Esko Kiuru - Las Vegas NV Mortgage Consultant

Moody's Economy.com analyst believes housing values will take a long while to regain the levels they reached around 2006, the peak year of this recent ultra expansion. Prices went up at a rather steep curve and then hit the breaks and plunged at a breath-taking velocity. With that a lot of other economic fundamentals were thrown out the window, too, and there apparently are the seeds to the sluggish real estate recovery.

Housing values will take 20 years to reach the earlier high point in California and Florida, the Moody's Economy.com forecast says. That's possible knowing what those states have gone through. Arizona and Nevada are conspicuously absent in it, although they are generally considered among the four most bubbling ones and then later the most tormented ones, sporting as severe mortgage foreclosure figures and stagnant housing market conditions as the other two.

Southern Nevada - Las Vegas, Henderson, Summerlin, Green Valley, Nevada Trails, Eldorado Highlands and Mesquite - then should look forward to getting the prices back sometime under 20 years. Provided that this report proves somewhat accurate. 10 years is a long time, 15 even longer. It could easily take double digits. To achieve that, let's say 15 years, depends on several key market fundamentals that are currently out of balance.

Mortgage interest rates today are very reasonable and home prices in Southern Nevada at ten-year lows that together would at first glance signal robust demand and possibly a nice-looking recovery on the near horizon. There are some noteworthy obstacles, however, that keep a lid on that for now. Home loan underwriting requirements are still strict, unemployment in Las Vegas is over 13%, down payment money is scarce and the move-up market is stagnant due to the severe upside down factor. Lot of parts that need fixing.

Las Vegas real estate sector should be on its way to a decent recovery once the employment in the valley and the entire nation, for that matter, improves. The sooner that happens, the better. The average median income that lagged way behind the rapid price appreciation and the spread eventually led to the head-first crash is pretty much covered, as values have plummeted. It's the other fundamentals that need help now.

When mortgage financing was still widely available here a few years ago and housing prices kept on racking up steady gains year after year, the foreign purchaser often thought he'd found the ultimate in property ownership. Heck, many Americans thought so, too. Then things on Wall Street and in Washington got out of control and the word meltdown was fast becoming a popular way to describe what happened. Not only to the real estate market but the entire economy. It got ugly.

International real estate buyers learned their lesson pretty quick and have scaled back their enthusiasm toward our product - single-family house, condominium and townhouse - according to a recent NAR, or National Association of Realtors, study. The survey was done for the period of end of May 2008 to end of May 2009. Around 154,000 homes were sold to foreign purchasers during this 12-month time span, down from about the 170,000 measured during the previous study. Actually, that is not all too bad, considering that the recession is global, affecting just about all the key countries from where past activity has hailed from.

Mortgage availability has also played a crucial role in this. Getting well-qualified local borrowers approved is tough enough, so getting the same done with foreign applicants is twice as cumbersome. Mortgage lenders see more risk there and rightfully so. As a result, nearly half of the sales have been cold cash, says NAR. Once banks begin standing steady again, the underwriting guidelines will predictably loosen up, to the delight of everyone.

Florida was again the most attractive destination for international real estate buyers, easily claiming 23% of the market, per NAR. Next came California with 13%, Texas with 10.7% and Arizona at 7.1%.

Las Vegas area likely represents much of Nevada in the survey - offering high-profile Strip condominiums and several popular communities like Summerlin, Henderson, Green Valley, Nevada Trails and Seven Hills - but failed to break into the top four. It must be right there, though, knocking on the door. At least Canadian and Chinese prospects have been busy checking into opportunities here in Las Vegas for vacation home and investment purposes, knowing that prices are nowadays eye-appealing indeed. Mortgage constraints are slowing them down, though.

In all, foreign buyers deem U.S. real estate very positively. It's a desirable location, say 40% of them. 31.8% consider it a profitable investment, although the last few years couldn't support that, but long term it likely is true. So, when the housing market conditions improve to "normal", it's a good bet the foreign buyer will be back as eagerly as before.

MGM Mirage's CityCenter project going up right on the Las Vegas Strip received some very good news from the U.S. Green Building Council. The mammoth upscale undertaking won't open until December, but an otherwise tough year for the gaming firm is finally showing a peek of the sunny side of things as finishing touches are being applied there.

