week in review

We hope to be releasing HARP’s newest refinance feature (abolishing Loan to value requirements on Fannie Mae loans taken out prior to May 31^st 2009) in the next 2 weeks. 

Financial Markets

The Dow Jones ended Friday up nearly 200 points and landed at 12,212.  This is a massive swing from two weeks ago, where the Dow nose-dived by about 1,000 points.  The latest surge resulted from news abroad and domestically.  The Eurozone announced that it was getting close to approving a plan that would solve the debt crisis. 

While here in the US, the Consumer Sentiment Report climbed to a 67.7 reading, marking the fourth consecutive month of increases.  What does this report represent and what does it signify?  To put simply, the better mood the average consumer is in about the economy, the more he/she spends.  The more the consumer spends, the more the economy grows…The more the economy grows the more companies hire, and ultimately drive down the unemployment rate. 

Southern Nevada Real Estate and Economy

Below is a link to an article in the Wall Street Journal that lists Las Vegas the #1 market to invest in real estate.  The formula not only calculates short term rate of return (the cash flow vs. expenses when renting it out) but also long term, in the form of appreciation.  This is a great reference, or tool to use for both investors and those looking to purchase a primary residence in my opinion. 

http://www.marketwatch.com/story/best-cities-to-invest-in-rental-homes-2011-07-11?link=MW_story_insert

week in review

Financial Markets

The Dow Jones rallied Friday and ended the day up 259 pts.  The Dow was up 1.4% for the week and up 5% for the 2011 year.  The stock market’s struggle to reach consistent gains probably has a role in the Southern Nevada real estate market and could partially explain the abundance of cash buyers in our market.  As an example, $100,000 investment in stocks, assuming we work off the Dow Jones performance as an average, would net a return of $5,000 for the year…Take that same $100,000 initial investment used to purchase a home in Las Vegas for cash, rent it out for $1,000 per month, deduct $250 per month for taxes, insurance and maintenance, and the investor earns roughly $9,000 per year, or 9%.....I won’t even bring up the “A” word.  (Appreciation) but certainly has an added benefit to the investment.

Southern Nevada Real Estate and Economy

Below is an interesting article in the RJ that breaks down the foreclosure numbers in Southern Nevada.  The statistic that stands out to me the most is that roughly 100,000 homes have been foreclosed on since 2007, which is 18% of the existing homes, or nearly 1 out of every 5 homes.  Experts say we are about ½-way through the foreclosure crisis, so in the end, it could be said that 1 out of every 2 homes would have been foreclosed on from 2007 to 2015.  I can’t imagine we would see anything like this in our lifetimes. 

http://www.lvrj.com/business/new-analysis-shows-foreclosures-still-plague-parts-of-valley-133764798.html

On a much lighter note, according the blog below, the Clark County Commission approved a 26 acre water park located a few miles south of the strip and is expected to open Memorial Day 2012!?...This has nothing to do with Southern Nevada real estate that I can think of other than added tourism and something fun to do with our kids during the hot summer months…I take that back, it could lead to an uptick in tourism, providing for an uptick in profitability for the casinos, prompting them to increase hiring thereby lowering unemployment rates which would lead to an increase in real estate sales.

http://lasvegasblog.harrahs.com/las-vegas/las-vegas-to-get-new-waterpark-in-2012/

week in review

Primary Residential Mortgage now allows buyers who paid cash for their home to pull cash out without a waiting period.  This can be a useful tool for you if your clients are interested in leveraging against homes they recently purchased, to purchase more.  As a reminder, we also allow up to 10 financed properties. 

Financial Markets

The Dow Jones lost roughly 250 points for the week, primarily due to fears of the stability of Greece within the European Union.  Greece faces a vote that could eliminate the nation from membership of the EU, which could lead to higher concerns that the country would default on its debt.  On the domestic economic front, the October employment report was released, showing 80,000 jobs created in October, slightly less than the 95,000 jobs expected by analysts.  Both the stock market and bond market are expected to be very choppy this coming week and we can expect mortgage rates to be active in its movements.    

