Me & My Big Mouth

“And you shall hear of tax credits, and rumors of tax credits…”

2010-09-01T13:40:00.000-07:00

I’m paraphrasing from the book of Matthew here. The rest of that verse (it was, of course, “wars” instead of “tax credits”) goes, “See that you be not troubled: for all these things must come to pass, but the end is not yet.” I realize that Jesus was talking about things far more eternal than the early 21st Century American housing market, but you have to admit, it
works well anyway.

Who knows where the idea of a new round of home buyer tax credits got started, but depending on who you listen to in Washington, you get every position from, “It’s very likely,” to, “We have no idea where that rumor started.”

When asked about the possibility of new homebuyer tax credits last weekend, HUD Secretary Shaun Donovan got out of the way of that little question like you’d get out of the way of a Randy Johnson fastball. "We're going to be focused like a laser on where the housing market is moving going forward, and we are going to go everywhere we can to make sure this market stabilizes and recovers." Thanks, Shaun. I’ll take that as a “huh?”

Anyway, the scuttlebutt around the campfire has the scope of this new round of [rumored] tax credits extending beyond the first-time and move-up home buyers of last year, to also include buyers of foreclosed properties and short sales. The impetus for the [purported] tax credit is the stalled recovery of the housing sector. Some have argued convincingly that—excruciating though it would be—the housing market must be allowed to correct itself with no artificial intervention from the government. Only then, the reasoning goes, will the market naturally settle to where it would have been had not the Twilight Zone-esque spectacle of 2003-2006 occurred.

“Nonsense!” say others including Governor Charlie Crist of Florida, the only state along with, perhaps, Arizona that has come as close to Nevada in having been completely laid to waste by the housing collapse. Another tax credit, he opined "would stimulate the economy. It would increase home sales in Florida.” Crist is one of the biggest promoters of this [alleged] tax credit idea, and it points out the dilemma we’re all facing with these kind of bailout schemes. In his case, it’s, “What’s Good For My Specific State vs. What’s Good For the Country in General.”

Me? I’m conflicted, too. The fiscal and economically responsible side of me says, “Enough of this!” Let the housing market take the beating and adjust instead of keeping it afloat at the expense of the future of the economy.

On the other hand, the real estate agent side of me (the one that needs as much action in the market as possible to help keep the bills paid, the kids fed, and the wife still willing to put up with my shenanigans) says, “Hey, let’s roll! Keep those federal sops coming, Uncle Barack!”

Of course, none of this may happen anyway. Whether the housing market is going to be propped up and kept alive by artificial, taxpayer-supported resuscitation, or left to flop around and struggle for breath like a perch on a fishing dock, we have little choice but do as The Man said: “Be not troubled, for all these things must come to pass, but the end is not yet.”

It always amazes me when what I predict will happen actually does happen...

2010-08-03T12:55:00.000-07:00

A few months ago I was blathering on about how much easier short sales would be to close in the coming months. Smart bettors wouldn’t have rushed down to get any action on that happening based on my bold prediction. I was, after all, the guy who told anyone who would listen that Argentina plus the points back in ’82 in the Falkland's War was a lock.

But a look at year-to-year July closings in the MLS (not including the cash auctions that take place on the steps of the Nevada Legal News or what few For Sale By Owner transactions are still being consummated) shows that the percentage of short sales as closings rose from 10% in July 2009 to 33% this July. That’s a mighty significant number.

Maybe it has to do with the HAFA guidelines set in place in April. But most agents I talk to are still waiting for their first HAFA short sale to close. Besides, those HAFA guided short sales won’t be closing for a while anyway. So more than likely, it’s just the expedience of the banks finally wrapping their TARP-stained arms around the situation and dealing with it. Whatever the impetus for the growing number of successful short sales, it’s making life a lot easier for a lot of home buyers and home sellers these days. If you look at that white section of second pie, that increase represents human beings whose situations in life just got better because the short sale process was streamlined.

I just closed a short sale Thursday on an investment property for a couple who are starting to build a real estate portfolio to fund their retirement. They’re in their early to mid 40s, so their timing and vision are perfect. I’m proud of them.

And I’ll close this month on a short sale for another couple who are just starting out in life. The house is perfect, and it’s the classic dream come true story.

In both cases, obviously, it’s been a godsend for the sellers, too, because they got to mitigate the damage done to their credit that being foreclosed upon would have had. Times like these make me incredibly happy that I get to do this kind of work for a living.

I doubt that either of these properties would have closed a year ago. So the next time you hear a doom & gloom story about the real estate market here (it’s actually more like crud & mud than doom & gloom), just know that there’s another side to that coin. Nice things are happening for good people. And your ol’ buddy Kenny couldn’t be happier.

In a surprise to absolutely no one...

2009-12-11T15:07:00.000-08:00

The house just passed HR 4173 today that would "tighten federal regulations on financial institutions."

That seems to be the trend these days. "Tightening" and "regulating" is what our government is doing best lately (tightening and regulating everything in the country except our government, that is).

But that's not the embarrassingly predictable part of the bill. No, the bonus to all of us taxpayers is that it will also create--yep, another federal agency. Whatever else the bill provides for (mostly undoing Congress' previously ill-advised Home Valuation Code of Conduct passed this spring), it's providing us with another federal agency to pay for. The federal government, it seems, is the only sector of our economy that's actually growing.

The final shocking twist to this story is the bill's sponsor. Envelope, please..."Oh my God, it's Barney Frank."

Ol' Barn, you'll recall, was the guy back in 2003 who brushed off the administration's concerns about the fiscal viability of Fannie Mae and Freddie Mac by saying from his big chair on the House Financial Services Committee, "These two entities [Fannie & Freddie] are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

Apparently impervious to irony, Rep. Frank is calling for yet another federal agency in this bill.

The Skinny on Short Sales

2009-12-07T13:35:00.001-08:00

Diligent Shoreline readers will recall the September 2008 issue in which I referred to a short sale as “foreclosure’s clumsy and viciously irresponsible little brother” and cautioned about what a nightmarish process it was to have to suffer through. I even went as far as describing the proper way to pronounce the term “short sale” (spewed with roughly the same disgust with which Jerry used to snarl out, “Hello, Newman”).

That was then. This is now.
Don’t get me wrong, they’re still tough to deal with. They’re heartbreaking at worst and aggravating at best. But I want to reverse myself a bit on that stance by updating a couple of things.

First, the process is getting better. A lot better. Banks are streamlining their procedures; some banks are actually taking proactive measures to get things done more quickly and efficiently.

And just last Monday, the Treasury Department announced new guidelines which would make short sales simpler to carry out. The biggest change is a requirement to force the mortgage servicers to either approve or disapprove the short sale within 10 days. That’s been the most frustrating part about the process...waiting six months, only to find out that the short sale you’ve been hoping for (both buyer and seller) gets rejected.

Second, it’s absurd to carp about short sales any longer. It’s a little like turn-of-the-century city dwellers complaining about those loud, smelly horseless carriages ruining the streets. It’s just the way the world is now. There’ll be more and more of them in the foreseeable future.

How many more? Take a look at these numbers.

Of all homes that closed in North Las Vegas, Las Vegas and Henderson during the first 11 months of 2007, only 3.6% of them were short sales. That rose to 8% during the same period in 2008. This year, that figure has risen to 10.8%. During the past 30 days, the percentage of homes that have sold that are short sales currently sits at a mind-numbing 17%. If that isn’t trend enough, try this on for size. As of 12:45 p.m. on Wednesday, December 3rd, 63% of all homes in escrow here are short sales. Gulp!

Okay, no more numbers…

So aside from some number-crunching geeks and real estate wonks like me, who should care about these numbers? Well, you, for one. Because even if you’re not one of the majority of people in this town who is upside-down in your mortgage and may be facing a tough decision on what to do about it, I can guarantee you that you personally know at least ten people who are. Short sales are the most desirable alternative for most people. More than a “desirable alternative” really. More like a lifeline. Especially if the alternative is foreclosure.

Loan Mod, Loan Schmod

And if I hear another sickeningly earnest radio spot or TV ad for loan modification attorneys and services, I’m going to throw up. I really will. It’s these folks, more than anything, that have gotten me to commit to helping people this year with the short sale process if that’s what’s best for them. There’s so much lousy information out there, and so many leeches who make a living preying off of regular folks in tough situations, I want to scream. If you’re reading this blog, chances are you know me, and know what I’m all about. I want to help as many people as I possibly can in 2010. So, please, before you or one of your friends subject themselves to bankruptcy attorneys, loan modification hucksters or anyone else, please call me. If I can’t help, I’ll at least steer them away from the bad ‘uns.

Re: Fw: Re: Fw: Fw: Mortgage Crisis

2009-12-07T13:32:00.000-08:00

Sometimes I see politicians as that last guy on earth to get a chain email. Everyone knows one of these people. They’ll send you an email with the subject, “This is Sooooo Funny!!!!!” and—against your better judgment—you open it, only to see a joke or story someone sent you three years ago. And again two years ago. And again...

That was my impression this week when I read that HUD Secretary Shaun Donovan was asking Congress’ permission to tighten up the FHA’s lending practices by increasing the minimum amount of down payment borrowers were required to pay so they’d “have more skin in the game.” Yo, Shaun. In addition to invoking that “skin in the game” cliché which I believe became officially overused about two years ago, you’ve come up with an idea that’s equally well past it’s time. It’s about six years past its “use by” date.

Of course requiring more down payment is a sound policy, but it’s a little late now. Had we been using that guideline of loaning money only to people with a clear intent and ability to pay it back instead of patting ourselves on our progressive backs for the idiotically naive Community Reinvestment Act, we’d be living in a different world than we are now.

Yes it makes sense. But it made more sense the first time that email showed up in our Inbox back in 2002 when actual adult politicians were warning Congress of the recklessness of Fannie Mae’s lending policy. But now I can see this move doing far more harm than good. Now that there’s no shame, embarrassment or, for that matter, any long-lasting financial repercussions from walking away from a mortgage, it serves as a bigger deterrent to getting a mortgage than walking away from one. What we need now are more home buyers, not fewer.

