Market distortion explains why buying homes is needlessly hard

Market distortion is not just textbook theory. In Las Vegas, the distorted housing market punishes everyone - sellers, buyers, Realtors and lenders. By extension, it punishes an entire community striving for recovery while a big piece of the economic machinery remains mired in the mud.

Let's skip the charts and graphs. Here's a living illustration of market distortion, courtesy of a Las Vegas lab rat who's run through the housing market maze over and over without getting to the cheese.

Market Distortion No. 1: A lot of real estate agents don't return phone calls. I thought at first that Las Vegas Realtors are just an inept or lazy bunch, but it has become clear that they're mostly good folks working harder than they should have to, and it affects their customer service. The agents are shuffling paper that won't produce a sale. They're fielding calls to answer moot questions about properties that show up in listings but really aren't available.

They're also busy handling Market Distortion No. 2: They're writing three, four and five simultaneous offers for a single buyer who's working the system, throwing out offers on anything that meets minimum criteria, and hoping one of those offers will stick. With more buyers than houses in the market, you hedge your bet, and you hedge again because the market is where your offer goes to die.

Maybe this explains Market Distortion No. 3: unreliable listings. A good-looking place appears. Very quickly, it's marked as a contingent sale, a signal to cross it off the list. A week or two later, the property is available again. Did a bet-hedging buyer withdraw from that transaction because his preferred offer was accepted? Who knows, but trying to keep track will make you crazy. You feel perpetually robbed of good opportunities.

Nearly everything is a short sale (see Market Distortion No. 7), and when the seller accepts an offer, it goes to the lending institution, where, legend has it, the offer sits for months as a coaster under someone's coffee mug.

What actually happens to it? This is Market Distortion No. 4. I envision it as a Monday morning meeting where stacks of manila folders sit on a conference table. There are five lending officers in a two-hour meeting. Each of them has 200 deals to approve. They get halfway through the stacks. The following Monday, each officer has received another 200 offers. Each stack is now 300 offers tall, because each has 100 left from the previous week. And so it goes. The unapproved offers pile higher as the weeks go on.

The lenders are the ones gumming up the works, but only a child or an idiot would believe that they want it this way.

They're embroiled in Market Distortion No. 5, the one I dare not wade into. That discussion would necessarily include the big bubble, the big crash, the Federal Deposit Insurance Corp., the Dodd-Frank Act, robo-signing and a bunch of Nevada statutes. It would also require those yawn-inducing charts and graphs.

But I do know the result as Market Distortion No. 6: Widespread resignation and shoulder-shrugging. The entire cast of characters - the buyers, the sellers, the Realtors and the bankers - even with all of their interests aligned, are not strong enough to change the forces controlling the real estate business from the outside.

Political forces built this unconquerable beast to conquer the beast the market created. Now they're just making everyone tired, cranky and corrupt. "That's just the way it is," one Realtor told us with a sigh.

Market Distortion No. 7 is the ratio of good, old-fashioned, owner-equity sales to short sales and foreclosures. Particularly at our price level, the number of listings where the homeowner controls the sale is a tiny portion of all the listings.

So here's a buyer in a normal market with dollars in his wallet, and a seller with a product. They haggle a bit, and they shake hands. The deal is done. Everyone's happy.

But when the seller doesn't own the product outright, he has to hash things out with the guy who loaned him the money to buy the product. This used to be the seller's problem and the lender's problem. Now it's the buyer's problem, too. And the Realtor's problem, as well. Nobody is happy.

Early on in the housing collapse, some smart people said that enforced forgiveness of loan deficiencies would create a moral hazard (Market Distortion No. 8). When your neighbor is allowed to walk away from his loan because he fell behind on the payments, and the loan balance is more than the home is worth, why should you pay on your home when it's worth less than what you owe? Short sales will become rule instead of the exception, the smart people predicted.

And by the way, what is the total value of the time and productivity wasted in this mess (Market Distortion No. 9)? What other, ancillary markets are being affected (Market Distortion No. 10)? These are the master's thesis questions. I leave these inquiries to the economists.

All I want is one little house, with a garage, and maybe a tree shading the patio.

Samantha Stone is a disheartened would-be home buyer who works as a reporter for CBS Radio Las Vegas (100.5 FM), and as executive producer of "The Cyberjungle," a podcast covering digital crime and forensics.