There are still a lot of foreclosed homes on the market in Las Vegas, but they are difficult to buy unless you can offer cash and still afford the improvements
Irvine, CA (Vocus) October 22, 2009
The Hoffman Company, one of California's oldest land brokerage firms, has launched an office in Las Vegas, Nevada, to help banks with delinquent or foreclosed properties get that land off their books by selling it to developers or investors.
The firm now has four brokers licensed in Nevada and recently closed its first land deal in the state - the purchase by a private investor of more than a dozen brand new homes that had been foreclosed on by Hoffman clients J.P. Morgan and Bank of America.
"There has been a tremendous shift in Nevada's land market over the past few months, and it has changed the way every land broker looks at the opportunities that state," said Cameron Fowler, one of the Hoffman brokers who worked on that deal.
"It has always been more difficult to acquire property in Nevada because most of it was owned by the government and a handful of master planned communities," Fowler said. "But recent foreclosures have returned those distressed assets to the lenders. Now there is a whole host of new land owners who are eager to sell that property."
Indeed, The Hoffman Company's decision to open an office in Nevada after 30 years in business was prompted by its existing bank clients. They liked how the Hoffman brokers handled their California property and wanted the firm to list their REO assets in neighboring states as well.
Land is changing hands in Las Vegas at a faster pace than anytime in the past three years and prices are inching upward, which The Hoffman Company believes is a strong signal that the city's housing market has hit bottom and is starting to recover.
Almost all sellers in the market now are institutional lenders or community banks with REO property, the firm's brokers say. Private investors tend to purchase raw land or foreclosed homes, they say, while public builders are competing against each for the city's inventory of finished lots in existing master planned communities.
"There is a big misconception out there that the land market in Las Vegas is dead and all the homebuilders have gone away," said Aman Lal, another Hoffman broker active in Nevada. "In fact, what's happening now is just the opposite. The supply of finished lots is diminishing rapidly and builders are clamoring to snap up what's left so they won't be forced to buy raw land."
Finished lots are shovel ready for home construction; streets, utilities, grading and other infrastructure improvements are complete. Raw or unentitled land can take years to get to the actual homebuilding stage, and public builders need to show profit quickly to satisfy investors.
"There are still a lot of foreclosed homes on the market in Las Vegas, but they are difficult to buy unless you can offer cash and still afford the improvements," Lal said. "So most of the buyers are private investors who want to rent or flip the homes for profit. That's why there is demand out there for new homes by people who need a loan to buy a house. Developers know that and they're getting ready to start building here again."
Hoffman's current Nevada land listings include: Interwest Capital is selling 261 improved lots (22 finished lots in Henderson, 222 lots in Las Vegas and 17 finished lots in Las Vegas); Astoria Homes is selling 81 finished lots in Lone Mountain and Keybank is selling 24 acres of raw land in Las Vegas.
About The Hoffman Company:
The Hoffman Company has been a leading land brokerage firm in Southern California for the past 30 years. Its brokers have closed more than 1,100 real estate transactions for a total $4 billion since the company's inception in 1978 and have booked an average of more than $500 million annually over the past five years. The Hoffman Company represents land owners of all property types, including residential, multi-family, commercial and industrial sites. For more information, call 949-553-2020 or visit http://www.hoffmanland.com.
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