Monday, March 28, 2011

week in review

Financial Markets

Last week the Dow Jones essentially recovered its losses before the catastrophic earthquake in Japan and escalated violence in the Middle East.  The Dow started the week at 11,858 and ended at 12,250, a nearly 400 pt gain.  Towards the end of the week, the GDP (Gross Domestic Product) numbers were released and pleasantly surprised traders.   It showed that the 4th quarter of 2010 grew at a pace of 3.1%, which beat forecasters’ predictions of 2.8% growth.  This is a good indication that the economy has continued to grow which is why stocks   

Bonds sold off in typical fashion as trader’s concerns about the world events ease and decide to look for more fruitful rates of returns in the stock market.  Mortgage rates went up nearly .25% for the week, which matches the sizable shift in stock prices.     

Local Economy and Real Estate Market

The article below discusses the strengthening resale market in Southern Nevada and improving 90 day delinquency rates. 

http://www.lasvegassun.com/news/2011/mar/28/resale-home-market-making-comeback-so-far-year/

Below is an interesting article about the proposed road construction projects for Southern Nevada. Jacob Snow, the director of transportation and commission is quoted as saying that there are 10 billion dollars in road projects that are in the pipleline.  The Federal Highway Administration estimates that for every billion dollars spent on road construction, and estimated 27,800 jobs are created.   

http://www.lasvegassun.com/news/2011/mar/23/report-outlines-40-road-projects-boost-economy-mon/

Important Reminders:

  • FHA increases the monthly mortgage insurance premiums from .9% to 1.25% all case numbers pulled on or after April 18th. 
  • PRMI now allows for FHA financing on “flipped” properties with greater than 20% appreciation in less than 90 days.   
  • PRMI also is rolling out Home Path for investors by the end of the month
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Sunday, March 20, 2011

week in review

PRMI now allows for FHA financing on “flipped properties with greater than 20% appreciation in less than 90 days.    

Financial Markets

The Dow Jones experienced noticeable swells this past week, losing as much as 400 pts at one point during the week.  The tragic earthquake and tsunamis in Japan and the concern over their nuclear power plants potentially creating further damage took its toll on US stocks.  Later in the week, stocks rallied, particularly on Friday, when news broke that there was going to be a cease-fire in Libya.  The stock market gained 83 pts and landed at 11,858.  However, for those who tuned into the news this past weekend, you know that the cease-fire didn’t last long. Expect more market volatility Monday. 

The bond market rallied as investors fled stocks for the safety of US bonds in the middle of the week. Mortgage rates dropped but then lost ground Friday as investors began a re-entry back to stocks.    

Local Economy and Real Estate Market

Home sales for February 2011 broke 3,200.  57% (1,833) were foreclosure properties, 19% (617) were short sales and 23% (759) were “regular” sales.  Southern Nevada still remains a cash-heavy market, as roughly 50% of the buyers paid cash for the homes.    
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Sunday, March 6, 2011

week in review

The “What-if Simulator”: Primary Residential Mortgage is excited to announce the roll out of software that allows us to take a credit report and make alterations to it, to see what the score would improve to based on a certain action taken.  It is designed to take the guess work out of recommending what actions a potential borrower should take to improve their FICO scores. 

Financial Markets

The Dow Jones experienced choppy trading throughout the week, but ended slightly higher than last Friday, up at 12,169.  Investors wrestled with the upbeat unemployment report and political turbulence in the middle-east, which is directly translating into higher oil prices.  192,000 jobs were added in the month of February, and the national unemployment rate dropped to 8.9%, which is always a great signal for future earnings for companies. Surging oil prices could create stiff headwinds for economic growth and put a damper on earnings, which is why stocks gains were muted this week.

The bond market, against all odds actually improved slightly on Friday.  The gains merely recovered losses from earlier in the week, when the ADP payroll report exceeded expectations. (ADP payroll report is always used as a barometer for the real unemployment report that comes out later in the week...kind of like the Golden Globes to the Oscars). 