Southern Nevada Real Estate and Economy

Below is an article in the RJ about Bill 284, which essentially requires banks to provide documentation demonstrating that they have the legal right to exercise the power of sale.  The affect from the bill passing has been astounding.  The article goes on to say that in the first 3 weeks of October, there had only been 116 notices filed as opposed to the over 3600 filings in September of 2011.  It is probably too early to speculate what the long-term effects of the bill will be, but simple economics would have to suggest that there could be fewer transactions per month as a result of the lack of inventory.  On a positive note, with less inventory available, and a growing pool of buyers ready to buy, it would pushes prices up. 

http://www.lvrj.com/business/new-state-law-slows-banks-from-starting-foreclosures-133222718.html

week in review

I wanted to share with you what is about to roll out that could truly assist our past clients, in the event they call you with questions about President Obama’s revision to the HARP refinance program that will be released December 1st.  Current home owners can now refinance provided they meet the following criteria.  Highlighted in yellow is the significant change to the program:

·         Current mortgage must be owned by Freddie Mac or Fannie Mae

·         The mortgage must have been closed prior to May 31^st, 2009

·         Must be current and meet traditional conventional loan credit standards

·         Loan to Value is no longer calculated.  (Previously LTV could not exceed 105%.  Technically the LTV could have gone to 125% but very few lenders participated at these LTVs)

This is a huge win for Nevada.  There are really only a few markets where housing depreciated by more than 125%, so the majority of the home owners across the country were able to take advantage of the program when it first rolled out nearly 2 years ago, while many home owners in Nevada were “left out in the cold”.  Please feel free to share this email with your past clients.  Every home that doesn’t go into foreclosure is another home that won’t be listed on the MLS for sale, and our housing market recovers sooner.  Savings of $100-$200 per month per household will also be a boost to our local economy, as it will provide more discretionary spending. 

Financial Markets

The Dow Jones quietly had its best month ever, increasing over 1,000 points, over 12%.  The Dow ended Friday at 12,231.  The bond market, in typical fashion, moved in the opposite direction, and mortgage rates have gone back up to the levels they were from about 1 month ago. 

Southern Nevada Real Estate and Economy

September Sales data is more of the same.  405 new home sales recorded with an average sales price just over $206,000.  4,281 resale homes were recorded for the month with a median price of $108,100.  50% of the homes were foreclosures, roughly 25% were short sales and slightly over 50% of the homes were purchased with cash. 

http://www.lvrj.com/business/las-vegas-home-sale-prices-rose-in-september-132162568.html

week in review

Financial Markets

The Dow Jones ended Friday down, but for the week up over 200 points, arriving at 11,103.  September unemployment report was released and 103,000 jobs were created for the month, far exceeding expectations.  That isn’t saying much, expectations were dismal as a result of August’s unemployment report showed 0 jobs created.  Included in the September report was an upward revision to August numbers, which showed that actually 57,000 jobs were created in August, not 0…Woops…. 

Southern Nevada Real Estate and Economy

Below is an article in the Las Vegas RJ reporting that the Clark County Commission issued over 4 million dollars in federal funds to rehabilitate and sell houses by Eastern and the 95.  The funds will also go towards down payment assistance for the buyers purchasing the homes.  

http://www.lvrj.com/news/commission-oks-4-million-in-federal-funds-to-buy-rehabilitate-and-resell-homes-131116398.html

On a random note, the Las Vegas Ski Resort is open for business!  It is the first ski resort in the U.S. to open.  http://www.lasvegassun.com/news/2011/oct/08/las-vegas-ski-resort-first-country-open/

Posted again in case you missed it

We are now seeing prospective home buyers that have had a bankruptcy, foreclosure or short sale in the past looking to re-engage in to home ownership.  So, the following question gets asked often now: When can someone who had a bankruptcy, foreclosure or short sale purchase a home again?  Below is a generic breakdown of when someone can purchase a home after such an event:

Conventional Loans:

·         Short sale/Deed in lieu of foreclosure: 2 years (with 20 percent down) OR 4 years with 10% down.

·         Bankruptcy: 4 years from discharge date

·         Foreclosure: 7 years from the date the bank takes the home back. 

FHA Loans:

·         Chapter 7 Bankruptcy: 2 years

·         Chapter 13 Bankruptcy: Can be in it, provided they have been making on time payments for a minimum of 1 year and acquire permission from trustee.

·         Foreclosure/deed in lieu/short sale: 3 years from the date the home is transferred to new owner/bank.

We are starting to see hard money lenders crop up that are willing to lend to a borrower sooner, but typically would require a minimum of 20-30% down, charge 3-5 points and offer a rate typically in the double digits. 

weekly comments

We are now seeing prospective home buyers that have had a bankruptcy, foreclosure or short sale in the past looking to re-engage in to home ownership.  So, the following question gets asked often now: When can someone who had a bankruptcy, foreclosure or short sale purchase a home again?  Below is a generic breakdown of when someone can purchase a home after such an event:

Conventional Loans:

·         Short sale/Deed in lieu of foreclosure: 2 years (with 20 percent down) OR 4 years with 10% down.