Now, forward this to 20 people and you’ll get $100 from Bill Gates. Really.

A Recent E-mail Exchange

2009-12-07T13:16:00.000-08:00

A couple of weeks ago, I got an e-mail from my friend Steve Forsythe. He had a graph from CNBC and a simple 6-word question about it. As usual, I couldn't just answer the question. No, I had to ramble on and on and on...

SF:

Kenny, are these stats on target?

KS:

Yep. We were #8 as late as 2007, but are #1 with a bullet now.

We had a lot of help: A red-hot market; a lending climate that--argue as one might--had its hand kind of forced into profit-driven products; and, ABOVE ALL, the sine qua non of cultural greed all contributed to this.

Start with the 17th century Holland tulip bubble, if you like, and take it down through every 80 years thereafter until the late 19th century (when you could adjust the cycle to every 20-35 years) and you find that each generation has its own get-rich-quick, "I'm-a-freaking-genius" scandal of over-valuation which always ends in an economic disaster. Each time (when left the hell alone), the economy rises--phoenix-like--to rebuild itself until another prosperity-fueled hubris starts the cycle over again.

Las Vegas had a lot going for us to land the part of the superstar headliner of the most recent financial debacle blockbuster. All of the sunbelt hotspots occupy the Top 5 Shame list in foreclosures, because that's where the most "irrational exuberance" Mr. Greenspan warned us of was centered: Las Vegas. South Central Florida. Phoenix. California (various markets) and Texas (various markets) were where the most idiotic speculation was taking place, and that's where most of post-crash calamity has occurred.

Everyone was getting into business (the speculation business, that is) with so little money down that there is now so precious little reticence in walking away from that investment as there is so little (or in some cases, no) investment capital lost. Crazy lending led to crazy investing. Or maybe a little of the other way around.

It was madness. Mass hypnosis almost.

The Republicans will (rightly) blame such government idiocy as the Community Reinvestment Act for the problem. It amounted to governmental meddling (however naively well-meaning) into the private sector and, worse, distorting every fiscal precept upon which finance, itself, is based. The Democrats blame (also rightly) that a hands-off (actually, a hands-on) approach to banking/investment deregulation escalated the problem. (Actually, the Democrats tend to blame the entire mess on deregulation which, in my opinion, is like blaming a lack of spare newspaper spread on the floor--instead of the dog--for piles of crap on the carpet.)

But the real culprit, as it always is, is us. The public. The fat, happy public. We half-smart numbnuts think we can make a fortune with nothing down (besides our own smarts, which are really on loan from a friend of a friend) to make piles of dough. That dynamic is compounded by people exactly like... well, me. When times were wildly optimistic, we borrowed on our paper equity and bought crap. Some of it on transient goods (man, I loved the CTS), and some of it on investments to make more money.

Being swept up in optimism is a wonderful thing. You could argue that it's what has promulgated the species for, lo, these 3.8 billion years (or whenever you ascribe life on this orb to have begun). It's what fuels procreation, for crying out loud. From that ill-advised coupling in the back room at that party in college to the random bar foraging in our 20s to the very marital bed, this innate brave slurping from the well of invincibility has always led us (although, let's be honest, sometimes inadvertently) to carry on the our gene pool.

So maybe this financial disaster is just another cycle of the human species on this planet. It's the story of our America. The story of every civilization since recorded history:

We struggle.
We overcome through hard work and sacrifice.
We pat ourselves on the back for such a good job.
We live well from having worked/overcome.
We think we're stinkin' geniuses.
We take (presumably) calculated risks to better ourselves based on our own (presumed) infallibility.
We fall on our faces because we forgot that it was #2 that got us where we're at, not #6.

So here we are. On the precipice of going down the same familiar path as the Minoans, Egyptians, Etruscans, Romans, Mayans and any other fabulous culture that rolled a 7 when they were betting on the Come Line. (If you're a craps player and I screwed up that analogy, forgive me...my acumen for gambling is limited to pulling a handle and waiting for coins to drop.)

I will say that there's another layer to this foreclosure thing here in Las Vegas that doesn't put the blame on the lenders or the speculators who gambled and lost. There are many, many people who neither took out idiotically usurious loans, nor over-leveraged themselves, but simply had the misfortune of buying at the wrong time (the peak) of the market. These folks are ethically torn between continuing to pay on a, say, $350,000 loan for a house that's now (and for the foreseeable future will continue to be) worth $186,000 or just walking away.

It’s a tough dilemma.

On the one hand, they wouldn't have such an ethical quandary if they were paying on a loan for a $243,000 house that was now worth--all of a sudden, two years later--$540,000. That happened, too. But I didn't see anyone lining up at Countrywide, guilt-ridden to hand the bank a bunch of money because their asset was now worth 82% more than they paid for it 24 months ago, and all they did to "increase that value" was cook on the stove and crap in the toilet.

In that sense, it's just like any other investment.

Still, I can't easily argue with folks who say, "Hey, this is my family and our future here. I'm not going to pour bad money after questionable money into this house."

So while I'm long on opinions about all this, I'm regrettably short on answers of what to do.

It's a mess. It's a gut-wrenching mess. It's a seemingly hopeless mess.

Then again, my grandma was an immigrant widow at 30 with 4 kids during the Great Depression living in a redneck Oklahoma town where they still lynched blacks if they were out after dark (not the most cosmopolitan place for such a lady). Despite those hardships, Saleema Mahfood Adwan worked three jobs, clothed four kids and wouldn't take a penny of relief from anyone, neighbors, relatives or—of all things—the government. (see stage 2 above)

All her children rose up to honorable adulthood and she lived a rich, God-loving life of 96 years without a complaint. Hell, whatever life she carved out for herself here was better than what the Ottoman Turks would have ceded to her if she'd have stayed in Lebanon.

Okay, I've written 22 paragraphs (and 1,043 extra words) when that first paragraph would have answered your question. And besides that, I’ve veered into all sorts of unrelated minutiae which none of you asked for.

It's all opinion and observation by me. And in the end, I may be as crazy as a bag of rats.

But, the answer is yes, we’re a soiled market to say the least (which, I believe, was your original—and only—question).

Blowback from the CNBC Article...

2009-11-09T16:13:00.000-08:00

I had a lot of great dialogue with many of you after forwarding that CNBC article a couple of weeks ago. The reactions ranged from “Wow!” and “Bummer” to “WTF?” and “Should I sell my house now with all this activity?”

My friend John said it seemed contrary to a report he heard on NPR about how the Las Vegas housing market was still in the toilet. So I figured I’d address some of the confusion. First of all, the market pretty much is still in the toilet. This article is talking about the lowest quartile of the market. First-time buyers are competing with investors for cheap, small properties which will generate an immediate cash flow for those investors. The owners of these homes (the banks now) have already taken the beating.

Any real live person trying to sell a home they purchased in the past 5 years or so (or that they drew out money on via an equity line or second mortgage) is having a hell of a time selling. Distressed properties represent about 78% of the market right now because real people can’t afford to take a bath on their homes. (I’ve had 4 sales this year alone where the sellers were the heirs of dead people. The dead will take anything for their homes.)

And what the article didn’t say, was that the reason that there are so many offers on these cheap houses is because banks are creating that frenzy by pricing the homes well below market (and, often, well below what their agents are telling them to list at) exactly so they’ll get more offers and create this flurry of activity. They have no intention of selling them at those idiotically low prices. But the more people you have bidding (especially if most of these people have already lost out on other multiple-offer situations), the more they’ll bid and the higher your sales price will be.

So given this dynamic, you’d easily get a higher purchase price on a property by listing it for $96,000 than if you listed it at $115,000.

But the big kicker here is that the inventory is so low because the banks are not releasing the thousands of foreclosed homes they now own. It’s like OPEC. By restricting the supply, they’ll keep the prices higher.

New laws are going into effect that will force the banks to maintain upkeep on the foreclosed properties so they don’t lower everyone else’s property (how many dead lawns do you see when you drive around?). This may nudge the banks into releasing more properties since there will be an active financial incentive to do so, albeit small.

We wait. We watch. We wonder.

The Numbers and What [I Think] They Mean

2009-10-16T15:38:00.000-07:00

The total inventory of homes dropped from September of ‘08 to September ‘09 by 49% (from 20,793 to 10,547).

Obviously, people are buying houses at a much greater pace than last year. The biggest increase in purchases are in the Short Sale sector where closings are up 117% over last September (272 to 593). That emotionally brutal process is becoming streamlined. More sellers are opting for that option over foreclosure, while more buyers are willing to put up with the hassle of purchasing short sales as opposed to getting offer after offer rejected on bank-owned properties where 20 - 30 offers per property is not uncommon in the lower end of the price range. It’s looking a lot like it did in 2005 when we had a feeding frenzy for properties.

Foreclosure inventory, on the other hand is shrinking comparatively to short sales. While homes are still being foreclosed upon in record numbers, they are not being released into the market at anywhere near that pace. Obviously, the banks are attempting (quite reasonably) to limit the inventory (supply) to keep the prices up (demand being equal). It begs the question of how long that “inventory dam” can hold up with more homes going into the reservoir of homes than there are going out.

My guess is that after the $8,000 tax credit expires after November 30th (assuming it doesn’t get extended), we’ll see bank-owned homes being released a more brisk pace since the demand should drop off. I think prices will settle down again, at least, in that lower price range. Says me, anyway.

Kenny Shore, Realtor® · 702-339-9118 · LetsLookAtHouses.com

The October Shoreline

2009-10-16T15:16:00.000-07:00

It’s good to be back...

Man, I’ve missed doing this newsletter. The last one I did was December of 2008. Then, I got busy. Amazingly busy. Happily, enthusiastically, idiotically busy. But let’s back up...

I won’t kid you, 2008 was lousy. Sure the market was flat, but I take most of the blame myself because I used that as an excuse. I chose to whine and gripe about the market instead of taking advantage of it. It sucked. I sucked.

