That being said, I need to relay a story that happens all too often.  An FHA buyer submitted and had accepted an offer on a beautiful one story home in Summerlin.   His offer was equal to the last sold model match, which sold only 2 months earlier.  When he received his appraisal, it came in $21,000 light of the contracted price of $180,000.  The last sold model match sold for $180,000.  The appraiser felt it necessary to reduce the most recent sold comparable by 5%/month to accommodate what he said was a declining market.  The prices in this sub-division haven’t fallen at all in more than 15 months.  So the buyer, being stuck with this appraisal has no choice but to withdraw his offer and try to find another home that will appraise.  In the meantime, an investor that wrote a cash offer that doesn’t require an appraisal, will end up getting the home for $172,000.  That will help justify the appraiser’s work and force our market to slide again.

When an appraiser doesn’t do his job correctly, it impacts so much more than one deal.  This real estate transaction, could have served to help stabilize our values and put an owner occupant in a home, instead it de-stabilizes our market and created another rental.

There are some that believe the banks loaning money have implemented procedures to insure that appraisals come in low.  The ironic part of that is that the banks own most of the homes on the market and they are serving to keep the prices down on the very product they are selling!  I myself, don’t believe they are doing that, but I do believe they should be helping all of us to insure that appraisers can be held accountable for bringing in low appraisals.

I know that there may be people that believe that I’m just another Realtor complaining about appraisals because it’s hurting my commissions.  I can assure you that my rant is about what’s fair to regular home buyers versus investors.  I actually help many investors buy homes and I believe in real estate investment as part of anyone’s financial portfolio, but I also still believe in the American Dream.  I know it’s been a nightmare the last several years, but if we are going to go back to good times, we need to have an environment that promotes home ownership.  I’m not in favor of “no money down” or going back to the days of loaning money to anyone that can fog a mirror.  I’m in favor of giving families an opportunity to own their own home, instead of renting it.

Well, that applies to our real estate market too. The most recent development surrounds our current inventory. As of this moment we have 5,474 single family homes available in our entire multiple list. We have 13,113 single family homes in escrow. We have closed 3,195 homes in the last 30 days.

That means we have about 45 days worth of inventory available. One of the basic premises of economics is that when an inventory of available product is low and the demand is high, prices go up. That’s not happening though. There are three reasons that pricing has not reacted to the inventory. First, the low inventory is partially a result of the lack of bank foreclosures over the last 5 months. The banks will eventually start bringing homes back to market. I do want to caution buyers however, there aren’t as many out there as you think. It’s likely that once the banks fire up their machines again the output will be the same or even less than it was last year. That’s because the banks are liking short sales. The second reason for prices not moving is the appraisals. You have heard me whine about this before, but it’s still happening. Appraisers just find it easy to bring homes in low and there is no way we can get them to allow prices to start moving in the right direction. The third reason, is that buyers are still cautious. There is a real sense that we may see another downturn in pricing as a result of either interest rates going up, or demand drying up.

All of these reasons have some validity. There will come a day, in the not too distant future when prices will start to rise. That’s when the buyers will all want to buy.  Some of the wealthiest people in our country made their money in Real Estate markets just like this!  Pay attention buyers.  You will be wondering in 5 years why you didn’t buy now.

Here we are in February and I can say that I am already exhausted with the daily clamor of the politicians in the crescendo of promises and insults. Some may say it is a sad commentary of a political system gone awry; it is however, the most dynamic and representative system in the world for providing a country’s leadership. It has its faults and drawbacks; it is a system that probably needs an overhaul; it divides and unifies at the same time; but in all its lackluster it shines as the premier political system in the world. Even though we may have grown tired of the bombardment of political messages filling our media and airways, take a deep breath and relish that we all have this opportunity to participate in this vibrant process, now and in the coming months. The outcome of our efforts will shape the future of this country during a period that demands the best leadership possible to meet the challenges in preserving world unity, peace and prosperity. Enjoy and partake in this greatest expression of our freedom.

They have since been resistant and perhaps even defiant in wanting to proceed with foreclosures.  That is the concern.  Will the banks allow these additional requirements to impede their ability to get homes to market?  While they may not be pleased with the process and it will cost them more time and money, I think they will get their procedures in order and eventually we will see the market stay on its course.

That means that while we are in the holiday season and approaching a new year, the number of foreclosures will remain low, but they will pick up in the first or second quarter of next year and the inventory will continue to remain at the levels we have seen in the last 30 months.

The impact on homeowners desiring desire to short sale their homes is still unclear, but the banks have all concluded that short sales are far more favorable than Foreclosure and this legislation will certainly not change that opinion.

There are many lessons that can be drawn from this near calamitous experience. What I find fascinating is that singularly each occurrence: a pedestrian crossing a street, vehicles entering this particular seldom used intersection, would be routine and uneventful. However when each happening occupies the same space and time the outcome is dramatically altered.

The real estate market in Las Vegas is an example of a convergence of seemingly ordinary and innocuous events in a business environment that was deemed for years to be safe and bullet proof. The outcome created has been near fatal to our financial security. A slow down in construction, a rising unemployment, a diminished tourist trade, non diversification of the local economy, singularly these economic conditions could have been dealt with, but collectively created a Titanic event.  We have experienced all the conditions that feed upon themselves and aggravate the spiraling conditions. Local, state and federal governments have yet to address the causative factors but work on peripherals that prolong the conditions and expend diminished monetary resources unwisely. Our time will soon expire to effectively create change. We must seek out and support leadership that has the interest of populace, demonstrate sound economic beliefs, and are not motivated for personal and political gain.

