I found this article on CNN.com this morning and thought I would share with all of you. I found it interesting so I thought I would share with all of you.
http://www.cnn.com/2009/LIVING/wayoflife/03/17/yeager.qanda/index.html
At least one analyst is being positive.
Marta Borsanyi, a principal of a Concord Group, believes that a full recovery of the housing market for Las Vegas could come as quickly as 2011. Concord Group is a Newport Beach, Calif-based real estate company. This comes with news as the final January home sales numbers show a significant increase from last year.
One of the greatest signs of recovery are the thousands of new hotel rooms being opened on the strip. In more conventional years, this has equaled new jobs, which conversely equals more home sales.
Borsanyi points to the unique market of Las Vegas whose housing demand has a larger concentration of non-resident buyers than any other U.S. metropolitan area.
Home prices have continued to decline as 75% of the market is now being composed of foreclosed homes. Last month, Las Vegas was cited as the emptiest city in America and on average, 1 in 78 homes a month is foreclosed upon.
A client of mine sent the following article and asked me if this was the end of Vegas.
Read it here:
http://realestate.yahoo.com/promo/americas-emptiest-cities.html
After reading the article I found myself feeling….well,…about the same as before. This article really tells us what we already know. The housing market in Vegas sky rocketed and then the bubble burst. But what people may not be aware of is that Vegas still has roughly a net gain of 2,000 - 3,000 net gain a month in population. Those people have to live somewhere. Also, let me share this little bit with you.
Ask anyone how many homes are on the market and you’ll get a wide variety of answers. One lady I spoke with recently said there were 50,000 homes for sale. That’s a little high to say the least. Here are the current stats:
Single Family Homes for Sale: 22,679
Condominiums: 4,079
Even that number can be deceiving. For instance, let’s take the Single Family Homes (SFH) for instance. Sure, there are currently 22,679 on the market. But out of those, 6292 have had an offer accepted and are just waiting to close. That leaves us with 16388. But, take away all the short sales (of which, on 20% will go to contract and only 10% will be sold) and you are left with a true market of 10,858. When you think of the fact that there are really only 11K ish homes available all over Las Vegas, that certainly doesn’t seem like too many, especially when you consider that at any given moment we have 6,000ish homes under contract. So, one can expect that over half of that inventory will be unavailable in the next 30-45 days. And this is FEBRUARY! Think of what it will be like when summer comes and everybody who is going to move wants to do so between school years. This could be one HOT summer!
Is Vegas over? Maybe, but maybe not in the way you might think!
What does the stimulous package mean for Nevada residents?
On Monday, assembly speaker Barbara Buckley announced that Nevada is in line to recieve upwards of $480 million from the stimulus package passed by congress last week. Questions of where it would go were answered with a vague response of education and transportation.
She estimated almost half of it would go towards immediate transportation needs which would provide some much needed jobs to help stimulate the economy. Nevada’s unemployment rate has hovered around 9.1% since the fall with the 2008 average set to be announced on Feb. 27th by the US Department of Labor.
On this upcoming Wednesday, Senate majority speaker is set to address the Nevada legislation and is expected to elaborate on the funds and its use. Buckley hoped the funds would be available for the start of the next fiscal year which begins on July 1st.
I’ve heard a lot of confusion lately as to the correct allowable seller concessions. Here are the current allotments:
1. When it is an FHA loan, sellers can give up to 6% of the sales price towards buyer’s closing costs.
2. When it is a VA loan, sellers can give up to 4% of the sales price towards buyer’s closing costs (can be more if you word it a certain way…if this is the case, call me and I’ll walk you through the write up).
3. When it is a conventional loan on a primary residence or 2nd home the seller can give up to 3% of the sales price towards buyer’s closing costs if the buyer is putting 10% or less down.
4. When it is a conventional loan on a primary residence or 2nd home the seller can give up to 6% of the sales price towards buyer’s closing costs if the buyer is putting 10-25% down
5. When it is a conventional loan on a primary residence or 2nd home the seller can give up to 9% of the sales price towards buyer’s closing costs if the buyer is putting more than 25% down
6. If you have an investor purchasing a home the max seller contributions is 2% of the sales price.
Most buyers I work with tend to be quick to ask for seller contributions. Understandably so. If they can keep more cash in their pocket, it might be worth the time. However, the fail to understand the basic math the comes along with asking for closing cost assistance. If you offer $200K on a property and it is an FHA loan and request the maximum of 6% from the seller, you are really only offering $182K on the property as you are asking for $18K back.
Now, some people may say, “But I offered what they were asking for.” But the truth is, you didn’t. If they were asking $200K and you a put in the above example offer, you weakened your position by asking for closing costs.
Bottom line, if you have the cash, it is better to not weaken and complicate the offer by asking for closing costs. That way you will only pay the actual closing costs instead of overpaying and financing what you didn’t use.
If you don’t have the cash and need the seller to contribute, make sure you work with a lender who will provide a good faith estimate prior to writing your offer. Then you can best estimate exactly how much to ask for and won’t be overcharging yourself.
At least, you could.
An Arizona man and his family have decided that enough is enough. They aren’t going to sell their home in the traditional way of putting it on the market and watching home values decline as the months pass.
No, Joseph and Loriann Gaunt have decided to let fate decide who gets their home. They came up with the idea after putting their home on the market last year and garnering little interest. So, they decided to sell raffle tickets at $100 per and let the winner take all, furniture and dvd players included.
In Arizona, raffling real estate requires you to partner with a non-profit. They are currently looking for one to partner with them.
They purchased the home in 2005 for a little over $322,000. So, they would need to sell roughly 3,300 tickets to break even. They are hoping to sell over 4,000 with the rest of the profits going to the non-profit that partners with them.