Then, around the first of the year, I decided I’d had enough of self-pity (like Belgian chocolate, self-pity is delicious, but it’s not exactly the most beneficial thing for you...it rots your spiritual teeth and gives you an unsightly emotional waistline). So I stopped feeling sorry for myself and started working my tail off. And whaddya know? I started getting business from everywhere. Even from places that had nothing to do with the work I was putting in.

I began working with a lot of buyers who had decided that they, too, were tired of waiting around. Everywhere I turned, there was business. I’ve never worked so hard or so gladly. And the most rewarding part of all that is the number of folks I’ve been working with who are buying their first home. What a thrill! For them and for me.

But I’m getting listings, too! It’s a fun, strange and wonderful time right now.

Whenever someone would ask Joe Merica (the owner of the last advertising agency I worked at) how things were going, he used to say, ‘Business is great, and we’re looking for more!”
I’m hip, Joe. I’m hip.

But I’ve missed doing the newsletter. The writing always took a long time, but what was really killing me was finding the time to have the things folded, tabbed and bulk mailed.

That’s when someone a lot smarter than me said, “Kenny, don’t go through all that...just email the things.”

So here is the first of the new Shorelines. I’ll keep you posted on what’s happening in the market and what to keep your eyes out for.

It’s great to be back in touch with everyone.

Kenny Shore, Realtor · 702-339-9118 · LetsLookAtHouses.com

October Shoreline

2009-10-13T13:17:00.001-07:00

After a 9 1/2 month hiatus, I'm finally back with a new Shoreline.

What Happens in Vegas Probably Shouldn't

2009-09-14T14:55:00.000-07:00

Is it finally time to rethink dual agency in this post-shift real estate world?

With Las Vegas leading the country in foreclosures, the real estate landscape here doesn’t resemble anything any of us have ever seen. The real estate rules, customs and strategies of REOs & short sales change, reverse course and evolve weekly. It’s like an old west town where The Law was kind of made up on the spot. Think Deadwood with BlackBerrys and Lexuses.

It’s actually an exciting, invigorating time to be in business. It keeps you on your toes, and keeps you up at night scheming. In my nine years in the business I’ve never felt so vital and alive.

It’s fun. But it can also be exasperating as hell.

See if this doesn’t sound familiar. You’re working with a buyer. You make an offer on a bank-owned home. It’s a good offer. Your buyer came strong. You did the research, advised your client (who, refreshingly, heeded your words) and presented a great offer.

You didn’t get it. Well, them’s the breaks. You can’t win ’em all. On a whim, you look to see who the selling agent is and discover… “Well I’ll be darned, the listing agent’s buyer got the house.”

No big deal, it happens all the time. Dual agency isn’t anything new.* Nor is the debate on whether it should be allowed or not.
______________________________________________

*Flashback [cue the harp music and the wavy video]

Back on December 23rd, 2001, a Sunday night, I finished preparing an offer for a buyer on a house we’d been to no less than 4 times. The seller was waiting for the house to go into escrow until she joined her husband in Hawaii. The list price was $285,000. We offered $279,000. We felt good. It had been on the market for 75 days. Our offer was good.

I called the listing agent after leaving my client. It was Christmas Eve Eve (or whatever that day is called) and a Sunday night. It was dark. Probably 6:30. I wanted to go home to my new bride, but I had a job to do. Could the offer wait until the next morning? Christmas Eve morning? I called the listing agent.

“James, I have an offer on Quiet Harbor. Do you want me to get it to you right now, or can it wait until tomorrow morning?”

“How much is it for”

[proudly] “$279,000”

[pause] “Wait until tomorrow morning.”

“You got it, have a good night.”

The next morning, I wandered into my office and prepared to fax the offer. The fax machine wouldn’t receive. So I called the guy again.

“James, your fax machine doesn’t seem to be taking the fax. Could you check to see if it’s on?”

“Try it again in 30 minutes.”

At this point, a more experience agent might have suspected something. Or at the very least an equally experienced, but less trusting agent might have suspected something. Not me. I tried faxing again 30 minutes later. Same result.

“James, I tried it again and your fax machine isn’t picking up. Is it on.”
“Hey, I’m driving to Utah right now. Send it after Christmas.”

Really.

A day or so later, I looked up the property in the MLS and discovered that there was an accepted offer. You already know the end of this story without having been told. The buyer’s agent was the listing agent. The punch line? I had to wait until the sale closed for that. It sold for $267,500. $11,500 less than we offered. No wonder James turned off his fax machine. If I couldn’t prove I made the offer (and when) he was in the clear. And by this time, the Seller was in Hawaii, out of reach.

I tell this story at every single listing I take when I explain dual agency. It can help the process along, but it can also be abused greatly. I let them decide.
______________________________________________

Maybe it’s time to take another look at the legitimacy of it as it relates to bank-owned homes.

One of the reasons that dual agency works well when it does, is that the agent can chip a little bit off of the commission to help the sides come together when the seller wants more than the buyer is willing to give. But with the process of REOs, that is not likely to happen. We’re talking about data-inputting fiscal information into portals, not sitting down at the kitchen table with a couple who are selling the home their children grew up in.

It’s absurd to think that agent would do that. He’s already taking short money on the listing side, so he’s certainly not going to give money away at the selling side, too.

Remind me again what other good reasons there are for dual agency? (I mean good reasons for the consumers, not us agents.)

So as unlikely as it is that any benefit would come out of dual agency in a REO transaction, the chance for abuse is that much greater. Armed with information on the three, four, five or more offers that are on the table for a property, the REO listing agent can “suggest” what price & terms his/her client should make. That’s a no-brainer. And since the distance between Seller (asset manager) and Buyer is so far, nothing could ever be established as a cause & effect. It would be one of the easiest-to-get-away-with violations in the business. Who’s to say the listing agent’s buyer wouldn’t have made that same winning offer without the help of the listing agent’s inside information? Maybe they would. Then again…

To see if this kind of abuse really does go on, or if I’m just a cynic, I did a research project yesterday. I looked up all of the REO listings that had gone under contract within the past 7 days. There were 667 in North Las Vegas, Las Vegas and Henderson. Of those, 17% were dual agency (I included listings that had “non member” as the selling agent). I did a mirror search with non-REO properties and found that only 10% of them were dual agency. I’m no statistician, but that seems like a significant difference.

Is it systemic? No, I’d say not. Because three off the biggest REO agents in this city had 0, 0, and 1 dual agency transactions last week. They seem to actively NOT seek both sides for propriety reasons.

But some REO agents are almost certainly stacking the deck. One big Las Vegas REO agent represented both sides (or, rather, one side was unrepresented, wink-wink) in 46% of his escrows. He took both sides on thirteen of the 28 homes he put into escrow last week. That came as absolutely no surprise to me. Earlier this summer, one of my buyers had an offer in on one of his bank-owned homes. We countered back and forth a couple of times, and then the agent on his team I was working with quit taking calls and refused to answer emails. Out of the blue, he just quit. When the thing went into escrow, who do you think was representing the buyer? Anyone? Anyone?

Who, for crying out loud, does business like that where 46% of their business is dual agency? Well, a veteran woman agent in town beat his record last week. 100% of her REOs she put into escrow last week (3 for 3) were represented by her. Once again, as coincidence would have it, my buyer lost out to one of her buyers in one of those three.

Is it inherently bad for an agent to represent both sides on a transaction? Many states say, “Yes.” Or at least they say the risk of impropriety and conflict of interest outweighs any benefit from that practice. And when we’re talking about selling bank-owned homes, that risk of abuse goes up in inverse proportion to the likelihood of any benefit (reduced commission by the agent to make the transaction viable) taking place.

With our industry taking a lot of criticism (some deserved, much not) in the post-housing bubble, it would probably go a long way toward improving our image if we could adopt some self-policing practices like eliminating dual agency, at least as far as the bank-owned listings go.

Somethin's up...

2007-10-14T10:40:00.000-07:00

"There's something funny going on," he said, "I can just feel it in the air."

From "Lily, Rosemary and the Jack of Hearts"-Bob Dylan

This is just a hunch, but I can just feel it coming. Like that itchy-nose feeling you get right before you sneeze.

And while I'm an absolute freak for current facts, precise data and statistical trending, sometimes these hunches can be a more reliable boat to climb into when you're heading into uncharted waters. Cervantes warned us that "facts are the enemy of truth", and I think I see where he was coming from.

Looking at the Las Vegas residential housing inventory (saturated) and the new lending guidelines (shall we say, uhhh, "a bit more rigid than we're used to"), a Realtor would have to be Pollyanna Pangloss to feel anything but dread about the market.

And yet...

I'm seeing things these days that tell me we're starting the comeback. Not that the comeback will be anywhere near as dramatic as either the "frenzy" (as we called the 2003-2005 market) or the "meltdown" (as the media has called this one), but that intuitive nudge is demonstrating signs of life in what had been a profoundly torpid market.

It makes perfect sense, really.

Honestly, it's human nature to say "enough's enough" after constant diets of bad news. Regardless of the subject, we can only take a limited amount of negative crap before we start resisting it and going the other way. Sometimes it's bad (the anger and shock of 9-11 wore off a hell of a lot quicker than it should have) and sometimes it's good (it is, frankly, about time the housing market stops fretting about housing and gets back to the business of living).

So while there's been a period of buyers waiting to "see how much further the market will slide" and sellers "holding off until 'the market comes back'", it seems that both entities are now realizing that now is now and the market is the market and to make the best of it.

That's activity, and it's the only thing that will bring us back. And I see it going on now.

I haven't done a specific, exhaustive research project of the numbers (partly because I don't have to: I've been so busy listing homes and looking for properties for buyers in the last two weeks that any research on whether the market is heating up is superfluous), so you can call this a SWAG (an acronym my friend Yvonne taught me this week that stands for Scientific Wild Ass Guess), but I'm going on record as saying that this is the beginning of the end of this slump. And by the time the numbers get around to bearing me out, you can say you heard it here first.

One last (I swear I mean LAST) word on all things Disney.