LEED, or Leadership in Energy and Environmental Design, gold certification for the development it has sought from the onset has been granted for some of the components, including the non-gaming condominium and hotel tower Vdara. Receiving the same is the 4,000-room hotel Aria and its convention center and theater. CityCenter is also applying for the certificate for the rest of the project, like the Veer Towers condos and the Mandarin Oriental hotel.

Some of the areas where LEED applies there are the use of recycled and sustainable materials and strong energy and water efficiency measures. For instance, CityCenter will churn out its own energy with a reduced-emissions natural gas co-generation plant. That and other energy-trimming features are supposed to save annually what 8,800 households normally consume. That's something to take note of.

Las Vegas valley - with thriving communities like Summerlin, Henderson, Sunrise Manor, Anthem and Whitney - has a few businesses with LEED credentials, but CityCenter is unique due to its size. Palazzo with over 3,000 rooms built by Las Vegas Sands in 2008 is another major resort in town that has achieved LEED, its version being silver. It's encouraging to see that major casino developers here are increasingly putting their arms around the green building concept.

They, Southern Nevada gaming operators, can readily identify with the benefits it brings.Cost savings is a given. No doubt about that. Green building idea is slowly gaining traction as the nation is seeking to wean itself off fossil fuels. Consumers will begin appreciating resorts in Las Vegas, and elsewhere, that are energy efficiency conscious and predictably prefer to patronize them. In essence, it's a novel marketing tool as well. Getting LEED then is a win win model on many fronts.

The mortgage industry could use some good news for a change and it's getting a little bit of it from Fannie Mae, the GSE, or government-sponsored enterprise, which buys mortgage-backed securities on the secondary market. Its actions bring crucial liquidity to the vast home loan sector. Life hasn't been easy for it lately, as it struggles with a record number of foreclosures and even outright corrosion of its once untouchable mandate.

Fannie Mae is moving forward with new ideas, though, despite its troubles and criticism. The latest it came up with is to speed considerably the warehouse lending routine. A warehouse lender provides financing to mortgage originators against the collateral of closed home loans before the loans are sold on the secondary market. It is a key player in the somewhat complex system. "We're providing faster funding to lenders so that they get cash immediately after closing to continue funding loans," promised Fannie Mae CEO in a recent speech. That's wonderful.

As mortgage financing has become quite inflexible lately, on account of tons of bank balance sheet problems, foreclosures and nosediving real estate values, this change gives it a little breathing room. It used to be that it could take a month or more before the home loan lender would receive its money after closing. That's a long time, probably due mostly to antiquated system processes. Under this new setup it will do so immediately, which in turn allows new mortgages to be originated much quicker. That's the whole idea.

Fannie Mae has to be commended for continuing to seek solutions to help lift up the battered mortgage and real estate markets. This recent process adoption isn't earth-shaking by any means, but it does improve the nowadays rigid mortgage regimen.

Las Vegas valley - with communities of Green Valley, Summerlin, Henderson, North Las Vegas and Sunrise Manor - real estate market eased up some as the summer progressed, actually to no surprise. July was already somewhat weaker than the several previous months that had been increasingly strong. Mortgage rates remain very favorable, as do home prices, but even these factors weren't enough to prevent a slight downward movement.

Greater Las Vegas Association of Realtors, or GLVAR, relates this time that 3,229 single-family houses were closed in August, a 14% drop from July. That's one thing, the other is that in August of 2008 the sales number was only 2,545, so in that comparison the action this year is still very good.

Single-family house inventory in Las Vegas rose marginally for the second month in a row, climbing to 20,999, kind of expected since sales took a step back. It's about 2% higher than in July. The magic threshold of 20,000 just seems to be pretty tough to crack.

The median price in Southern Nevada decreased to $135,500, 2.4% lower than in July. That will make many real estate market observers and homeowners shake their heads. Steady price declines of the past appeared to be stalling in recent months, but now there is another rather sizable push down. 2.4% annualized turns into 28.8% which is unhealthy indeed.

REOs, or real estate owned, still rule the market here, making up over 70% of the volume. It's likely to stay quite high for the time being as more foreclosures are predictably on the way. It seems the market is getting close to finding the bottom, but can't just decide exactly where it is and then settle there.