This is quite an original idea, though I don’t see it gaining a lot of momentum as a viable alternative for selling your home. But, it may work out for the Gaunt family. Only time, and ticket sales, will tell.
The US Department of Housing and Urban Development (commonly referred to as ‘HUD’) oversees the rules and regulations for the housing industry. About 30 years ago, they created an act called the federal Real Estate Settlement Procedures Act. Last month, the government added some new, and quite substantial addendums that greatly affect the new housing market.
In August, I helped a wonderful couple purchase a new home from a well known national home builder. They purchased a large home on a large lot for about $275,000 dollars. Through a down payment assistance program, the homebuilder contributed funds for the 3% required (soon to be 3.5%) FHA downpayment. The homebuilder as contributed up to 3% towards the buyer’s closing costs, thus maximizing the seller’s contribution. The catch was, my buyers had to apply for a loan through a preferred lender. At title, we found out why. This national builder owns and operates this lender. If we had chosen not to go with the builder’s preferred lender (which we were free to do), we would not have received one penny of contribution from the builder. In essence, they were creating another avenue for revenue.
HUD has decided that a builder can no longer tie their incentives to ANY lender, title company, or any other affiliated business. Senior officials inside HUD have ‘unofficially’ confirmed that they did this on purpose to promote comparison shopping by buyers and eliminate the monopolies created by these affiliations.
Some incentives have survived these addendums by HUD:
1)Builders can still offer incentives to buyers as an inducement to buy homes.
2)They can still provided incentives for buyers to use non-affiliated mortgage companies and other settlement service providers other than title companies and title agencies.
3)Offer incentives to use affiliated mortgage companies and title agencies on non-RESPA transactions. These include sales to investors and cash purchasers.
These new addendums go into effect January 16, 2009. Homebuilders have until January 15th to offer incentives tied to affiliated businesses even if the close of escrow date falls after January 16th. I would expect to see homebuilders who are currently using these incentives to generate business for their own lenders and title companies to heavily advertise up until mid-January to try and get as much business as possible before time runs out.
Amid the excessive foreclosures in the Las Vegas Valley it is no secret that North Las Vegas has seen the greatest concentration of foreclosures. Mounting defaults continue to be filed in this area causing some neighborhoods to become blighted and vacancy numbers to increase. Recently the city of North Las Vegas and Clark County came together and proposed a plan to utilize $30 million in federal funds to aid. The proposal has been suggested as follows:
1.Nearly $6.9 million for home buyers assistance. To qualify buyers must make below the national average annual income with variances for the number of people in the household.
2. Under $9.3 million to assist non-profit organizations in purchasing, renovation and selling homes.
3.Close to $8 million to Clark County Housing Authority to purchase , renovate and rent out vacant properties to needy families.
4.$3 million to rebuild Buena Vista Springs apartment complex in North Las Vegas.
5.Over $74,000 to demolish blighted structures.
6.Under $450,000 to advise prospective homeowners on purchasing a home.
7.Over $400,000 to rebuild demolished dwellings.
In my opinion this is a positive approach from local government agencies. However, it is an assisting solution, maybe more of a band aid. I am not sure if this is true, but I suggest this is meant to assist more of the lower income community. While that is a good thing, the foreclosures in that area of town are not limited to lower income households. The problem infiltrated to all economic levels. This will merely assist some individuals to purchase, remove some blight in specific areas and create affordable rental properties. This is not an overall solution to the foreclosure problem in North Las Vegas. It will be interesting to see how it all transpires.
Last spring, as a result of the Economic Stimulus Package, the Federal Housing administration along with Fannie Mae and Freddie Mac raised their loan limits across the country. The limits were in keeping with the socio-economic reality of the area (i.e. the limits were higher in Orange County, CA and lower in Little Rock, AK). For Las Vegas, that meant a cap of $400,000 for an FHA loan and $417,000 for a Fannie/Freddie loan. This package had an expiration date of December 31st, 2008.
The new limits were announced this month and will go into effect January 1st, 2009. They are as follows:
-Clark County FHA - $287,500
-Clark County Fannie/Freddie - $417,000
What this means is that if you have less than 10% to put down on a home purchase but would like to buy something between $296K and $412K, you need to be locked in by 12/13/08 and close by 12/31/08.
There are no exceptions or extensions. As a part of this, the FHA also raised the down payment amount from 3% to 3.5%.
So, the election is finally over. All the campaigning, commercials, fliers, robocalls are finally at peace. This will certainly bring about change (no pun intended) to many facets of our national policy both foreign and domestic. Specifically, what change will happen in the real estate facet?
Obama has promised several things and of course, only time will tell if he will be able to accomplish any of what he intends to do. But will it matter? Will homeowners currently in default keep their homes? Will taxes go so high it won’t be worth it to sell your home?
Let’s look at what exactly Obama has promised and how it will effect you:
1) Obama promises to create a universal mortgage credit to homeowners who do not itemize. Essentially, this will give homeowners an extra $500 to deduct.
2)Obama promises to crack down on mortage fraud. From Obama’s website: “Obama’s STOP FRAUD Act provides the first federal definition of mortgage fraud, increases funding for federal and state law enforcement programs, creates new criminal penalties for mortgage professionals found guilty of fraud, and requires industry insiders to report suspicious activity. ” (barackobama.com)
3)Obama promises to make it easier to understand a mortgage BEFORE you sign on the bottom line.
4)Obama promises to eliminate the provision the prevents a court of law from altering a homeowners mortgage payment. Essentially, if you were a victim of mortage fraud and file bankruptcy, you may be able to keep your house.
5)Obama has also promised to continue to work to provide relief for homeowners stuggling to make payments currently. No clear outline for this has been given.
So will it help? Did you vote for the right candidate? Unfortunately, only time will tell.