In the previous (September 27) entry I was lamenting the marketing tentacles of Disney and the ensuing erosion of something or another (specificaly my checking account, but in general, the soul of our children).

Then comes this story about how Disney has leant Mickey, Minnie, Goofy et al to the hawking of fruits & vegetables to our kids in an effort to stem the tide of childhood obesity in this country.

If they pull it off, I'll take back every single ugly thing I ever said about the company. Even if they don't make any significant difference in how many fat kids we produce, I'll give them a pass for making an effort. So there.

The Disneyland Thing

2007-09-28T13:08:00.000-07:00

Just a quick note on the subject because a lot of you have been asking about it since my entry a couple of weeks ago. But after this I'll never bring it up again.

My friend Nina and my friend Ted, adults whom I greatly respect, have both related to me that they love (love) Disneyland. Ted went so far as to say he'd live there if he could.

I don't get it.

Other adults I know take the party line that "It's not for you, it's for your kids." Yes, my kids liked it. They're kids, they like everything except taking naps and wearing clothes. They would have been just as happy to see me fall down the stairs at our house as they were at Disneyland. So, for that matter, would I. And it would have been a hell of a lot cheaper, even with medical costs what they are.

As it turns out, it probably would have been less painful, too. I've been in walking, waking agony ever since the first day there. We weren't farsighted enough to take a stroller along with us. Maybe it wouldn't have made any difference, anyway. I'm told that kids will ride in them for about 10 seconds (or about halfway down Main Street USA), at which point they will demand to walk or have you carry them anyway. (And as the old saying goes, a crying baby is a majority of one.)

So I'm carrying an irregularly distributed 35 lb. load of kid around my shoulders for an accumulated 5 hours per day for three days. I'm telling you my spine was compressed beyond recognition. If the Spanish Inquisition had really wanted to coerce a tortured confession out of a heretic, they should have used my son Baxter to mash his vertebrae together instead of using a rack to stretch him. I went to Disneyland as an already short 5'7" man and came back looking like one of the dwarfs (I'll give you one guess which one of the seven I'd be).

But enough about me and my physical problems, let's talk about me and my new financial problems after paying for the trip.

Let me first state that I'm one of those free-market capitalists who believe the invisible hand of the market will always wind up setting prices at a level which will benefit society. Apparently, neither Adam Smith nor I could have ever foreseen that the Walt Disney Corporation could somehow get an exemption from this.

Using kids to get to their parents' money is nothing new, I suppose. (I'm sure my mom wouldn't have, of her own volition, bought poisonous crap like Cap'n Crunch when I was a boy had I not insisted on it after seeing those irresistible animated commercials during the Saturday morning cartoon block.)

But it's the spectacular level to which Disney has taken that concept that unsettles me. I don't need to catalogue the list of extortions...any adult who's been there can recall with shocking clarity the number of times they had to make return trips to the ATM. Everything. EV-ERY-THING there in Captiveland costs four to five times what it would anywhere else.

Ironically, the only thing that I actually would have gladly paid quadruple the market price for (a huge tumbler of scotch) they refuse to sell in the park. My second and third day might have been completely different if they did.

I got a call from my friend Jesse the second day we were at the park. He asked me how things were going. I told him. He replied, "Somebody has to tell the truth about that place, Ken." And so this is my version of the "truth about 'that place.'"

And yet, when I look at the pictures of my kids there, I know I'll be back in a couple of years.

Monday's Can of Worms

2007-09-26T10:43:00.000-07:00

Monday I briefly mentioned the Indian family I met at an open house on Sunday. We were talking about feng shui and various other ancillary house mojo.

They mentioned they had friends who wouldn’t buy a house whose address numbers add up to 13 (3208 Elm Street, for instance) because that was bad luck.

They also mentioned that houses facing the west didn’t sell very well because it was bad feng shui. I’m as open minded as the next guy (but not, in fairness, as the guy on the other side of him), so I kicked it around with them.

I don’t know a thing about feng shui, I told them, but I do know a thing or two about the damage this desert’s afternoon western sun can do to the exterior of a house. Maybe it isn’t so much about the feng shui as it is about the sun-bleached, cracked and faded front door. Maybe it wasn’t energy flow, but scortched and dried up pyracantha in front of the house.

Still, it got me curious. So I did a down and dirty, 10-minute research project.

You know what I discovered? It’s true.

But by the slimmest of percentages.

Of the homes that faced west that were listed since July 1st, 13.2% got contracts compared to 13.3% of east- and north-facing houses, while south-facing houses did slightly better at 14.0%.

The west-facers also did worse when I looked at expired and withdrawn listings with 7.9% of them going bust, while only 7.4% of the east-facers and 7.1% each of the north- and south-facers expired or were withdrawn.

I’m not sophisticated enough to compute a margin of error on that spectacularly unscientific survey, but based on those numbers, I’m not about to buy that horse.

Other aspects of feng shui make more sense to me. I still don’t know how to calculate what homes have better energy flows than others, but I can tell you that there’s something to that.

Richmond American used to have a floorplan called the Barnegat (it had other names in various communities, but in their “Mystic” communities, it was called the Barnegat). Great floorplan. One of my favorites ever. DR Horton currently has a modification of it that’s one of their most popular plans.

Everyone that walked into it felt at home. Great home for entertaining and a smart use of the “wings” of the house with the master on one side of the great room and three bedrooms (or two bedrooms and a media room) on the other. You kind of angled off to the right between the formal living room and formal dining room to get to the good stuff.

That is, you angled off to the right in the majority of them. When the floorplan was reversed, which builders do to almost all floorplans to give neighborhoods some exterior variety, the good feeling left you. We called these left-handed Barnegats, and after seeing enough of them, we would often skip that house altogether. If energy flow can make that much difference with two exact same floorplans that are merely reversed, I can go along with it on a larger scale, too.

Besides, I’m from Oklahoma. And while Missouri is the “Show Me State”, we’re more like the “Hey, Chief, Whatever Floats Your Boat State.” That’s the flow I go with.

The Art, Science & Magic of Selling Homes

2007-09-24T10:15:00.001-07:00

With the housing market slowing to a demi-crawl, I’ve been getting inundated via email with various plots, plans and proposals to help people sell their homes.

Some of them are financial tools like point buydowns (mentioned in the August 27th entry) and owners carrying notes until the lending mess evens out.

The most emails we agents get these days have to do with someone offering to get our web site higher up in the search engines. These appear in our inbox every single day.

New magazines promising maximum exposure for our listings are commonplace, as well.

A sub-genre of real estate that has been popping up lately has been home staging companies. For a modest fee, an interior designer will come to the house and make suggestions on how to increase the appeal of your home with some simple techniques and, maybe, a throw pillow or two.

Other concepts are not so easily grasped.

About four or five times a year I get email offers to help my listings sell using the ancient oriental practice of feng shui. I have had it explained to me many times, and have even gone so far as to read books about it. But they’ll have to dumb it down a lot further for me to understand much more than the simple basics.

I can, for example, get my arms around the idea that the front door and the back door of a house shouldn’t be in a straight line, but when it gets any deeper than that, my eyes start glazing over and my mind starts wandering the way it has on both occasions when I tried to read James Joyce. Or watch John From Cincinnati.

The latest email I got was from an outfit selling statues of St. Joseph to aid people in selling their home. While feng shui has been around for 3,500 years, this practice is relatively new at just over 400 years.

The tradition of burying St. Joseph goes back to St. Theresa of Avila (1515-1582), who prayed to St. Joseph (Patron Saint of the family and of household needs) for more land to build a convent. She encouraged her Carmelite nuns to bury St. Joseph medals in the ground they wanted to own as a symbol of their devotion.

It’s caught on.

Today, people have upped the ante and now bury statues of St. Joseph instead of medals. (Some smart alecs say the reason he is depicted as bald in so many statues is that he's been buried upside-down too many times.)

Methods differ on exactly how and where to perform the burial. One camp insists that Joseph be buried in the front yard, upside-down, facing away from the house. Others maintain that he should be in the back yard, right side-up, facing the house. Some say once the house is sold, you have to dig him up and take him with you. Others say, no, you leave him in the ground at your old house and buy a new one.

Most agree that you need to say a prayer. And as long as you’re getting divine intervention, you may as well ask for full list price and that the buyers waive all inspections.

Does it work? Who knows? More than 2,000,000 St. Joseph statues are sold nationally each year, which ought to tell you something.

There are quite a few online vendors doing this, in fact. Among them are stjosephstatue.com, burystjosepth.com, stjosephhomesaleskit.com and ourfather.com. One of these sites even offers you options. You can get the Basic St. Joseph Home Sales Kit, the Deluxe St. Joseph Home Sales Kit or, if you’re in a really, really, really tough market, the Combo Kit featuring St. Joseph and St. Jude (Patron Saint of Hopeless Causes).

More boldly, yet another site charges you to have St. Joseph buried for you "virtually". No shipping, no actual statue, no real burial. Just faith, baby! And $4.95 US.

If anyone has heard of any other para-traditional methods of getting a home sold quicker, let me know via email or post it on this blog

I’m all ears.

Random Thoughts in My 50th Year

2007-09-17T11:56:00.000-07:00

The Clock, She Ticks

At 6:32 a.m. PDT Saturday morning, I began my 50th year here on earth. The very minute that I turned 49 years old on the 15th, I started Year 50.

Today, two days into my fiftieth year, I'm heading to Disneyland for the first time with my wife, 4-year old daughter and 2-year old son. I don't know what 50 is supposed to feel like, but I'm sure this ain't it.

Between Holly and the kids, I feel 20 years younger. Besides the joy I'm experiencing just sharing time and space with these three, I'm also experiencing a rebirth in learning. Just a zig here and a zag there in my personal philosophy and I'm absorbing information and opening new doors in my life at a pace that rivals my that of my kids. Amazing. Exciting!

Everywhere I turn, I see things that relate back to living and learning. Last Friday, I was pruning/training the jasmine vines we planted to climb up some chains at the front of our house.

