The luxury condo tower currently under construction in front of the Venetian and Palazzo resorts was planned some years ago when the real estate market in Las Vegas was moving along very nicely. The market conditions, however, have changed quite a bit since then. The high-rise condo segment in Southern Nevada is overbuilt, demand is waning and prices predictably are softening up. The current mortgage industry woes make getting financing for purchases much harder, too.

Las Vegas Sands, developer of the condos, likely realized that going alone with the project in this less than desirable market environment was going to be tough. To bring in a world-class hotel, resort and condominium operator like Starwood Hotels & Resorts Worldwide would make it much easier, so it contracted St. Regis, a Starwood brand, to operate the tower once it's built. A separate marketing firm will be signed up to handle the sales center.

The project will carry the name The St. Regis Residences at the Venetian Palazzo, Las Vegas. It'll have 398 residences priced, at this juncture anyway, from $1,500 to $2,000 per square foot, placing them among the most expensive units in town. The St. Regis name readily brings to mind luxury and impeccable service among the wealthy across the globe and ought to be of great help in marketing the property, even in this climate. Those who are used to certain high standards trust tested brands like St. Regis.

The Venetian also houses a massive convention, meeting and event facility that is very successful and forms the backbone of its operation here. The St. Regis Residences should definitely appeal to the cultivated corporate buyer for its own officer use or as a base for an important client attending a convention. Moreover, since the condo tower sits right on the Strip many of the units offer priceless up and down views of the action below. That ought to be a big draw.

As things stand right now, the successful marketing of the residences could be accomplished without any price adjustments. By the time the project is scheduled to open in 2010, the market could be much improved.

A few years ago when the real estate boom was happily chugging along home prices in town were breaking records month after month. The predictable result was that many home buyers were beginning to be priced out. Smaller, established communities like Mesquite and Pahrump where land cost a lot less could offer affordable housing and they began growing steadily.

Besides them, developers were also drawing plans for new master-planned communities in the outlying areas, like Coyote Springs straight north from Las Vegas and White Hills in northern Arizona. Again, the key attraction with them was that housing out there would be reasonable. The city was still growing at a healthy clip, so it was entirely viable that any new development out in the distant valleys would draw an enthusiastic response.

But then the real estate market tanked and with it the mortgage segment. Demand especially for new homes in Southern Nevada has slowed dramatically and that has put many out-of-town projects on hold. Resale prices in the valley have adjusted downward remarkably, making homes here more affordable again. Specifically the lower end of the scale is now well within reach even for the first-time buyer. Because new homes in the city are now moving sluggishly, demand out in the outlying areas would be even weaker.

That must make developers with huge land holdings in the suburbs wonder when the time is ripe to proceed with building. Their original low price structure was based on Las Vegas housing being largely unaffordable, but now that the situation has amazingly turned around, that scenario no longer applies. They may have a long wait ahead of them before the real estate market here again supports their plans. People probably don't want to drive 50 miles one way with today's gas prices if they can buy a home in Vegas proper for the same money than out there in the wide open country.

For the short term at least, it seems that demand for resale homes in Las Vegas keeps increasing as prices remain weak and eventually that will start pushing values back up. There are only so many homes available within the city, so that is bound to happen as multiple offers keep pouring in. Once they go high enough sometime in the future, building in the distant hills becomes feasible again.

The real estate market is pretty tough right now in countless areas of the country. There are many reasons to it, one of which is the mortgage industry. Due to severe losses recently lenders have tightened their underwriting standards and flat out cut off many home loan programs that got them in trouble to begin with. They are also increasingly dealing with another concern and that is mortgage fraud.  

Mortgage Asset Research Institute is the main shop around gathering data on mortgage fraud and then putting together periodic reports on it. Its second quarter release shows that there was a serious 42% hike in cases from the same quarter in 2007. Even though the volume of home loan closings nowadays is way down, the scam numbers are up quite a bit.

Real estate values are very attractive right now and many people would like to buy property on the cheap. Who wouldn't? There is money to be made so long as the buyer gets his hands on a discount-priced house or condominium. But the tough credit market makes it double difficult. So to some the answer is to skirt the rules and get a mortgage at just about any cost.

The Internet has become a good source of information and advice on how to go about it. Numerous sites actually sell ready-made solutions. Phony income and employment verifications are easily available on several websites. A would-be home buyer presently showing nothing on his checking account can rent the necessary bank deposits to place on a mortgage application until the loan closes. A straw buyer uses his impeccable credentials to purchase a home and then transfers title to someone who couldn't qualify for a mortgage. The tricks of the trade are many.

In recent years the Internet has turned into the epicenter of real estate and mortgage information to the consumer, which is great, but as the recent rise in fraud figures indicates, in more ways than one.  

Lenders certainly are aware of the trend and will scrutinize applications more carefully than before, delaying approvals and closings. When the real estate market was doing so well a few moons ago it didn't really matter that much if there was some fraud involved because the solid price appreciation would smooth the way. Equity, after all, is an instrument that can solve a lot of problems. But today's game is totally different from yesterday's. Equity often is wiped out and then some. Now, for lenders, it can be a struggle between survival and ruin. 

