered by a courteous staff, immersed in luxury and invited to play day and night. The staff of The Residences at MGM Grand – Las Vegas is dedicated to your comfort and have perfected the art of service. As a resident owner, you can experience it each and every day.

Auction of MGM Signature Towers Sets New Record Low Comp Values
By: Glenn Plantone
I recently attended the public auction held to sell 20 units in the three MGM Signature towers located just off the Las Vegas strip. The auction was held on April 21st and was attended by about 125 people. All units were sold. MGM has been forced to clamor for capital since its flagship project, the record setting City Center development in Las Vegas, ran into funding difficulties and innumerable construction setbacks and delays. MGM’s major financial partner in the deal, Dubai World, announced that they would not honor their obligations to the project. This announcement brought the already struggling MGM Mirage corporation to the edge of Chapter 11 bankruptcy filings as they struggled to find alternative financing. MGM Mirage has financial covenants due to expire on April 29th and May 15th. There has been speculation that they may need to sell off some major assets, such as the Beau Rivage in Mississippi or the MGM Grand Detroit. Just recently, however, investor Carl Icahn and private equity fund Oaktree Capital Management have stepped up and acquired hundreds of millions of MGM Mirage bonds. Should this deal go through it might save MGM Mirage from having to sell further assets in order to stay afloat.
In the meantime, MGM’s loss was investors gain in the Las Vegas condo market. The auction saw new record low sales prices for both one bedroom and studio units in the MGM Signature complex. The top one bedroom sold for $255K and the low sold for $185K. The previous low comp for a one bedroom unit was $274K. So this sale brought the comp down quite a bit from $274K to $185K. The top studio unit sold for $200K and the low sold for $142K. The previous low comp was $174K. So again the comp came down from $174K to a new low of $142K. It will take approximately one month for these units to officially close and for the new lower comps to register in the MLS. There are still 24 REO/bank owned units available within the Signature towers. Once the new comps register, there will be another great buying opportunity for anyone still interested. I will then be advising my investors to put in some cash offers for lower than the new low comp prices and test the waters. This MGM auction, and others that are coming up shortly at different locations, are proving that high rise prices in Las Vegas are finally coming down to levels where they are extremely affordable as a second/vacation home option and even as an investment.

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Panorama Towers in Las Vegas is gaining interest because of heavy discounts due to Las Vegas luxury condo foreclosures.
Becuause of the recent addition to Panorama Towers in Las Vegas North tower, Panorama Towers in Las Vegas has attained a new level in luxury living. Panorama North Tower has amenities that clearly will confuse the buyer as to whether this is a residential condominium or a five-star hotel. From pool cabanas with satellite music to the dog park, there is no doubt Panorama North towers will attract many buyers. Current competitive prices start in the $300,000’s for a one bedroom condo to high prices for the larger condos. Panorama North Towers is perpendicular to the other two Panorama Towers and end condos have views of CityCenter or the Las Vegas mountains as just two examples. Some floor plans have expansive balconies and are unique in comparison to floor plans of the original two Panorama towers.