·         Bankruptcy: 4 years from discharge date

·         Foreclosure: 7 years from the date the bank takes the home back. 

FHA Loans:

·         Chapter 7 Bankruptcy: 2 years

·         Chapter 13 Bankruptcy: Can be in it, provided they have been making on time payments for a minimum of 1 year and acquire permission from trustee.

·         Foreclosure/deed in lieu/short sale: 3 years from the date the home is transferred to new owner/bank.

We are starting to see hard money lenders crop up that are willing to lend to a borrower sooner, but typically would require a minimum of 20-30% down, charge 3-5 points and offer a rate typically in the double digits. 

Financial Markets

The Dow Jones ended the day down 240 points, landing at 10,913 and putting the explanation point on the worst performing quarter in 3 years.  Friday’s catalyst for the sell-off actually came from China, as an important manufacturing report showed contraction for the 3^rd consecutive month.  This is concerning to investors because China, one of the only healthy economies, is showing signs of a slow-down.  A sluggish Chinese economy could accelerate problems for the global economy. 

The bond market rallied as a result of the stock market sell-off, and mortgage rates improved slightly.

Southern Nevada Real Estate and Economy

Below is an interesting article about the resurgence of the down town Las Vegas real estate market as well as commercial interest that developers have in the area. 

http://www.lasvegassun.com/news/2011/sep/27/interest-residing-downtown-soars/

Below is an article on a plan to develop a trail system that encompasses the entire valley.  This really doesn’t have anything to do with real estate but think it’s a great concept!

http://www.lvrj.com/news/group-unveils-new-trail-plan-for-valley-130900908.html

week in review

Financial Markets

The Dow Jones ended all five trading sessions up, and for the week the Dow ended up over 500 points, closing at 11,509.  US stocks appear to be the lesser of two evils as European debt issues continue to take center stage.  At the moment, US stocks appear to be the safer play with more upside than foreign markets, in the eyes of investors.

Mortgage rates lost nearly 100 bps for the week, and rates have begun to trend upward.  Inflation numbers released on Thursday came in hotter than expected.  As a reminder, a fixed rate of return investment, such as a mortgage-backed security, is not a prudent investment in the face of inflation.  Investors sell their position, which drives the yield (rate of return) up, which is essentially our client’s mortgage rate.  Mortgage rates will continue to climb as concerns of inflation continue to materialize, which is why I will continue to recommend locking in the interest rate early on in the transaction.

Southern Nevada Real Estate and Economy

The Brookings Institute released its 2^nd quarter Metro Monitor Economic Report this past week, and Las Vegas ranked among the highest metro areas for improvements in unemployment as well as Gross Metropolitan Product (like GDP but for the city) from 2^nd quarter of 2010 to 2^nd quarter of 2011.  Las Vegas improved its “MPD” by 1.1% and improved its unemployment rate by 1.5%...For anyone that played sports, “Most Improved” isn’t always the most admired award to win because it means you stunk at one point, but it is certainly another step in the right direction. 

Also, the report points out a glaring coincidence that markets with the most anemic economic conditions also have the hardest hit real estate markets. 

http://www.lasvegassun.com/news/2011/sep/14/brookings-las-vegas-slight-economic-job-growth-are/

week in review

We will be accepting loan applications for FHA loans up to $400,000 until September 16^th.  We are required to have credit approval by September 30^th in order to secure the financing.  After September 15^th, we can only accept loan applications for loan amounts up to $287,500…

Financial Markets

The Dow Jones held its own all week, reaching 11,500, only to give all of its gains, and then some, back on Friday.  Investors sold stocks amid fears of Europe, and in particular Greece, defaulting on its debt.  The Dow dropped over 300 points for the day and landed at 10,992. 

Earlier in the day, President Obama initiated a proposal to help stimulate job growth.  The proposal would cost 447 billion.  Included in the proposal is a reemphasis for improvements to the “HARP” refinance program.  While no details have been given, the speculation is that Fannie Mae and Freddie Mac would enable refinances of its own portfolio without an appraisal.  This would be huge for Nevada, as so many Nevadans that could refinance from a credit standpoint, cannot because of the lack of equity in their homes.

Southern Nevada Real Estate and Economy

August home sales for Southern Nevada boasted another strong month.  4,693 sales took place, of which 987 of the sales were townhomes and condos.  The median priced home slumped slightly to $120,000, however, the 3,706 single family residence sales are up 17% from July 2011 and up 31% from the same month last year. 

http://www.lvrj.com/business/las-vegas-home-resales-surge-in-august-129453263.html

Below is an article in the RJ that discusses how the low real estate prices provoke companies to relocate to Southern Nevada. 

http://www.lvrj.com/business/cheap-homes-may-spur-companies-to-move-to-valley-129608588.html

week in review

I want to wish you and your family’s a relaxing and safe Labor Day weekend!  (ok…how about we settle for busy!)