Local Economy and Real Estate Market

Lon DeWeese, CFO of Nevada Housing Division, announced the roll out of the initial phase of the Mortgage Assistance Program this past week.  $100,000,000 has been delegated to the state of Nevada to help with home ownership retention.  The 1st link is an article in the RJ about the release.  The 2nd link is the site you can visit to see if you are eligible for home ownership relief funds.


Zoning for an amusement park located near the Mandalay Bay has been approved by Clark County Commission.  Not exactly Disney Land but better than nothin’! 


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Saturday, February 26, 2011

Weekly Comments

***FHA mortgage insurance premiums will go up again on April 18th, from .9% to 1.15%, essentially increasing mortgage payments by about $30 per month (for $150,000 loan). 

Financial Markets

The Dow Jones topped of Friday encouragingly, at 12,130, which is down over 260 pts for the week.  Political turmoil throughout the middle-east has investors fleeing stocks for safe-haven bonds and various commodities.  The developments over-seas have only temporarily assisted with mortgage rates this past week. 

As you probably have all noticed gas pump prices increasing by the minute, the price of oil has spiked to $97 per barrel.  High oil prices will adversely affect mortgage rates because the price of oil has a direct impact on inflation, which is a mortgage-backed security’s arch-nemesis.

An increase in oil prices leads to instantly higher shipping costs and producers of goods have no choice but to pass the cost increase on to the consumer.  If the costs of the goods we consume are increasing by 5-7% per year, yet the mortgage-backed security is only earning 4% rate of return, the investor effectively loses his money by parking it in the bond.  The rate of return for the investor (which is the mortgage rate for the borrower) has to increase to make it an attractive investment again. 

Local Economy and Real Estate Market

Moody’s released a report about the future of the Las Vegas tourism industry, and appears to be cautiously optimistic.  The reader’s digest version is that visitor volume will continue to improve but profitability will not make major strides until 2012, because of all of the new hotel rooms that have been added over the past 12 months.  The “X” factor is…our favorite topic this week…OIL.  High oil prices will lead to higher airfares and less visitors to Las Vegas.


Home sales for Southern Nevada reached nearly 3,400 for the month of January, with the median price of new homes increasing slightly and the median price of resales dropping.  20% of the 3,098 resale transactions were short-sales.  ½ of the buyers paid cash..

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Friday, February 18, 2011

Weekly Comments

Good Evening,

Financial Markets

The Dow Jones chugs along and ends the week with another 100 + point gain, landing at 12,391.  100 pts may not seem like much, but it is equivalent to nearly 1%.  If you earned 1% per week, your initial investment would double every two years. 

The bond market, and in particular mortgage backed securities, held its own, with the price of the Fannie MAE 4.0 Coupon improving slightly this week.  There were no significant reports that provided momentum for the rally.  It was more a matter of a market that was long overdue for a correction of some sort. 

On tap for the upcoming week is the Consumer Confidence Index, Existing Home Sales, New Home Sales, GDP and of course the Jobless Claims report.  It could be the makings of a tumultuous week for mortgage rates.   

Local Economy and Real Estate Market

Marcus and Millichap, a California-based research firm, released a retail sales report that predicts Las Vegas will experience an increase of 8% as a result of improving economic conditions nationally.  The report also predicts that casinos will expand payroll for the first time in 4 years. 


From a national perspective, 30 day mortgage delinquencies fell in the 4th quarter of 2010 to its lowest level in two years.  Below is the link to real estate expert Diana Olick’s article. 

http://www.cnbc.com/id/41646405


This past month represents our 5-month anniversary, opening up a branch for Primary Residential Mortgage Inc.  Up until now, I have only been able to tell you what we “CAN” do for you and your clients.  I’d like to take a moment to tell you what we “HAVE DONE”.     
·         The past 7 purchase transactions have taken an average of 20.7 days to go from application to final approval and docs to title.  The fastest being 14 days, all but one was final-approved in less than 20 days.  2 were transferred from other lenders that struggled for weeks to secure financing. 
·         This past week, we funded a 95% conventional loan in which the buyer’s FICO score was under 680. 
·         Because I have access to a phenomenal “in-house” underwriter (who is seated literally 20 feet away from me) I have a 100% conversion rate of prequalifications, meaning not one buyer that I have prequalified has gone to contact and then unable to secure financing.
It has been a pleasure working with you all (you are only on this email if we have worked together previously) and look forward to providing a superior home buying experience for your clients! 
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Saturday, February 12, 2011

