The Great Las Vegas Real Estate ScamTopic: Real Estate news
My family decided to take a trip from Reno to Las Vegas to see how the real estate market was behaving in the city most hit by the real estate bubble.
We own and don't have to worry about getting a mortgage if we decide to move to Las Vegas for the health of one family member. But we pretty much came to the conclusion that the real estate market is a total scam in Las Vegas.
One agent proceeded to tell us that the banks have given up on Las Vegas and have allowed the market to crash to the bottom. That of course is a ridiculous statement to make. The banks never give up anything when it comes to greed, which is why our nation is struggling.
The problem is, bank owned properties have declined from 18,000 on the Las Vegas market to about 1,600 if I am to believe the agent's figures. What this means is that the banks are holding onto a huge inventory of unsold homes as well as contributing to the slowdown because of robosigning. There are empty homes everywhere. So, what is the scam?
Well, the scam is that the banks put the properties they do want to sell on the market for 30 days. If there are no buyers, which is often, there is a bidding war after the 30 days among investors. I would say that the investors come in with low ball offers and often get the properties for a steal, for a "wholesale" price.
While main street is shut out of this market, or perhaps is not interested, the crony investors of the banks get the deals, and you wonder where those investors are getting the cash to make the offers. I am guessing that some get loans, big loans from the banks, as a line of credit. I am pretty sure that these investors are better risks for the banks than main street.
But in playing this game, the banks are pretty well destroying the ability of main street to get ahead. The banks are more willing to manipulate the market with very little participation from main street. Main street should not trust these banks, because real supply and demand would be crushing these house prices.
The banks are scamming main street, even willing to take less than the value posted, from an investor. It is like the real estate market is a closed market, among investors and banks, sort of like futures markets are closed markets between banks and speculators.
Nothing is real anymore, in any market. It is a massive scam, and in real estate, the perfect market for this scam to take place is Las Vegas. Usually, houses go to the investors for less than the asking price, and the cronies and bankers are happy with this arrangement.
Some fellows have warned that the US is like the Roman Empire. You have to wonder when you look at the military budget, the huge expenditures, and the little help that affords a growing underclass.
One thing I did notice was that there were a large number of folks living multigenerationally, This undermines the plan of the banks to get main street into expensive loans. This terrifies the banking sector. But we really can't feel bad for a sector that is more interested in a quick buck than it is about making America strong.
But in order for the scam to continue to work, you have to have renters and folks that buy gasoline. As long as people buy food and gasoline, the speculation in the futures continues unabated. As long as people rent, there will be investors willing to buy up all the available American dream with the help of the scoundrel banks.
While I am personally for cram downs for homeowners who bought in the ponzi cycle, I am against this idea to let private capital buy real estate in bulk. That program just admits to the fact that the investors are getting the wholesale deals even now. Others don't get wholesale, even if they have cash.
The banks have not given up their desire to keep prices artificially high, for the retail customer in Las Vegas. That is the scam.
The only way to beat the banks is for fewer people to rent these properties that are going to be scarfed up by the bankers' friends.
Las Vegas is an exciting city, but that is on the strip and in the casinos dotting the city throughout. In the real estate market, there is a lot of suffering by those who bought in the bubble, and there is continuing suffering by those who want to buy but who cannot get the same deal as the privileged class.
What is going on in the Las Vegas real estate market is both disgusting and wrongheaded. To the extent that it is happening elsewhere is proof that the banks are hurting this nation, are unpatriotic and are deserving of being wound down, one at a time, unless they do something to help.
If they cannot afford to help by offering great deals to all citizens, they need to be dismantled as they are pretty useless to main street.
And one more thing. The United States should help qualified buyers with a down payment. That is the sticking point with mortgages, the inability of many to save for a substantial down payment. This should not be a down payment that is 3 percent, or even 10 percent, because mortgages fail with that little down.
The government should attempt to help with a 20 percent down payment in a fixed and stable mortgage if there is any hope of the housing market healing in the bubble areas.
If our government is too poor to do this, then expect an underclass of folks who are being gouged by rent not reflected in the decline of housing values, and who will be a drag on the US economy for as far as the eye can see.
I don't claim to have all the answers to a very difficult problem. But I know that with the decline in wages that is ongoing in a globalized society, down payment assistance is very necessary for the well being of our economy. The decline of America can be stopped, but only by a real effort to get families into homes.
Germany should help Greece, and the US government should help homeowners. Failure of either or both will show the way to a very unstable future.
I would suggest that multi generational families be helped with a down payment assistance. It is the only way to encourage a conservation of resources, and stability of multiple incomes in one household. Families cannot be treated as being "retail" any longer. The idea of retail and wholesale home buyers is such a joke that it should be made illegal.
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