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!