We will be accepting loan applications for FHA loans up to $400,000 until September 15^th.  We are required to have credit approval by September 30^th in order to secure the financing.  After September 15^th, we can only accept loan applications for loan amounts up to $287,500…

Financial Markets

The Dow Jones experienced more chop as it rose roughly 400 points by mid-week, only to give it all back on Friday, ending the week down 46 points at 11,240.  The catalyst for the drop was the August employment report, which showed a net 0 jobs gained for the month.  This adds to the fuel of the double-dip recession fire, and all eyes will be on President Obama and his upcoming speech on unemployment.  The unemployment rate held steady at 9.1%.  

Southern Nevada Real Estate and Economy

Below is an article ranking the top home builders in Southern Nevada for the 1^st half of this year.

1.      DR Horton 220 homes closed

2.      KB Homes 197 homes closed

3.      Richmond American Homes 143 homes closed

4.      Lennar 136 homes closed

5.      Harmony Homes (largest privately held builder) 127 homes closed

As a whole, the home building industry closed 1669 homes during the first 6 months of the year.  The median priced home was $197,903.  The top 3 master plan communities were:

1.      Mountain’s Edge (average priced home = $195,911)

2.      Providence (average priced home = $210,033)

3.      Summerlin (average priced home = $238,178)

http://www.vegasinc.com/news/2011/aug/29/dr-horton-kb-home-top-home-sales-list-first-six-mo/

week in review

Financial Markets

The Dow Jones posted an inevitable rally this past week, gaining 467 points in 5 days.  The biggest gains came on Friday, as investors bought into stocks primarily as a result of Fed Chairman Ben Bernanke’s speech.  According to analysts, he demonstrated just enough concern about the current economic conditions without showing panic.  The Fed hinted towards further stimulus to keep the economy out of a double dip recession but did not specify what tactics it would take.  The tactics could be released in September where the Fed will have an unprecedented 2-day meeting as opposed to the more common 1 day meeting.   

Mortgage rates held steady with typical 30 year fixed mortgage rates holding in the low 4’s.  

Southern Nevada Real Estate and Economy

A deeper dive into the July home sales report for Southern Nevada revealed interesting statistics.  46% of the purchases were by absentee owners, purchased as vacation homes or investment properties.  Resale homes are on pace reach an all-time high.  The average price per square foot for resale homes is $70.33 while the average for new construction homes is $99.47. 

http://www.vegasinc.com/news/2011/aug/23/economy-politics-cost-las-vegas-home-sales-report-/

We will be accepting loan applications for FHA loans up to $400,000 until September 15^th.  We are required to have credit approval by September 30^th in order to secure the financing.  After September 15^th, we can only accept loan applications for loan amounts up to $287,500…

With the addition to a critical fulfillment employee, we have drastically improved turn-times for our closings for the month of August.  My clients on average have secured final approval in 17 days from date of application!!  We are extremely proud and excited of this accomplishment.  Our branch is now ranked in the top 10 in the nation for PRMI for number of loans closed year to date, all this in our first year being open for business.  I want to thank you for your support and look forward to continued success working together!   

week in review

Financial Markets

The Dow Jones logged another disappointing week, losing over 400 points in value (slightly over 4%).  The Dow landed abruptly at 10,817, primarily over concerns about the global economy.  The stock market had its worst 4-week performance since March of 2009.  Mortgage rates improved despite what is typically considered a bond killer, a hot Consumer Price Index read.  CPI came in at .5%, much higher than .2% that was expected.  This would translate into an annual inflation rate of 6%.  Bonds, in the eyes of investors, appear to be a much safer play at the moment than the stock market.  In ordinary times we would have seen mortgage rates increase in the face of a report such as this. 