I hadn't been as diligent this summer as I was last year. I worked for about an hour on it, whereas when I was doing it last year each Sunday morning, it would take no more than 10 minutes. Blam! It dawned on me that it works the same way with everything else in life: family; business; physical health; finances; you name it.

Gardening has always been a popular metaphor for life, dating back at least as far as the New Testament, so I'm not claiming that this is anything profound. The point is that things like that are popping into my head at all. positive things. Hopeful things. Growing things.

From what I understand (and what I see in a lot of men my age) your late 40s and early 50s are often a time of melancholy reflection and spiritual restlessness. Mid-life crisis. Male menopause. Harley. Mistress. Whatever. All that stuff will have to wait until I hit my 70s.

I suppose it's because of the young kiddos, maybe the strong and patient wife, maybe because of the things I've been reading lately. Quien sabe? Whatever the combination of events, I have the feeling that I'm getting away with something these days. I'm feeling spiritually the way I used to feel physically back in my youth in Oklahoma right before a big tornado would come through...there's a palpable excitement that something huge was about to happen.

So bring it on, Papa Time. Today, tomorrow, next week. These are the "good old days."

Abraham Lincoln and Meth
My friend Nina Radetich is doing a story for KTNV on former meth houses and homes that were used for huge pot-growing operations that are being sold in the open market these days.

Her angle on the story isn't so much that these places exist or that they're horribly toxic (I had no idea just how poisonous they are and what an enormous task it is to make them habitable), but that people are selling them without disclosing their sordid past.

Almost all of them now are bank-owned properties, having been foreclosed on by the lenders (who could have guessed that pot growers and meth makers were bad credit risks?).

Nevada Law requires homeowners must disclose all material information about the home they are selling, via a document called the Sellers Real Property Disclosure (SRPD). And while, as yet, there is no specific question on it that asks about the production of methamphetamine, there is one about the storage of hazardous chemicals such as urea-formaldehyde. That chemical is involved in the production of meth (either as a catalyst or by-product, I haven't looked into it). In that sense, there's a roundabout way for a potential homebuyer to learn if the home had been a meth lab.

But here's the problem. Banks, according to Nevada law, are exempt from filling out an SRPD when they've taken a property back. So ironically (and quite unfortunately), those who "own" virtually all of the meth houses are the only ones who don't have to disclose that they were meth houses. The law is de facto rendered useless.

Explaining this to another Realtor last Saturday, I was reminded of Lincoln's Emancipation Proclamation freeing the slaves in 1863. Funny thing, though, it only applied to the Union states where slavery wasn't being practiced anyway. In the South (where all the slaves were), the proclamation had no weight because those states had already seceded from the Union.

I'm hope the legislature will get this rectified next session. It's bad enough what that damn drug does to our community in general. At least we can tie up this loophole.

More Later
Okay, I had a couple of more things to hit today, but I see by the little clock in the lower right hand corner of my screen that it's 1:00 and it's time to hit the road to "The Happiest Place on Earth" with the wife and kids. I'll be talking to Goofy within a matter of hours.

In Praise of Home Ownership

2007-09-10T11:09:00.000-07:00

My first real entry into the grown-up world was buying a home. Even though I was 31 years old, I consider that to be the first time I actually entered the portal into adulthood.

Oh, sure, I already had a job. I paid taxes. I did battle with insurance companies. I carped about politicians (first about the Republicans, then about the Democrats, finally about both). I drank too much. I complained about teenagers not having any respect. You know, the usual adult things.

But I consider owning my own home to be my official initiation into adulthood.

I remember the first time it hit me to own a home. I mean, I literally got hit. The guy doing my taxes actually hit me on the head with my tax returns and, "Buy a house, dummy. You need the deductions."

It didn't take me long to take him up on it. I contacted a fantastic real estate agent named Laura Zook who had been in the business for 20 years (and who is still practicing real estate 17 years later!). She was a guiding light for me and calmed my every fear/worry/agitation/aggravation.

Even with that soothing presence there was an excitement and anticipation like I'd never had before during that time between having my offer accepted and actually closing & moving in. My friend Jesse told me that I would not have a good night sleep for those 30 or so days. I blew him off. After all, I knew I could handle the payments. I was actually going to be paying less for my mortgage than what I was paying in rent! And at the end of the tax year, I'd be even better off. I was golden.

He was right, though. I woke up somewhere around 2 a.m. every night and usually couldn't go back to sleep.

But it was also a thrilling time. I loved the neighborhood (Westleigh) I was moving into. It was the first Las Vegas neighborhood built west of the tracks after WWII. Cute, small homes on big lots. Lots of trees. Every time I drove someone by to look where I was going to live, I got one of two different comments. Always.

They would invariably say either, "Boy, this reminds me of back home" (wherever "back home" was to that particular person) or "This place reminds me of where my grandmother lives." I must have heard both comments a half-dozen times each. I always took both comments as sublime compliments. I felt the same way.

You notice a lot of things when you become a home owner for the first time. You realize that you have many more enemies than you ever thought possible. Rust. Weeds. Bugs. Moisture. You never gave them much thought until you own your own home (especially an older one). Now, all are seen as encroachments into your happiness and security. You guard your borders from them with a tenacity you didn't know you were capable of.

These particular borders had plenty of gaping spaces to breach.

The house was 40 years old when I bought it. And the previous 20 had been pretty rough on ol' 1218 Barnard Dr. If the house had been human, the previous owners would have been convicted of multiple counts of neglect, abuse and assault with the intent to uglify.

One of my great regrets about that period is that I somehow did not take "BEFORE" pictures of that house. It was truly awful, but I was somehow persuaded that it just needed my skillful hand to realize its charm. (That persuasion eventually proved to be correct, although it took many years to become reality.)

One could make an argument that I would be better off living in a tent in the back yard than living inside that filthy, funky place. Except for one thing, the back yard was worse than the inside. The biome of the Mojave desert is described as a "dry, tropical climate". The backyard lived up to both "dry" and "tropical". Where there wasn't dead grass and cement-hard ground, there was an overgrowth of nasty-smelling 20-foot tall trees that were probably, in actuality, giant, woody weeds.

After a couple of months, I finally brought both the inside and the outside to livable standards, but my war on mechanical decay and the insect kingdom never waned.

On the other hand, a much more pleasant, and totally unexpected, revelation of home ownership was how much I liked being home.

Living in an apartment, I would often find myself dejectedly saying at the end of a long work week, "Man, it's Friday night and I've got nothing to do." But when I had my own house (incredibly humble though it was) that same phrase would be uttered with utter peaceful contentment. "Ahhh, Friday night and I've got nothing to do!"

I think back to the carefree moments of pre-home ownership and it's paradoxical. They were filled with freedom and no responsibility. But they were somehow (though I didn't know it at the time) empty and devoid of purpose. I was adrift...happily adrift for the most part, it's true, but adrift. As you get older, though, you realize that it's nice to have anchorage.

And in that respect, home ownership is a lot like the second time adulthood forced its way into my life, that being the birth of our children. I look back on those carefree days before Holly and I had Sadie Belle when we could come, go, whoop-it-up, relax, etc. as we pleased and don't miss a moment of that era, either.

I hear the phrase "saddled with a mortgage" tossed around from time to time, and, frankly, I'm amazed that those words are put together in the same thought. Home ownership is, in my opinion, an honor and a tremendous gift. There are few things in life more satisfying than owning your own home. If that's a saddle, then throw one on me and let's giddy-up!

"Say it ain't so, Tony"

2007-09-07T13:58:00.000-07:00

Listening last night to Tony Dungy, brilliant coach of the Indianapolis Colts, speaking to Jim Gray before the game about Michael Vick's situation, the coach mentioned that he "Felt badly for Michael."

The future Hall of Fame coach broke my heart just then. Not for his sentiments about Mr. Vick, but about his grammar. He just hit my biggest pet peeve, using the adverbial "badly" when he should have used, simply, "bad".

I hear this all the time and I cringe.

Jim Rome says it all the time on his radio show. I fume.

I heard it in Sharon Stone's narration of one of HBO's "Harold and the Purple Crayon" episodes that my children watch. I wanted to fire off a letter to HBO and Sharon's agent.

I actually did fire off a letter to Sports Illustrated after reading Gary Smith's wonderful story about Andre Agassi last summer.

I felt like a creep bringing the "badly" thing up, because the whole story was fabulous. I got choked up it was such a great story. Agassi is a hero. I got to know the guy better through the story. He became even a bigger hero. And yet, I grumbled at Smith's "feel badly" somewhere in the first few paragraphs. I wrote something about their copy editors letting the English language go straight to hell in a Sports Illustrated monogrammed tote bag. I thought it was a great line.

I won't use this space to gripe about grammar too often--ever again--because no one wants to hear this kind of whining. Also, because once you open yourself up to criticizing usage and grammar, you have to be perfect yourself, which I ain't. (see there).

But one of my great quixotic crusades in life (along with getting the federal government to impose mandatory jail time for motorists driving slowly in the left lane on the highway, and enacting a law that would subject those with more than 12 items in the express check-out line at the grocery store to some kind of public humiliation like letting the rest of us hurl vegetables at them) is to get people to stop using "badly" when they mean "bad".

Last year after the Super Bowl, Tony Dungy was probably pleased that Peyton Manning finally won "the big one" after people said for so long that he couldn't. Tony wouldn't have said that he felt "happily" for Manning. Or if he learned that Marvin Harrison's grandmother had passed away, he wouldn't say he felt "sadly" for Marvin.

I don't know how that got started, but I hear it from people who should know better.

Tony, I love you, man. Gary, keep up the great stories. Rome, nobody does it better than you. Sharon, you were great in Casino and you're gorgeous, to boot. But will you all quit it with the "badly" thing?

Okay, I'm over it.

The Credit Crisis*

2007-09-05T16:10:00.000-07:00

*AKA “Crunch”, “Meltdown”, “Debacle”, “Catastrophe”, or--heck--make up your own horrific, hyperbolic noun!