Weekly Comments

Financial Markets

The Bulls continue to run as the Down Jones gaining another 1.5% (181 pts) and ended the week at 12,273.  Friday’s micro-rally stemmed from the announcement of Egyptian President Mubarak’s decision to resign as well as a US Consumer Sentiment report that met expectations.  Included in the report was the Barometer of Economic Conditions that reached a level of 86.8, which is the highest it has been in over 3 years. 

Mortgage rates continue to inch higher as stocks continue to gain ground.  Also contributing to the bond market sell-off is the rise in commodities.

A significant 3-pronged proposal by the White House to unwind and dismantle Fannie Mae and Freddie Mac was released Friday.  The premise and hope is that the private markets, over time, will take over for Fannie Mae and Freddie Mac.  The general consensus is that it will inevitably lead to higher mortgage rates for the consumer, but that it will take years to make the transition.  Below is a link to an article in the USA Today that discusses the proposal.

http://www.usatoday.com/money/economy/housing/2011-02-11-fannie-freddie-mortgage-overhaul_N.htm?csp=34money&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+UsatodaycomMoney-TopStories+%28Money+-+Top+Stories%29

Local Economy and Real Estate Market

This past week I attended a round table discussion in which Real Estate Attorney, Robert Noggle, informed the attendees about how foreclosure mediation works, and I thought I would share with you the “cliff notes”.  Basically, once a home owner receives a Notice of Default, they have 30 days to request mediation.  In this instance, the home owner has the opportunity to meet with a representative from the bank for up to 4 hours to come to a resolution.  Robert mentioned that over 50% walk away with a resolution.  He also recommended that a homeowner bring an attorney with them, and was the first to admit that there was a self-interest in the recommendation but that there were other valid reasons why the homeowner should have representation.  Below is a link to the Nevada Supreme Court website where a home owner can look into mediation procedures. 


Dennis Smith released predictions for real estate in 2011.  If your 2010 was successful, then expect more of the same.  He expects new home sales, re-sales and home values to be relatively flat, with small upticks in re-sales.   

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Saturday, February 5, 2011

Weekly Comments

Financial Markets

The Dow Jones closed at its highest level since the summer of 2008, gaining 268 pts for the week and ending at 12,092.  The stock market rally was somewhat surprising considering that the employment report released yesterday was considered disappointing in some regards. 

According to the report, the private sector added 36,000 jobs for the month of January, which is far off from analysts’ expectations of nearly 150,000.  However, the average hourly earnings rose .4%, which was a pleasant surprise and the national unemployment rate dropped to 9%.  Also encouraging was the U6 reading (real rate of unemployment which includes “underemployment”), which dropped from 16.7% to 16.1%. 

Mortgage rates worsened as more investors sold their positions in bonds to satisfy their appetites for stocks.     
Local Economy and Real Estate Market

The Center for Business and Economic Research reported this past week that “the confidence level by the valley’s business leaders has reached its highest point in three years”.  Stephen Brown, the center’s director, stated that the report has a direct correlation to future outcome in economic conditions, based on similar reports conducted in other parts of the country.


NASA representative Lori Garver visited Rober Bigelow’s Aerospace Facility in North Las Vegas yesterday.  Bigelow hopes to convince NASA to contribute funds to help develop his ultimate dream of space travel and lodging by 2015.  I’m not really sure how this relates to real estate in Southern Nevada, I just thought it was cool. 


Products of mention to help you sell more homes:
·         FHA Choice Plus (Now, PRMI will allow FICO scores as low as 580!)
·         95% conventional financing with FICO as low as 660
·         90% financing for 2nd homes
·         90% financing for jumbo loans up to $600,000
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