Investors are returning to the residential real estate market and that is a sign of a turnaround in the making. It may not happen tomorrow, but it's coming. There are all sorts of investors who desire to take advantage of the slumping market. In Las Vegas, for instance, they are looking around for single-family houses, condominiums and townhomes to buy and are finding bargains up and down the valley. Some might purchase just one or two of them while others go for a block of attractively-priced property.

These investors certainly are helping in reducing the glut of homes currently available for sale not only in Las Vegas but also in many other areas of the country and their activity is working well towards restoring a viable supply-demand equilibrium to the market.

Another class of an investor is about to enter the picture, however. The more of them the struggling market attracts, the sooner it'll find its footing and recover. All groups of investors are warmly welcome.  

This other class of investors is normally made up of large financial entities and they play with big money. They are called listed hedge funds, private equity firms and closed-end distressed asset funds. They participate and provide financing in many different industries and are now turning their sights on the mortgage business. The present credit crunch has generated a bunch of mortgage-backed assets that often are valued way below par and that, of course, means opportunity. And they are smelling it now. Good.

Some of them have already raised billions of dollars and are waiting to put the money to work in the near future. They are now spending time to understand exactly what types of mortgage securities are out there and which ones make sense for their particular portfolios. One of the famous finance vehicles of the recent past is the CDO, or collateralized debt obligation, that uses chopped-up home loans as its backbone. These investors are now checking them out closely, as they can be quite complicated.

This development is undoubtedly good news for the real estate and mortgage industries. Even though these securities will be bought on the cheap, it'll still bring fresh capital to the coffers of mortgage lenders and consequently will allow consumers to secure home loans and then go out and buy homes. Once these investors decide to enter the scene in full force, it could well be more stimulus than what the government actions have done so far.

FHA has made a remarkable comeback in the last several months. Many of the creative home loan products that fueled the recent boom, especially those under the banners subprime and Alt-A, are rapidly being swept into the dustbin. FHA has stepped into the vacuum, offering low down payment options to borrowers who are itching to buy a property while prices are still as attractive as they are. FHA's market share in 2006 was about 2%, rather trivial number, and now it's around 23% and is expected to climb to 30% by the year's end, according to Inside Mortgage Finance.

But FHA is facing challenges, too, as it's seeking to restore its place in the huge mortgage market. The near future at least, and probably longer than that, is going to be dominated by an unhealthy amount of foreclosures. FHA, as an insurer that home loans will be paid, is projecting that it'll have to pay substantial sums of money to mortgage lenders and investors in the coming years as loans keep going bad.

To cope with that prospect, the agency just announced that it'll raise the upfront premium for most borrowers from 1.5% to 1.75%, starting October 1, 2008. It comes to $3,500 for a $200,000 mortgage and $5,250 for a $300,000 loan. That is a substantial sum of money for many buyers and refinance candidates. The current annual premium is scheduled to stay at 0.50% to 0.55% of the existing loan balance.

FHA is forced to do this to shore up its reserves so it can meet the upcoming payout demands. By doing it, though, it'll also risk pricing itself out of reach for many borrowers. Its role as the main player to help out struggling homeowners to find affordable financing could now be jeopardized. There is already talk in Washington that FHA may need to ask Congress for money in case current mortgage default pace persists for several more months. Either that, or push the premiums even higher and possibly watch its market share start dwindling again.

The agency has to walk a fine line now and keep a keen eye on the market. It's possible that its sudden rise to prominence could stall.

The green housing movement appears to be making further gains as the consumer is becoming increasingly aware of how valuable its contributions are to the reduction of energy consumption and greenhouse gas generation. Concordia Homes, a Southern Nevada developer for years, was recently recognized by Las Vegas Business Press as the Developer of the Year in the green building category.

Concordia has for a long time produced homes using Energy Star guidelines, but then it reached a point where it felt it needed to do better than that. Energy-savvy home buyers were looking for more and it wanted to respond, so when it launched the Sommerset Community in Henderson, Nevada, it was going to go another step or two beyond Energy Star. As a result the signature equipment at the 48-unit development turns out to be the roof-based solar system installed in every home as a standard feature. To read the entire article, please click on the link in the first paragraph.

Very little appears to have changed with appraisers over the last several months when it comes to the value they establish on a home that's up for sale or refinance. Many of them feel pressured by someone involved in the transaction to come up with the right price, or hit the number, usually meaning it should be inflated to satisfy their needs, says the Appraisal Institute. It could be a mortgage originator doing it, a real estate agent or even the nice lady whose flower beds are immaculate. Or another source. Anyone who could benefit from a higher valuation.

Inflated appraisals are one reason to the current housing and mortgage turmoil currently sweeping the land. As a result of that discovery, Washington recently established new regulations to combat bribes, interference and intimidation in the business, but obviously its impact so far has been less than desired. The pressure is still there, although, as some say, it has assumed a softer tone.

