Have Prices Fallen Enough to Buy in Las Vegas?

Now may be the best time ever for investors to buy a home in foreclosure-slammed Las Vegas, says Glenn Plantone, whose National New Builds company based in Vegas specializes in undervalued markets."Since the beginning of 2008 the inventory of homes listed in the multiple listing service (MLS) has been slowly decreasing, while the volume of sales has slowly been picking up," he says, adding. "the average price of these homes has been dropping by about $10,000 a month." Thus, as of September 20008, homes with 20% down payments and fully amortized loans will now once again" make sense. Pantone, who says he is a full-time investor and a licensed realtor, declares that Vegas home prices are "as low as 30 – 50 cents on the dollar," making a purchase now a "great cash flow play." He also cites statistics indicating the migration into Las Vegas by residents continues unabated, providing a ready made buying public.

Renting Out for 17 Weeks Yearly Pays for Your Vacation Home

"According to government data, close to 40%, and perhaps as many as 50%, of the foreclosures in 2007 were of nonowner-occupied homes, which generally means vacation homes,"says Standard and Poors The Outlook. S&P Chief Economist David Wyss "expects this trend to continue into 2008 and 2009, pointing out that it's psychologically easier for people to skip payments on a secondary home, whereas they will scrimp and save in other ways in order to hold on to their primary home." But the article also quotes second-home expert Christine Karpinski as pointing out: "If you have a mortgage on your second home, renting it out only 17 weeks will cover your mortgage payments for an entire year ....If it's paid for free and clear, only five off-week rentals will cover costs like bills for your phone, power, cable, and association dues."

Bailout May Hurt New Vacation Home Buyers

The federal housing bailout bill, just passed by the House to relieve foreclosures and expected to be signed by President Bush, may not be great for "those who buy a vacation home, or one that they rent out, planning to make it their main residence at a later time," MarketWatch quotes Riverwoods, Ill. tax advisors group CCH. Why? The answer is complicated, for the CCH opinion, see
this article.

WSJ Expert June Fletcher on Foreclosures

Good advice:

"Bargains abound, particularly in foreclosure properties. While many Web sites sell foreclosure information...you don't have to pay an online membership fee to find them. Title companies, real-estate agents and lenders -- including credit unions -- all have information on homes in various stages of foreclosure" and
you can also find listings in local newspapers and Web sites.


BIG BUT: "you will get a better deal if you buy a house before it goes to auction, or after -- if it doesn't sell on the courthouse steps. Bidders at an auction sometimes get caught in the heat of the moment and push up prices."

-- Thanks to always-helpful columnist June Fletcher-- read full article here. Foto credit: ABC News

New "Luxury Tax" on Vacation Homes?

Beware Congress's plans for helping homeowners in foreclosure.

The House Ways and Means Committee last week approved what amounts to a hike on the sale of vacation homes. A section of the foreclosure relief bill would "make it harder for people who sell their second homes to exclude as much as $500,000 in profit from capital-gains taxes," Bloomberg News reported. The Democrats inserted it as a way to raise $2 billion in additional taxes that would be needed to offset measures designed to protect "mortgage borrowers from taxes on debt forgiven in a foreclosure." Rep. Sam Johnson (R. Texas) dubbed it "a luxury tax on retirement homes'' that will hurt coastal areas, mountain states and resort areas.

Of course, the foreclosure relief bill must still be passed by the full House and Senate before it becomes law.