Southern Nevada Real Estate and Economy

An article published in the LV Review Journal highlights just how affordable purchasing a home in Las Vegas is as compared to renting.  Trulia.com, a San Francisco-based real estate tracking firm ranks Las Vegas #1 in the nation in this category.  It also mentions that investors from foreign countries that most commonly click on real estate in Las Vegas are investors from Canada and China. 

http://www.lvrj.com/business/survey-ranks-las-vegas-best-place-to-buy-home-127923503.html

Below is an article in which various research firms attempt to predict home values for Southern Nevada.  The most discouraging prediction comes from Fieserv, which is of the opinion that Las Vegas real estate won’t reach values from 2006 until the year 2030.  Mark Boud, a California-based economist is of the opinion that Las Vegas will see a 31% gain over the next five years.  Both agree that values will not completely bottom until 2012. 

http://www.vegasinc.com/news/2011/aug/16/firm-las-vegas-home-prices-will-hit-bottom-late-20/

FHA loan limits will go into effect on September 30^th.  I have been told that many of the major banks will no longer accept applications for FHA buyers requiring financing for more than the loan limits that are not set to go into effect for another 40 days.  We will be accepting applications for FHA buyers seeking between $287,500 and $400,000 up until the September 30^th deadline.    

week in review

Financial Markets

The Dow Jones lost ground again this week, but certainly could have been much worse.  At one point, the index was down over 600 points for the week.  The Dow ended the week at 11,269.  A healthy Retail Sales report instigated a rally on Friday, as sales were up .5%.  Investors seemed undeterred from purchasing stocks by the Consumer Sentiment Index, which came in at 54.9, much lower than the 62.5 number that was expected.  Mortgage rates for 30 year fixed products are now hovering in the low 4’s as a result of the carnage left behind in the stock market. 

Southern Nevada Real Estate and Economy

July sales for Clark County were released this week.  According to the GLVAR, 3,164 single family residences and 873 condos were sold for the month.  The sales clip is up 7.3% from July 2010 and down 12.8% from June 2011.  52% were purchased with cash.  20.2% were short-sales, 50.2% were foreclosures. 

http://www.vegasinc.com/news/2011/aug/09/home-prices-continued-fall-july-amid-decline-sales/

On a positive note for our region’s biggest industry, Gaming Revenue is up 19.9% for the month of June for Clark County as compared to June 2010, this according to the below article in the RJ. 

http://www.lvrj.com/business/nevada-gaming-revenues-jump-16-percent-in-june-127450258.html

As a reminder, we rolled out financing for individuals that own more than 4 financed properties.

week in review

FHA loan limits will drop form $400,000 to $287,500 on October 1^{st ,}  for Clark County.  This may be perceived as a big blow to what is already seemingly scarce financing supply for housing but if you drill down the numbers, it doesn’t appear that it would have a significant effect on the housing marking in Southern Nevada.  Here is why:

According to my trusted partners at Chicago Title, in the past 12 months there have been 2,398 sales between the price range of $300,000 and $415,000.  (This is the price range that is affected by FHA lowering the loan limits to $287,500).  Of  2,398 sales, only 278 were purchased using FHA financing.  Of the 278, it is quite possible that roughly 50% of these borrowers would have qualified for a conventional loan putting 5% down.  This translates into roughly 10 sales per month out of an estimated 4,000 sales that would be affected by the lower loan limits, which represents 1/4 of a percent of the housing market.  It is probably a good time to partner with a mortgage company that has the most aggressive conventional financing.   PRMI offers 95% financing with as low as a 660 FICO score.    

Financial Markets

My suggestion would be to not take a peek at your IRA or 401k statements…The Dow Jones dropped over 750 points for the week, down over 1,000 points for the past 2 weeks, essentially dropping 8%.  A typical 401k account with $100,000 drops roughly $8,000 in value.  The Dow ended Friday up 60 points because a better than expected jobs report was released.  154,000 new jobs were created for the month of July.  May/June numbers were revised upwards with an additional 54,000 jobs (all in the private sector) than previously thought.  Last, hourly earnings increased .4%, another good sign for the job market. 

Now for the bad news, The S and P downgraded US bonds from AAA to AA, despite a deal that was struck to raise the debt ceiling to stave off defaulting on debt.  This could result in a temporary double whammy, stock market sell off and bond market sell-off, which leads to higher mortgage rates in conjunction with loss of wealth.

Southern Nevada Real Estate and Economy

Not much in the way of local economic real estate data this week, but always a hot topic is the water levels at Lake Mead.  According to the below article in the RJ, the Colorado River is on track for its 3^rd wettest year in 50 years.  The water level is expected to get its biggest boost in nearly 15 years. 

http://www.lvrj.com/news/snowfall-giving-lake-mead-a-lift-127085668.html

week in review

Financial Markets

The Debt Ceiling Debate continues to take center stage, and investors continue to sell stocks until a deal is made.  The Dow dropped over 500 points this week, landing at 12,143.  Another blow to stocks was the GDP (Gross Domestic Product) reading of 1.3% for the 2^nd quarter of 2011.  Forecasters expected growth of 1.9%.  That wasn’t the worst of the report.  The report also revised 1^st quarter GDP that was reported at 1.9% to .4%!  (Not sure how that even happens…Did someone not use their abacus correctly the first time?)…A recession is defined as negative growth in GDP for 2 straight quarters and the US economy is getting dangerously close to this.  So you will hear about fears of a double dip recession in the upcoming weeks as a result of this report.  