Someone with access to Nexis-Lexis ought to research which story got the most ink (real and cyber) in the month of August, Michael Vick or the “sub-prime fallout”. I hate to keep harping on this myself, but as long as the press keeps telling this story, I feel compelled to tell it accurately.

Workaday journalists are pecking away on the story du jour and scaring the daylights out of the public with all the hand-wringing. Not that it isn’t scary, mind you. But it’s made much worse and self-perpetuating by the often lazy or sensationalist press who give the phenomenon a name, but do very little to break down the systematic reasons it took place.

Things haven’t changed all that much in the 700 years since the Black Plague. We know now that it was caused by a bacteria in rats. Back then, though, they were fairly convinced that it was the work of the devil. Or the Jews. Or the Muslims. Or that scary looking woman down the lane who yells at your kids to quit playing on her front porch. They didn’t have a clue as to what was causing it, but they gave it a catchy name, eh?

The story that ought to be written now isn’t about “How did this mess happen?”, but rather about “How could we have thought anything else could have happened?”

I don’t want to oversimplify this, because nothing in economics is simple. (Think about that Econ 101 class you suffered through. If you weren’t one of the 99.4% of us who were completely bewildered that first semester, then I don’t want to sit next to you on a long flight. Then again, you’re probably sitting in first class these days while I’m back in coach.) But the number one cause of the Sub-prime Credit Fiasco (oh, look, another slick name!) was lenders giving mortgages to folks with no business having mortgages.

It was pedal-to-the-metal. As bad as no documentation loans (basically, a “We’ll take your word for it that you can pay this back” situation) were, the 100% financing (no money down) loans were worse. The combination of the two has led to the current foreclosure rates. When someone has neither the means (not enough substantiated income) nor the motivation (with none of their own money down, they’ve got nothing to lose by defaulting) to pay a loan back, take three guesses as to what they’ll do.

So after 2-3 years of whooping it up with other people’s money and partying hard—business-wise—the lending community finally woke up with the current default hangover. Rubbing their eyes, and clearing the cobwebs, they found themselves wondering what happened last night and whose cat is that in the kitchen.

More accurately, the lenders didn’t wake up until the investors whose money was being used started looking more closely at their returns. It’s like your parents returning early from a trip after you’ve already invited half the senior class over to your house for a big party.

This current problem in real estate isn’t unprecedented* and it isn’t permanent. Nor is it as bad as it seems. There are still many investors out there with lots of money to responsibly loan for mortgages. Things will (and already are) beginning to change. And we’ll all get through it if, as Rudyard Kipling advised, we keep our heads when all about us are losing theirs.

*Read "Funny Money" by Mark Singer if you want to read a hair-raising, but hilarious account of a similar banking disaster (for eerily similar reasons) back in the early 80s.

Lo siento mucho.

2007-08-29T16:24:00.000-07:00

According to my friend Adriana Mendez, "Lo siento mucho" is Spanish for "I'm very sorry."

As in, I'm very sorry, but I'm headed to Mexico early tomorrow morning, so I won't get around to getting you the figures I promised Monday regarding my "cat-skinning" method of buying down points for buyers.

You know how things get when you're about to go on vacation. Or maybe it's just me. In fact, there's a good chance it's just me. I've been listening to a "The Millionaire Real Estate Agent" CD in my car lately. It's basically a "How To" book on succeeding wildly in the real estate business. The author, Gary Keller (owner of my brokerage) is talking about how it's always amazing how much work you get done the day before going on a vacation, his point being that when you're intensely focused to get a task done, you'll amaze yourself at how much you can produce.

I probably should have ejected the CD right then and there. Because if I'm trying to find out how to make a million dollars from a guy who actually gets work done the day before a vacation, he and I are so disturbingly far apart that we're probably not going to find any common ground the rest of the way through the program.

My guess is that ol' Gary has always been an incredibly focused, organized cat. The kind of kid who finished his homework on the way home from school. He probably never dreaded Sunday nights like I dreaded Sunday nights. The weight of not having done any schoolwork for the entire weekend always bore down as Monday morning grew closer. The creeping panic-discomfort would begin around the time Walt Disney's Wonderful World of Color came on at 6:00 CST. It didn't get any better during Bonanza, either. By the time I slunk off to bed I was a wreck.

I need to get advice on making millions of dollars from someone who...
...falls asleep after reading two paragraphs of anything,
...doesn't pay any attention to the road when he drives,
...answers too many emails immediately instead of time-blocking them,
...leans less toward carpe diem than to carpe manana,
...in short, I need to hear it from someone like me, not someone like Gary Keller.

That's like Reggie Bush trying to tell me how to change directions at full speed in mid-air, or Eddie Van Halen trying to tell me how to play "Eruption", or Hugh Hefner trying to tell me how to pick up women.

I guess if you need proof of my inability to have that laser beam focus Gary talks about, just read the last 6 or 7 paragraphs. A perfect attention deficit roadmap of how you get from Mexico to the Playboy Mansion West.

So, back to Mexico.

Come to think of it, Mexico wasn't even the point of this posting anyway. The point was to explain why the fabulously convincing documentation of the power of buy-downs wasn't going to be in this blog today as promised. Nor will anything else be in this blog until I get back from the jungles of the Yucatan next week.

So forgive me for the rambling. I'm going to the store now for some sunblock.

My Favorite Neighborhoods, Pt. 1 - Rancho Nevada Estates

2007-08-27T14:34:00.000-07:00

I got a phone call this morning from a man in Michigan. He's moving his family down here and wanted a neighborhood that was green. Not in the post-Inconvenient Truth sense of the word "green", but in the literal chlorophyll sense of the word. He wanted to see grass and trees outside of his house.

Whenever I hear things like this from buyers, I immediately think of Rancho Nevada Estates. This neighborhood sits on 77-acres smack dab in the heart of Las Vegas, next to the original spring-fed meadows that gave Las Vegas its name. The springs died out 50 years ago, but the neighborhood remains as close chronologically to those days as it is geographically. You can still see red-tailed hawks circling in the evenings and mornings, and great horned owls patrolling at night.

Rancho Nevada Estates could be called a "classic Las Vegas neighborhood", but it could just as easily be called a "classic Georgia neighborhood." Or a "classic Michigan neighborhood." Or Texas. Or Pennsylvania.

In fact, it's so unlike any other Las Vegas neighborhood that it almost seems out of place here.

Built in the late 1960s by the Collins Brothers, these homes all have individual character that is all their own. And after 40 years of residential forestation, the vast variety of mature trees finish the job of individualization begun by the builders.

It became guard-gated about 10 years ago. And while that makes the neighborhood more exclusive, and increased the property values in there, it keeps it generally off-limits to the rest of the city, which is kind of a shame. Rancho Nevada Estates is, in my mind, like a residential museum. As a Realtor, I am still able to cruise through the neighborhood, and I always love driving the streets just to feel at home.

Cat-Skinning...An Alternative Method

2007-08-27T12:28:00.000-07:00

With everyone thinking, reading and hearing about the credit crunch lately (it'd be interesting to see which has gotten more "ink"--actual or cyber--in the past two weeks, the credit crunch or Michael Vick), it's easy for buyers, sellers and agents to feel victimized by it.

But there are ways to offset that situation, or to at least better your odds in the current market.

Because credit has tightened, the market comes to a bit of a standstill. The "buyer's market" becomes less about saller's price than it does about buyer's ability. That's where sellers can change the equation to the benefit of both buyer and seller.

One way is to lessen the amount that a borrower actually has to borrow. The simplest way to do this is to help out with a buyer's closing costs. Pretty straight-forward, and pretty commonplace.

Another way, a more powerful way, is to buy down the buyer's mortgage rate, while retaining the same purchase price. I'll run some hard numbers for you as examples in Wednesday's blog. But what you need to know is that buydowns, carefully calculated, can benefit the buyer tremendously, and can give the seller considerably more "bang for the buck" than reducing the price by the same amount as the buydown.

Who knows when this "credit crisis" (as the media has fallen in love with calling it) will be in the past. But until it has passed, we've still got to be thinking of creative ways around it. Like anything, sitting around and waiting for it to get better ain't the answer.

Ramblings from an open house...

2007-08-25T14:42:00.000-07:00

It's a little after two o'clock on a very hot Las Vegas Saturday afternoon. I'm hosting an open house with not much traffic.

The streets here in northwest Las Vegas are eerily deserted. Super Bowl Sunday deserted. Maybe everyone's on vacation. Maybe they've gone reptilian for the afternoon hours.

One person isn't inside in his air-conditioned home, though. The next-door neighbor to the east of this house is outside working with his dog. I admire that kind of dedication (both the owner's and the dog's). If I were the owner, I'd be inside watching golf in 72-degree comfort instead of being out in the midday sun. If I were the dog, I'd be biting my owner for having me out in the midday sun.

Seeing that reminds me of my old Labrador Retriever, Moose, who I got when he was an 8-week old puppy in November of 1993.

My friend Chris loaned me a book he used when he trained his Labrador back in Shawnee, Oklahoma back in 1970 or so.

"Kenny, back when I was in 8th grade," he started out in one of those reminiscent tones that I realized was going to turn into a "Glory Days" story, "I trained my Labrador Sheeba to be one of the best field dogs in the state using this book." The book, a birthday gift from his parents, was "Training Your Retriever, 4th Edition" by James Lamb Free. Inside it was an inscription from his parents.

I didn't really want to take the book for a couple of reasons.

First, I knew myself well enough to know that--whatever my new puppy's disposition--I, myself, didn't have the discipline or desire to train this dog. I wasn't ever going to have Moose fetch downed mallards or quail for me. I'd never need to have the dog pull in my fishing nets, being 240 miles from the nearest coastline. No, all I wanted out of the dog was to hang out and think I was the greatest biped in the world. Besides, I could already tell at that young aget that my boy, who though sweet, good-natured and affectionate, was not at all bright. He was, in fact, dumb.

