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.
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.
FHA loan limits will go into effect on September 30th. 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 30th deadline.