Mortgage rates improved primarily because of a move the US Treasury made, that essentially bought an extra two weeks.  They set up a contingency plan that would pay investors of US Debt on time regardless if Congress passes a budget by Tuesday.  This indicates that the bond market is not yet concerned that a deal won’t get done. 

Southern Nevada Real Estate and Economy

A great article that supports that home prices in Nevada have over-corrected according to Mark Boud, a California-based real estate economist.  Something that I have said to many of my clients, just as prices didn’t make sense in 2006, they don’t make sense today.  Below is the link to the article in its entirety, actually twice because both papers covered the story.  Mark stated that the market is undervalued by as much as 45%. 

http://www.lvrj.com/business/home-price-drops-said-to-reflect-overcorrection-125939798.html

http://www.vegasinc.com/news/2011/jul/26/economist/

The Desert Express high-speed rail from Las Vegas to Victorville has passed all but one minor hurdle….a 4 billion dollar loan from the government…Below is an article with more details. 

http://www.vegasinc.com/news/2011/jul/25/runaway-train/

week in review

Primary Residential Mortgage ranked 10^th in the nation for issuing FHA loans for the first half of 2011.  Within the top 10, they ranked 5^th in percentage of serious delinquencies, which is about where we would like to see our parent company.  It shows that we are closing loans correctly, which gives us confidence that FHA would want to continue working with us but also shows that we are taking risk in the FHA loans that we close.   

Financial Markets

The Dow Jones gained over 370 points for the week from its low of 12,296, and ended the week at 12,668.  The gain was primarily a result of weakness in the bond market as opposed to strength in stocks.

The bond market is seeing selling pressure because investors are concerned that Congress and the White House won’t come to an agreement on the budget and most importantly raising the debt ceiling.  By not raising the debt ceiling, US Bonds could very well likely see a downgrade in its rating, which will trigger foreign investors to flee the US bond market in general and we will see a significant sell-off, which leads to yields moving in the opposite direction and would send mortgage rates up sharply.  On Friday, mortgage backed securities were extremely volatile.  They started out strong because it was rumored that the White House was close to an agreement on the budget and debt ceiling, only to have White House Press Secretary Jay Carney refute the rumors, which instigated the sell-off. 

Southern Nevada Real Estate and Economy

Home builders nationwide and locally were greeted to a better than expected sales number for the month of June this past week.  459 new permits were pulled in June 2011, up from 435 in May 2011 and up from 402 in June 2010.  Interesting quotes in the article below:

“Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders”. 

“In past modern-day recessions, housing accounted for 15-20% of overall economic growth.  This time around, (between 2009 and 2010) housing contributed to just 4% of the nation’s gross domestic product”…

These statistics are great examples of how the economy and housing are entangled together and why it has been such a long drawn out process to recover from the latest recession.  You need jobs to help housing and you need housing to help jobs…

http://www.lvrj.com/business/building-jumps-in-june-after-slow-spring-125875248.html

week in review

Financial Markets

The Dow Jones gained nearly 250 points for the week, providing distance to the 12,000 threshold it seemed to be stuck on and ended the week at 12,657.  However, Friday’s national jobs report put a damper on the overall weekly gains.  June’s unemployment report unveiled that only 18,000 jobs were created and missed estimates by over 100,000.  The private sector created 57,000 jobs while the public sector (government jobs) lost 39,000 jobs, so the silver lining is that the growth is coming from business owners and not over bloated government spending.  The national unemployment rate ticked up to 9.2%. 

Mortgage rates have remained fairly flat, bouncing between mid to upper 4% for 30 year fixed mortgages. 

Southern Nevada Real Estate and Economy

June sales for single family homes in Southern Nevada reached over 3,600 for the month which is up from nearly 3,000 in May (16.7%) and up roughly 300 (8%) from June 2010.  Another 911 condos/townhomes closed escrow as well, bringing the total to 4,540 sales for the month of June.  According to the article below, this is the 3^rd highest number of existing home sales ever recorded! 50% of the sales were paid with cash and the median priced home dropped from $126,000 to $124,500.  Last, there was a reported 22,702 homes listed on the MLS.  Below is the article in the LV Sun in its entirety. 

http://www.vegasinc.com/news/2011/jul/08/las-vegas-home-sales-surge-prices-continue-fal/

Below is a brief article that lists the top 15 worst real estate markets in the US, and Las Vegas is not on it! 

http://www.lvrj.com/business/yahoo-posts-worst-housing-list-and-no-mention-of-las-vegas-124878094.html

July is a great time to take a snap shot and analyze my performance so far for 2011.  Some interesting statistics so far:

·         20% of the clients I provided financing for so far this year were borrowers that were declined by previous lenders

·         The average transaction took 29.6 days to close (We are constantly improving to lower this number)…The quickest being 11 days.