The more significant reason, though, is that Chris is a totemic kind of guy. He imbues (charmingly, I might add) great significance to objects. It wasn't merely the information contained in Mr. Free's book that Chris was bestowing to me. It was the book itself. The very book. It was with that book that his Sheba had become the finest dog ever to walk, etc. I didn't want that kind of responsibility. Owning a dog was less responsibility, in fact, that possessing that book.

I took it and thanked him. Then it sat on my nightstand, waiting for enough time to pass that I could politely give the treasured tome back to him without raising any eyebrows.

About a month later, I came home and went into the bedroom and let out a Wilhelm scream that they're still talking about on Barnard Drive. Moose, who amazingly had never chewed a thing in the house in his first two months there, had methodically chewed "Training Your Retriever, 4th Edition" by James Lamb Free to pieces.

Despite the fact that there was delicious irony in my dog eating the book that was supposed to have transformed it into better dog, I was, nevertheless, beside myself. THE BOOK was ruined. It was as if the Director at the National Archives had, for some reason, loaned me the Declaration of Independence for a research project, and my 3-year old got into some Sharpies and drew ponies on it.

THE BOOK had been destroyed. I don't think the National Archives would have settled for a Kinko's Xerox of the document, and neither would Chris.

So I contacted a guy I knew at Peninsula Booksearch, a pre-internet resource to locate out-of-print books. It was my only chance, slim though it was.

Amazingly, a copy of James Lamb Free's 4th Edition of "Training Your Retriever" showed up at my house about a month later. It was in better shape than the one Chris had loaned me. So I scuffed the dust jacket up a little by sliding it on my hardwood floors from one side of the living room to the other to give it just the perfect "worn look".

Then there was the inscription. I solicited one of the art directors at the ad agency I worked at to look at the original inscription (that portion of the cover had been spared). He worked on a passable forgery for two days. On the third day, he crafted a perfect "To Chris on Your 14th Birthday, Love Mother and Dad".

That made me feel kind of creepy, forging a boy's parents' signatures. I would have felt less fraudulent forging checks. But it had to be done.

I swore everyone associated with the project to secrecy. Chris would NEVER find out about the incident and the ensuing subterfuge.

I gave him back the book and thanked him for it a few weeks later.

Incidentally, he finally did find out about it. About 10 years ago, he and I were sitting around and I guess my conscience got the best of me. Without giving him a reason, I told him we had to go to my office (where the original shredded copy of the book resided). I told him the whole story and, to my relief, he was thrilled by it, especially how much I'd gone through to pull the thing off. And, of course, being a writer himself, he delighted in the same irony I had about a dog--a seemingly dumb dog--was smart enough to destroy the tool intended to put him through his paces.

Why you should buy a house right now...this very minute!

2007-08-23T11:58:00.000-07:00

For starters, mortgage interest rates are still at historically low levels. No one knows when they’ll rise again, but everyone agrees they won’t come down significantly any time soon.

But with the sub-prime fallout, and with lenders closing down one after another, is there even any money to loan? It’s a fair question; one answered by my friend David Reed, the author of three best-selling books on the mortgage industry (Mortgage Confidential; Who Says You Can't Buy A Home?; and Mortgages 101). He wrote in this blog earlier in the month that those investors who pulled out of the alternative and sub-prime, mortgage-backed securities, are looking for “a place to park their pork.”

In other words, there’s money out there for qualified buyers. Especially here in Las Vegas. (Banks gotta eat, too. If they’re not loanin’, they’re groanin’.)

And you couldn’t ask for a healthier market in which to invest. Our economy is stronger than most metropolitan areas. Clark County added more than 96,000 new residents in 2006. A nice omen for the long-term strength of the local housing market. Over the next three years nearly 20,000 hotel rooms will be added here. The Las Vegas Convention and Visitors Authority estimates 1.8-1.9 new employees will be needed for every one of those rooms. (Can you say “Demand”?) Many will need to buy a home, a lot of others will need to rent. All of them will need a roof. And if you’ve got roofs, you’re sitting pretty. Gorgeous, in fact.

What’s more, with available land disappearing here, the law of supply and demand insists that prices will increase greatly over time.

That’s the key mindset for investing in real estate. Over time. The problems we’re having in this market now is that too many people thought of real estate as a quick money maker back in the boom. Real estate is historically the best long-term investment you can have. You want to double your money quickly? Go to the sports book and take your chances. But the sure thing over the long haul is, and always will be, real estate.

Now let’s go get some!

A Remembrance of Things Past

2007-08-21T17:01:00.000-07:00

Does anyone else remember going to Starbucks as being more awe-inspiring a few years ago than it these days?

Last Tuesday evening I went into the first Starbucks I ever visited at Charleston and Rancho back in (I think) 1998 or 1999.

It was such a big deal back then. You walked in, tried to figure out what the names meant, and worried that you would be exposed as the coffee fraud that you were. All the other caf-tastic customers seemed to know exactly what they wanted. You faked your way through.

Once you finally ordered (a latte seemed exotic enough, but still safe), that's when the show began. The person who took you order would jabber something incomprehensibly fast and foreign to some blur in green a few steps away, who would, in turn, blurt the same gibberish back even louder and faster. The blur was simultaneously doing five or six different things and not, apparently, missing a beat. It was an absolute madhouse. A absolute perfectly run madhouse.

I remember thinking that mankind had evolved to a point Darwin would have scoffed at. Somehow, I felt lonely and left behind by this evolutionary mag-lev high-speed train. I knew I could never keep straight all the information flowing back and forth from Barista-to-Barista. Never. (Heck, I got fired from my last waiting job in 1986 because I couldn't keep straight the 5 different kinds of potato skins the Dallas restaurant I was working at served.)

It was something to behold.

Fast-forward to a week ago today. I was showing a home in Rancho Bel Air and was meeting my client at that Starbucks so we could get through the guard gate together in one car, rather than have to time our arrival precisely and deal with the guard in separate cars.

I was uncharacteristically early, so I went in and ordered a short (tall) cup of coffee.

I don't know if it's universal at all Starbucks now in 2007, but the frenzied pace was no longer there at that particular location. That crazy mile-a-second cross-talk was nowhere to be heard.

There was also a dramatic absence of activity on the part of the Barista. Gone was the flurry of activity of a person working with the urgency of a bomb squad detonation team. It was replaced by the same general lack of enthusiasm you get when you ask a teenager to...well, to do anything (take out the trash, pick up the clothes on the floor, quit slouching and act like you actually love your family).

The magic, sadly, was gone. But the coffee was still good.

French Lessons

2007-08-21T13:17:00.000-07:00

The French have an expression après la gala which translates as “after the party” and refers to that vague sense of sadness that follows a really good time. Like, for example, after you come back from a wonderful vacation and have to face the real world again. The greater the fun was, the more acute the sadness is when it’s over.

I was thinking about that phrase this week when ruminating over the current Las Vegas housing market. These days are definitely “after the party” of 2004-2005. Back then, home builders, real estate agents, mortgage lenders, title companies, appraisers and home inspectors were all hosting this party. The general public, especially home owners, were the guests.

It was like a consequence-free free-for-all. Sellers were getting record prices. Homeowners were becoming multiple homeowners. It was la belle époque for everyone related to the business of home sales.

So it’s not surprising that we all should be feeling a little blue now that that party is over. We’re seeing the real estate equivalent of a sea of empty bottles and full ashtrays scattered across the living room.

But it isn’t the end of the world. It’s just the end of that particular party. We’ll clean up the mess (and what a whopper of a shindig we’re cleaning up after!) and we’ll get back to the real world. And, too, we’ll be having another party before long.

Maybe not the lampshade-wearin’, stereo-blastin’, cop-callin’ party we had before, but good times, nonetheless.

My 10 Favorite Things About Las Vegas

2007-08-16T16:58:00.000-07:00

In no particular order whatsoever…

Weather
Except for a few weeks in the summer this is just a great, great place to live. And it’s more than just nice temperatures and low humidity. It’s the blue skies. I lived one summer in the Midwest. It was a fun place to be. Festivals every month. Get-togethers every week. Wonderful people who embraced me from Day One. But the skies were gray-ish for all but about 3 days the entire time. Gotta be blue. Gotta be.

People Visit You
The majority of people over 30 in this town are from somewhere else. And one of the fun things about living here is that you always get visits from friends and relatives all over the country. They may not actually stay with you (better, if they don’t, really), but they will be here sooner or later. So it’s a way to keep up with everyone without having to go to the expense of flying/driving to see them.

Restaurants
For those of us who’ve been around for 20 years or more, we can tell you that it wasn’t always this way. Back in the day, the best restaurants were the steak houses in the casinos. There was (still is) Andre’s and Pamplemousse, but not a lot of imagination outside of that. Now we have world class dining. And you don’t have to go to a Strip hotel to get it. Once those standards were raised, it elevated the whole town. Rosemary’s, locally owned/operated is probably the best in town. Both of the two Nora’s are great. Marché Bacchus. Todd’s. Hannah’s. There are fantastic sushi bars everywhere. We’re a big town now. In my opinion, we’ve gotten into the same category of New Orleans, San Francisco and New York where you can just dumb-luck stumble your way into fantastic out-of-the-way restaurants that aren’t even on the map.

Pacific Time & Football Season
We don’t have to wait around for the games to start, and we don’t have to stay up late for night games to end. How great is it to roll out of bed, head to the neighborhood parlor, throw some bets down and be back at the house for breakfast and kick-off! Giddy-up!

Red Rock Canyon
What can you even say about this place? We’re so lucky to have something this beautiful, this close. Even if you don’t take advantage of the trails and the climbing, this is a wonderful “backyard” to show off to visitors without ever leaving your car.

Mt. Charleston
Same story as Red Rock Canyon. It’s a little farther away, but it’s also a half-dozen ecosystems away! There may be other places with a shorter distance from desert floor to alpine woods, a greater climate shift in just 45 minutes distance, but I don’t know of them. What a great psychological adjustment, too! Someone needs to write a song about the place.

McCarran Airport
We’re lucky to have an airport right in town, especially when we’re running late. It’s easy to get to and easy to get around in (post 9-11 security notwithstanding). Plus, there are always a lot of flights in and out.