It's a tough environment to work in now anyway as home prices have dropped quite a bit in this city, like Las Vegas, and maybe a little less in that town, like Mesquite, Nevada. Whether values are stabilizing or not is hard to figure out in this volatile landscape. There can even be clear differences between adjoining neighborhoods within a city when recent comps are looked at. It's hard on the appraisers.

Everybody involved in a purchase would like the appraisal to arrive at the contract price and then there would be a relatively quick close. But today lenders are often challenging the figures they see and refuse to approve loans. They were burned badly when the famous bubble burst and are now extra cautious. So, frequently, hitting the number doesn't work. Sellers in these cases, of course, fume. Buyers, on the other hand, probably wouldn't mind grabbing homes at discounted pricing like this. And mortgage providers and real estate agents would succumb into rolling their eyes sensing promising deals about to fall through.   

The Las Vegas real estate market has turned into a rather disjointed spectacle. As the July stats show, compiled by local housing specialist SalesTraq, existing home sales continued on its recent accelerating pace by recording 3,173 closed transactions in July, which is a nice 56.5% jump from July of last year. What's important to keep in mind, however, is that around 60% of these sales were foreclosure-related. Banks have been pricing their REOs, real estate owned, with passion just to get rid of the non-performing inventory and that is one large reason why resales are doing so well now.

On the other hand, new home sales are heading in the opposite direction. In July there were only 731 units closed, reports SalesTraq. It's a bone-chilling 57.5% drop from the year before. Why such an inconsistency?

A lot is explained by how each category's price levels have shaped up in the last several months. Influenced heavily by bank-owned homes, the median sales price at the resale segment leveled at $210,000 in July, whereas the median price for new homes comes in at $262,185. It represents over a $50,000 advantage to the existing home category. This is not small change. The economy being as weak as it is, the buyer is more conscious about value than ever and will undoubtedly run for the existing property so long as he gets a nice house at a rock-bottom price. And he is getting it right now.

This trend is probably going to persist another few months until a point is reached where foreclosures start losing the current dominant share of closings.

The two mortgage heavyweights have been the backbone of U.S. housing finance scene for decades and have provided the intended liquidity to the market. This in turn allowed more people to buy a home to live in, the ultimate goal of the system. Then in the early 2000's the real estate market grew hot, piping-hot in select states like California, Florida, Nevada and Arizona, and as history suggests all out-of-control booms come to a crashing halt sooner or later. Like now. To fuel the boom, mortgage lenders, large and small, jumped head first on the housing bandwagon to make enormous amounts of money with fancy loan products. The activity during these years was fast and furious wherever one looked.

As things were unfolding. Fannie and Freddie were watching all of this from the sideline and eventually the desire to increase their profits overruled prudence and they joined in on the feast. To make a long story short, now they are grappling with heavy losses, just like most banks are, from these boom-time loans and are nearly insolvent.

Washington and think tanks and others in the know are presently debating what to do with these bleeding mortgage players. Obviously they need to be restructured in some way to keep this from happening again. A few experts call for their nationalization, some suggest they should be sold in pieces and some would reduce their role in the vast mortgage finance system.

Whatever is decided, it should happen after the markets have returned to some kind of normalcy. If something is done now, as some experts suggest, it would just add to the credit scene volatility, causing more harm and prolong the long-anticipated recovery.

Moreover, the GSE, or Government Sponsored Enterprise, setup did work for a long time. The current turmoil is then clearly the responsibility of Fannie's and Freddie's boom-time leadership who were more influenced by profit prospects than following the mandates each institution had. And where were the federal regulators tasked with overseeing them? There were a few warning voices heard in Washington early in the decade but they were quickly shouted down and the show, unfortunately, went on.

Now is a good time to buy residential real estate in the U.S. as prices are softening nicely in many regions and there is plenty of inventory to choose from. Mortgage money still remains affordable, although several loan products have been tossed and underwriting guidelines have become tougher. This development has been also noticed abroad and those aspiring to own property here have made a serious move to get something.

According to a NAR, or National Association of Realtors, study in which it surveyed 4,000 agents 26% of them had a minimum of one foreign customer and roughly a half of these prospects ended up purchasing something. The report covered the 12-month period ending in May of 2008. The foreigner usually buys a vacation home or an investment property, as anyone would expect.

The top states by popularity are Florida, California and as a small surprise Texas. Right behind them come Nevada, probably heavily favoring Las Vegas and all the entertainment it has to offer, Arizona, Washington and New York. All in all, about 150,000 to 190,000 homes were closed by international buyers during that time frame, estimates NAR. That certainly offers some relief to our current stagnant marketplace.

But there is one statistic that is noteworthy. The same survey from the year before reports that 32% of agents had a foreign client, meaning the trend is now losing steam. The half of foreigners who did not buy anything were mostly bothered by the prices. Or more likely the volatility of them. It's a good bet that it wasn't because they were too high but rather that they may go even lower in the coming months, so their attitude might be to wait and see. Whether they drop further than this, like in Las Vegas, is anyone's guess. Regardless, there is now good housing value in the states mentioned above and other states, too. It truly is as an attractive buyer's market as any in recent memory, also because the US dollar continues to be relatively weak.