·         Over 90% of the clients I provided financing for involved purchasing a home (as opposed to refinancing). 

week in review

Financial Markets

The Dow Jones continues its choppy holding pattern near the 12,000 mark, and finished the week at 11,925.  The Dow shed nearly 300 points between Wednesday afternoon and Thursday morning on the heels of Fed Chairman Ben Bernanke’s speech.  Bernanke downgraded the GDP from 3.0% to 2.9% for 2011, mentioned a “frustratingly slow” pace of job growth, and reset the national unemployment rate for the 4^th quarter of 2011 to hover between 8.6 and 8.9%, which is up from earlier predictions of 8.4% to 8.7%.  The kicker for stocks was the lack of rhetoric for a QE 3 (Quantative Easing) or any extension of the current QE 2. 

Southern Nevada Real Estate and Economy

May sales for Southern Nevada were up slightly from April as well as May 2010, with 3,111 recorded sales for Southern Nevada.  The median priced home actually increased slightly from $125,000 (April) to $126,000, however that number is down 11% from May 2010.  If you take a closer look though, this doesn’t necessarily translate into home depreciation because the number of town homes and condos (880 for May 2011) are up 14.4% from May of 2010, and have an impact on the “median priced home”.   The average priced town home and condo for May 2011 is $62,750.  If you were to strip out town homes and condos, the median price from May 2010 to May 2011 would be fairly flat.  43.8% of sales were REOs, 23% of sales were short sales and 51.4% of the sales were cash acquisitions.  (Data was extracted from the below article in LV Sun)

http://www.vegasinc.com/news/2011/jun/08/las-vegas-home-sales-prices-notch-rebound-may/

Below is a link to an article from the Wall Street Journal that discusses how affordable home ownership.  It could serve as a great reference for selling points. 

http://online.wsj.com/article/SB10001424052702304563104576361522020024248.html

Products PRMI is rolling out this month:

·         Up to 10 financed properties for investors

·         FNMA Home Path up to 90% Loan to Value for investors

week in review

Financial Markets

Stocks finished a horrible week horribly, as the Dow dropped nearly 400 points in just 3 trading sessions.  The final blow came in the form of the May jobs report, in which only 83,000 private sector jobs were created, only half of what many analysts predicted.  The national unemployment rate lurched up to 9.1% as a result of the lackluster job growth.  Analysts attribute the stagnation in job growth to the increase in energy prices (particularly oil) and the catastrophe in Japan. 

As a result, the price of oil dropped $2 per barrel to $98.   Mortgage rates improved throughout the week, and 30 year fixed mortgages now hover around 4.5%. 

Southern Nevada Real Estate and Economy

The day before the national unemployment rate rose to 9.1%, the state unemployment dropped to 12.5%, and Las Vegas unemployment rate dropped to 12.1%.  The Southern Nevada Index of Leading Economic Indicators rose .52%, mainly due to the boost in tourism (up 5.6%) and convention bookings.  Attached is the article in the Las Vegas Sun that discusses the report in further detail.  http://www.vegasinc.com/news/2011/jun/03/economic-indexs-rise-could-signal-las-vegas-job-gr/

Down Payment Assistance Programs:

Primary Residential has brought on its 2^nd down payment assistance program this past month, for the Nevada market.  In addition to State Bond, we now have the WISH program which offers a 3 to 1 match in down payment for first time home buyers that earn 80% of the median household income or less.  This means, that for every $1,000 the borrower puts down, WISH will contribute $3,000, up to $15,000. 

Unique Qualifying Method for Investors

PRMI allows using the proposed rental income on the subject property to help qualify for the mortgage, which assists in qualifying from a debt-to-income standpoint.  For example, let’s say the investor is purchasing an investment property, but his debt-to-income ratio is already at its limit.  Let’s then say that the proposed mortgage for the property the investor is looking to buy is about $1,000 per month.  Well, if the rental market analysis comes back with average rents at $1,000 per month, then the borrower essentially is not adding any debt to the debt-to-income ratio analysis.  It is an acceptable Fannie Mae guideline that many banks impose overlays to prevent borrowers from using to qualify. 