Opportunity
When I moved to Las Vegas in 1984, the first thing I noticed was the liquid economy. Back in the post-oil bust economy of the early 80s Oklahoma, nobody was making any money and nobody was spending any money. Here, though, money just found its way into my hands. I couldn’t hold on to it very long, but at least I got to play with it for the brief time it was in my hands. It’s still that way. And opportunity is still around. Maybe more opportunity than anywhere else in the country, since the attitude in business and everything else here is, “Hey, let’s do it.” It’s the contrapositive of that line from New York, New York. “If you can’t make it here, you can’t make it anywhere.”

Casinos
I hardly ever go. And if I do, it’s to eat or see a movie. But it’s still fun to have them, even if it’s just to gamble once or twice a year. I take that back. Now that I think about it, I do gamble more than once or twice a year, but at the sports books. For some reason, that seems a little different than “gambling”. Even so, it’s only during football season and the Kentucky Derby/Preakness/Belmont Stakes that I even get to the sports books. Even if you don’t gamble, the money generated by gambling allows the casinos to provide other fun things like the Cirque shows, concerts and other headline events.

Family
Okay, this isn’t something that everyone can relate to, but it’s my list, after all. I’ve got an incredible family of in-laws here in Las Vegas. Aunts, uncles and cousins by the dozens all make this just a wonderful, wonderful place to live. Whether it’s my father-in-laws gourmet meals or the whole giant lot of us getting together for a day of Family Olympics (I won the overall Bronze, by the way), there’s always something great going on.

Musings on the Housing Market

2007-08-08T11:01:00.000-07:00

"Bad news on the doorstep. I couldn't take one more step."

-Don McLean, American Pie

There is a sort of self-fulfilling doom aspect to what's happening in Las Vegas real estate these days. The facts are these:

There is unprecedented inventory (bad for sellers of average, nondescript homes, bad for real estate agents with average, nondescript listings; okay, but laborious for buyers and their agents).
There are fewer buyers able to get loans now than there were last week, and far more than there were last month.

The first of these is a cyclical development, a natural cause-effect condition resulting from the Las Vegas housing boom of 2004-2005 (my data says it began in the summer of 2003, but we'll go with the commonly accepted dates here). For about 30 months, everyone and their uncle were buying houses, condos, land, whatever they could get their hands on with the idea of flipping them and making $30,000-$80,000 in six months. And for about 6 of those months that was true. Over 50% of the homes being purchased in Las Vegas and Henderson were second homes (even if they weren't listed that way with the lenders, which we'll get to in a second).

Somewhere in early 2006 (again, my research shows it was more like mid-2005) we all collectively woke up and saw that the emperor was in his skivvies. We all bought into that craze of activities and finally realized that it wasn't what it appeared. "The Frenzy" was over and we were faced with the task of having such a surplus of homes on the market that not even the fastest growing metropolitan area in the country could keep up with.

Of course we should have known that there was something fishy about all that. Just like we all should have known that there was something fishy about 1998 when Mark McGwire and Sammy Sosa were both breaking a home run record that had stood for 36 years. But, hey, when you're all caught up in something exciting, you don't always see the pitfalls of it. Kind of like dating transitioning into marriage.

Good lord, am I getting sidetracked here!

Okay, you get the picture. Too many homes. Okay, fair enough, but with Las Vegas being the demographic monster that it is and has been for a decade, that inventory would get absorbed soon enough, right?

Well, that's where the second issue rears its head. Loans were free and easy back then. If you could fog a mirror, it seemed, you could get a loan. Wall Street had started getting into the mortgage business as an investment stream and money was flowing. Interest rates were at a 40-year low, there was plenty of it, and guidelines had softened to [in retrospect] irresponsible levels.

No documentation of income? No problem. We'll just put you into this loan.
Don't want mortgage insurance? We don't blame you! Here's a way to avoid it.
Bad credit scores? Hey, we were young once, too. Here's a loan for you.
Can't afford this payment? Well, let's get you into a comfortable adjustable.

In short, too many questionable loans were being made to too many questionable people. And, predictably, within 3 years, a lot of those loans were being foreclosed on. As foreclosures and short sales began creeping up, even more homes came onto the market.

Without getting too deep into the mind-numbing machinations of macro-economics and finance (which, I must confess, I daydreamed through in college), those huge reserves have dried up. These were, after all, investments for these fund managers. The investments turned out to be not so good (homeowners in droves stopped paying their mortgages), so they have started putting their money elsewhere.

The bottom line of all that is that there is less money to be loaned and far fewer entry points into mortgages. The answers to the questions in those bullet points a few paragraphs ago are now, "Too bad!", "Tough luck!", "Can't help you, bub." and "Looks like you'll be renting a bit longer."

And if this new-found frugality in the lending business isn't bad enough, the piper has come a-calling on the lenders lately. There's a web site (I've forgotten the name of it) which lists all the mortgage companies who are going out of business. Each time another one bites the dust, it goes up on that site.

That's the "bad news on the doorstep" part of this scene.

But the "couldn't take one more step" part is what's really got me going today. Buyers who can and do qualify to purchase homes now are so paralyzed with fear about "what next" that they're reticent to move. At a time when inventory is at an all-time high and buyers wield the most power they've every had in this market, some are still taking a wait-and-see position. The market's a funny thing.

It goes back to Monday's posting. The real estate market in Las Vegas will be back as strong as train smoke. No one is going to get hurt buying in this market right now.

Can I get an amen?

Red Rock and Red Rock

2007-08-07T09:18:00.000-07:00

My family and I live somewhere between Red Rock Canyon and Red Rock Casino. Years ago, when I lived in the middle of town, down in Westleigh, I used to drive up Charleston to Red Rock Canyon for hiking about twice a month. I remember one day seeing a sign way, way out on Charleston saying something about "Future" this and "Summerlin" that.

I was outraged that they were encroaching on the Red Rock Canyon area. (Outrage came much easier to me when I was younger.) Summerlin sounded disgustingly "yuppie" (never mind that I was, in every sense of the word, a yuppie myself).

Next, I imagined, there would be a McDonald's sitting on the Lost Creek trailhead. And had I known what a Starbucks was back then, I'd've fretted about one of those smack dab in the middle of Calico Tanks.

Fast-forward 5 or so years and a wife, a daughter later, a real estate career and a home in The Pueblo at Summerlin later...

The first day--I mean the minute they started releasing lots in The Vistas at Summerlin (practically on the very spot where I'd seen the offensive sign years earlier), I was the second guy in line to get one of them. I was one of those godless yuppies who were going to buy a home right in the back yard of Red Rock.

Age and upward mobility will do that to a guy.

But the funny thing is that we hardly even get to Red Rock now that we're just 5 minutes away. (I'll blame a lot of that on having a 4-year old girl who's too girlie to be bothered by hiking, and and a 2-year old boy who's too Neanderthal to stay on a trail or to heed simple commands like "Stop, that's a cactus!" or "Don't eat that burro poop!"

As rarely as we get to Red Rock Canyon these days, we find ourselves at the Red Rock Casino more and more. Ironically, a casino is more family friendly (at least friendlier to our family) than nature itself.

Friday night, for instance. We went to the theaters in Red Rock to see Hairspray. About 30 minutes into the movie, Baxter decided he wasn't about to sit still any longer (even though we had the best seats in the house: the first row of the back section with plenty of leg room to roam and a guard rail in front of us).

Holly & Sadie Belle stayed to watch the movie, I took the boy out and wandered the hallways.

Being all boy (that part of his soul which isn't the aforementioned Neanderthal), Baxter discovered quickly that there were slight ramps in the long hallway that fed each theater. In a boy-second, he conceived a game whereby he would run down the ramp at full speed, screaming and waiving his arms until he got to the bottom where I was kneeling. I was his crash barrier. I'd puff out my chest (make that belly) and he'd do the same in preparation for impact. In each case, I was more an immovable object than his resisitable force could cope with. He'd explode backwards onto his fanny, let out an animal-like grunt, laugh himself silly (or "thilly" as he pronounces the word) and get back up for another run down the ramp again.

I think we boys had as much fun out of the theater as the girls did inside it.

The Fertittas couldn't possibly have forseen that kind of absurd father-son slapstick when they designed the theater foyers in Red Rock Casino. But it works.

And it's kind of funny, now that I think about it. I was outraged that Stations was building a casino so close to Red Rock Canyon, too. Now I have embraced both Summerlin and the Red Rock Casino.

I must be getting old.

Is it as bad as all that?

2007-08-06T10:26:00.000-07:00

I just got off the phone with an old friend, a local real estate agent. He's gone back to the job he had before getting his license.

It's beginning to be a familiar story. People are leaving the business as fast as they got into the business between 2004-2005. The reason is obvious.

Unless you don't own a television, never see a newspaper, or are out of contact with every other living person you know, you're aware that the housing market in the US (and especially here in the Las Vegas area) is very down. Depending on who you listen to, the outlook ranges from "apocalyptic" at worst to "couldn't suck any worse" at best.

Those of you who know me know that I'm not the optimistic type by nature. Far from it. But not pessimistic, either. More like cautious. Skeptical, but not cynical. I don't look at a glass and say, "It's half-empty." I'm more likely to look at it and say, "Whatever is in that glass, I'm not sure you want to drink it."

So when something bright and sparkly comes out of my mouth, it's been thought through and vetted pretty thoroughly. And I have to go on record on the subject of the Las Vegas real estate market as saying, "Hey, it's rough right now, but it's coming back, and coming back in a big way."

With the staggering commercial development that is on the books (MGM Mirage's CityCenter, Boyd's Eschelon Las Vegas and REI Neon's upcoming Project Pulse--which is bigger than either of the first two) it's undeniable that we are going to grow enormously within 3-5 years. More growth in both population and capital than we've ever seen.

The current housing glut and the current lending crisis will--grim as they are at the moment--be faintly remembered by the end of this decade.

About this stuff, I'm not only saying there's plenty of water in that glass, but it's going to taste pretty good, too.