Of course I am being a “little” over dramatic. But the truth of the matter is, we all from time to time are disappointed in those closest to us. Sometimes we are surprised by their reaction, or what we may consider as an over reaction, to our “choice” words of encouragement or misguided suggestions. It is these times that task our abilities of patience and finesse, particularly when we know that all misunderstandings could have been prevented if we had not projected our point of view on the situation and others.

In business, misguided points of view or expectations are what is responsible for more business failures than anything else. False projections on the worth of a business; sales projections that were never achievable; contractual promises that were unrealistic are examples of expectations gone awry. Many times the foundation of these failures rests in a concept of our own worth and achievement, or the ungrounded potential of the business’s ability to excel in other than a perfect market condition.

Let me bring this a little closer to what I experience in the real estate market. I find more often than not that buyer and seller’s expectations are what cause the inability to bring a sale transaction to a satisfactory completion. Sometimes our expectation of the worth of a property may far exceed the reality of the comparable sales. Sellers sometimes feel that all potential buyers should be as credit worthy as they are; after all they acquired the property when values were elevated and dutifully made their mortgage payments on a debt that now exceeds the worth of the property. Buyers believe that no matter what the listing price, it far exceeds the value of the property, and their expectations of depreciating home values are corroborated daily by the media.

Expectations are what keep me in business. A buyer or seller will have his or her own perception, wrong or otherwise, of how their sale or buy transaction will be consummated.  The Realtor lives in a world of melding the expectations of both parties and bringing them to a level where both can be comfortable in the outcome. It is a challenge! I love my business!

On the first count, the real estate market in the past few years has fueled significant interest that has been a ready source for topics. I also have been fortunate to be the beneficiary of interesting and meaningful life experiences in and out of my work that provide the fuel for my creative juices. I enjoy sharing these experiences.

On the second count, this past month, my efforts to provide an appealing and timely newsletter were reaffirmed once again. I was pleasantly surprised when a new client who had been receiving the monthly publication for several years expressed that they look forward each month for its arrival. I asked them what they find interesting, and surprisingly, it was not the most current properties or comparables on the market in their neighborhood, but the narrative that drew their attention. Of course I thanked them for their sincere and unsolicited thoughts. Later, I thought to myself how special their words were to me. It actually brightened the rest of my day and affirmed that my efforts were not in vain.

The lesson of that day was very simple and clear to me; we can make a difference in someone’s life with little effort. A spoken word of a sincere thought that tells them that they are appreciated for what they do goes a long way. I now try to carry that thought daily to all those who provide a service to me. It could be food server, store clerk or maintenance worker; anyone who provides a service that deserves our appreciation, they will also relish an expression of our satisfaction. You might even include those closest to you. I am sure that family and friends are no exception.

I promise to keep this newsletter helpful and upbeat. I have come to the conclusion long ago that I have no control over what is beyond my abilities to change. Simple approaches provide best solutions. This was reinforced recently from a well-trusted client that had gone through many family difficulties and had experienced severe financial set backs at the same time. They came through not unscathed, but emerged with their family and finances intact. They also gained constructive life lessons that were an example for others to emulate. As I said, the process was simple: they learned to refocus and trust. They chose to seek what was positive and good in their lives and not dwell on negative and unmanageable events. Similar to the old adage of dwelling on the one half glass filled. It is a process they approached with sincerity and resolve. They achieved it only by introducing the most important factor. Trust in a higher power that will provide inspiration; trust in themselves and their ability to overcome adversity; and, trust in their family and friends who surround them with their love and support… More meaningful life experiences that need to be told.

Traditionally, April starts the season of preparation for the school aged families and retirees contemplating a household move to our City. It is now serious time for those who have been vacillating between their desires to achieve home ownership and the financial capacities to match those wishes. For existing homeowners, April marks the perfect time to “spruce-up” your property with a little yard cleanup, paint or even a landscaping makeover. This truly is the time to maximize the exposure of your property. I have many simple, low cost ideas of how to add value to your property, or if you are ready, to prepare it for sale.

The real estate picture to some is bleak; to others it once again presents opportunity. Investment perspective, insensitivity to risk aversion, and timing influence our real estate decisions today more than ever. No one can afford to make an ill-conceived financial move of this magnitude. The ability to recover from poor decisions may take a lifetime, or for some will never be achieved. Now more than ever, the perspectives of those who have experienced the ups and downs of this outrageous market are invaluable.

When I began writing this article my intent was not to commercialize the services of the Realtor. However, I have seen over the years that people who have been successful in business and investments surround themselves with those that they trust and have the expertise to provide constructive, objective and knowledgeable advice. It is no different if your intentions are to sell, buy, or even rent property in today’s market. Take advantage of the know-how that is available to you, even if you believe that an individual situation is beyond the abilities of the real estate professional. Keep in mind that they also surround themselves with the best available experts that support the industry and are available to facilitate and most importantly “make clear” your decision path.