Have a great week!

week in review

Financial Markets

The Dow dropped another 43 points this week as investors were slightly spooked by the European debt crisis that cropped up again this week.  The Dow has performed well from a year-over-year perspective climbing nearly 15% in 12 months.  If you dipped your toes into the stock market 3 years ago, you would have lost 3%...5 years ago a gain of 10% (2% per year) and 10 years ago 10% (1% per year).  So, if you poured money into the stock market 10 years ago, you could have mimicked Jane and Michael Banks from Marry Poppins, and deposited your toppins and achieved roughly the same rate of return…

Bonds responded favorably to the consumer price index report that was released, which showed tame inflationary numbers, particularly when stripping out energy costs.  Tame inflation numbers are always friendly to the bond market, and as a result, mortgage rates move in a consumer-friendly direction.     

Local Real Estate and Economy

April home sales for Southern Nevada reached just over 3,900 sales, up 164 units from the same month 1 year ago.  23% were short sales, 47% were bank owned, and 30% were traditional sales.  Nearly 52% of the home buyers paid cash!  This can be a very depressing number for struggling loan officers.  With 1,900 licensed loan officers and another several hundred employed by banks who don’t require licensing, it leaves less than 1 loan per loan officer, assuming the pie is divided equally.  This indicates that we could continue to see consolidation in the mortgage industry or loan officers turning to other forms of employment, particularly as the job market continues to improve.  Either way, it seems to be a healthy sales month for Southern Nevada.

http://www.lvrj.com/business/las-vegas-home-sales-rise-in-april-121508269.html

Have a great week!

week in review

Good Afternoon, 

• This week, our branch closed our first FHA loan with a FICO below 620 as well as Nevada State Bond with Down Payment Assistance. 

Financial Markets

Stocks fell as the Dow dropped roughly 200 pts this week, landing at 12,638.  It would have been worse for stocks had it not been for a better than expected jobs report that was released Friday.  The private sector added 268,000 jobs for the month of April, which beat expectations by nearly 50,000 jobs. 

Oil prices plummeted and dropped nearly 15% for the week, as the price per barrel dropped below $100.  It was the largest weekly decline in crude in nearly 30 years.  Below is a link from CNBC that discusses the price of oil/gas and offers predictions on what to expect at the pump for the upcoming months.   

http://www.cnbc.com/id/42943799

Local Real Estate and Economy

MGM CEO Jim Murren offers statistics for the improvement in the casino industry, and sites that the industry is experiencing a full recovery.  Convention attendance and room revenue beat forecaster expectations and he states that the increase in gas prices did not affect travel numbers as much as feared.  Below is the link of the article in its entirety.

http://www.vegasinc.com/news/2011/may/04/mgms-jim-murren-recovery-has-finally-arrived/

A developer out of Texas is on the fast track to getting project approval to build a sports complex near the Mandalay Bay that would house the Las Vegas 51’s, bring a professional soccer team as well as potential NBA team to Las Vegas.  Bringing a professional sports team to Las Vegas and high speed rail to the beach in California are at the top of my wish list for Southern Nevada!

http://www.vegasinc.com/news/2011/may/06/arena-developer-snags-51s-site-behind-mandalay-bay/

week in review

Good Evening, 

**Programs of note:

• Foreign National (for Canadian citizens purchasing 2^nd home)
• Jumbo financing up to 90% LTV (up to $600,000 loan amount)
• Home Path: Owner Occupied, 2^nd home and investor
• FHA 203K
• FHA flips in less than 90 days over 120%

Financial Markets

The Dow Jones ended the week with a roaring comeback, ending the day at 12,505.  As of mid morning on Monday, the Dow was down to 12,141, as Standard and Poors lowered long-term US Debt ratings.  However, quarterly earnings continued to beat expectations, capped off by Apple, who’s earnings increased by 83% from last year.  According to Thomas Reuters, 75% of companies that have released 1q earnings have beat expectations. 

Bonds experienced light selling pressure, and mortgage rates worsened for the week just slightly.     

Local Real Estate and Economy

Home sales for March reached the highest level in 17 months, as over 5,000 homes were sold.  Below is an article in the RJ for more specific data. 

http://www.lvrj.com/business/report-sales-of-existing-homes-surge-in-march-120223864.html

Tivoli Village is just a week away from opening its first phase of stores.  The 850 million dollar project will finish the completion of its phase one stores by this upcoming winter.  Below is the link to LV Sun with the full-write up about the project.

http://www.vegasinc.com/news/2011/apr/21/tivoli-village-prepares-grand-opening/