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/

week in review

Last call!!  FHA mortgage insurance premiums go up tomorrow to 1.25%.  If your buyer is going to contract today, it may not be too late to grab a case number in which the buyer’s mortgage insurance premium is .9%.  It has to be pulled by 1pm PST today. 

Financial Markets

It was another calm week for stock, as the Dow ended Friday up over 50pts, but down for the week by 37 pts, to 12,347.  Friday’s favorable economic data counter-acted disappointing earnings from some of the big banks.  Consumer Sentiment and Manufacturing reports beat expectations while Consumer Price Index (which is the primary gage for inflation) came in lower than expected. 

US Bonds, and in particular, mortgage-backed securities, rallied somewhat as a result of the low Consumer Price Index number.    

Local Real Estate and Economy

Dennis Smith hosted a Housing Conference this past week and dissected differences between new home sales and resale homes.  A statistic that stands out is the gap in median prices.  Resale median prices are now at $113,000 while New Home median prices hover near $200,000.  When you drill down the statistics a little further, the gap is simply not just about price and inability to compete.  The products themselves are drastically different.  Resale homes market, on any given month, could have as much as 25% of the sales in condo/townhomes.  The average price of a condo/townhome lowers the median price drastically, as many condos sell for $30,000-$40,000.  Below is the link to the rest of the article.

http://www.vegasinc.com/news/2011/apr/14/las-vegas-home-prices-tumble-1995-levels/

week in review

You’ll be happy to know that I have stepped down from my soap box with regards to the absence of Capitalism in the new era of the mortgage industry

Financial Markets

The Dow Jones experienced a relatively mild week of trading, as the high and low for the week were within 129 pts of each other.  The Dow ended the week down slightly, and ended at 12,380.  The threat of a government shut-down was averted late Friday, which could result in a rally of sorts when the market opens on Monday morning. 

Generally speaking, bonds saw selling pressure as a result of a deteriorating US Dollar (against the Euro).  A weak dollar translates into inflation.  Inflation translates into selling pressure in bonds, and ultimately higher mortgage rates, which is what we saw Friday. 

Local Real Estate and Economy

March home sales reached over 4,300, up more than 1,000 from February of this year.   Over 50% were cash buyers. Roughly 26% of the sales were short sales and 47% were foreclosures, for a total of 73% that were “distressed” sales.  Below is a link to the Las Vegas Sun for more specifics of the sales data.   

http://www.vegasinc.com/news/2011/apr/08/las-vegas-home-sales-increase-march-prices-drop/

An innovative Health Care mixed use project was revealed this weekend that is projected to bring 17,000 jobs to the Henderson area over the next several years.  The project, Union Village, could break ground as soon as the end of 2011. 

http://www.lasvegassun.com/news/2011/apr/07/henderson-announces-plans-works-15-billion-health-/

PRMI has opened up the Home Path product to investors.  This enables the borrower to put just 10% down on investment properties, but is only specific to Home Path Eligible properties