Posts in category: AB284

House money Many of the critical factors for a recovery in housing prices are in place. The drop in housing prices, coupled with the current low mortgage interest rates has brought affordability back into alignment with historical ranges in most markets. Unemployment levels appear to have bottomed out, and a growing number of real estate economic indicators also suggest that, on a national level, we’re also at, near, or just past the bottom of housing prices. Mortgage interest rates remain near all time lows. In many areas, today’s buyers have the best opportunity to choose from a very large home inventory at the lowest prices. Nonetheless, there is a great variance among local housing markets, and some may be looking at further declines in home values, perhaps even double digit drops, before prices hit bottom.

Consumer confidence will play a big role in any housing recovery. According to a June and July survey by Fannie Mae, 70% of Americans think it is a good time to buy a house, an increase of 6% responding to the same question in a similar survey conducted in January 2010. Not surprisingly, 83% also think now is a bad time to sell. Those surveyed are also becoming more optimistic about home values-78% think that home prices will either remain stable or increase next year-a 5% increase over the January survey.

Mortgage rates will also play a big role in the housing recovery. They are very low by historic standards today. Importantly, Federal Reserve policies intended to prevent a double dip recession are helping to keep mortgage interest rates low, and are likely to remain in place for some time. The slow recovery of the business sector, while not encouraging from an employment standpoint, also means that there will be less upward pressure on interest rates in the near future.

On the downside, the share of consumers who think housing is a safe investment has dropped from 83% in 2003 to 67% today. Delinquent borrowers and renters still think a home is a safe investment (57% and 54% respectively). More optimistic about the safety of a home investment were those with mortgages (74%) and even those with negative equity (69%). Minorities were also more optimistic on this question than the general population. Also not a big surprise, more people (33%) say they will be more likely to rent their next home, up from 30% in the January survey.

Recent forecasts about home sales and home prices have varied. Most suggest stabilization or near stabilization of housing prices this year, followed by a slight increase next year. On a national level, actual sales and price results have been mixed from one month to the next, suggesting that we may be at or near the bottom of home values.

Most important to your own home purchase decision is the current status of your local market. While at the national level there are many indicators that suggest that now is a good time to buy, the current state of your local market is the most critical consideration. In many areas there is even significant variance from one neighborhood to another. Some markets never got badly hurt by the real estate bubble and are still stable. Others, whether they suffered from price declines or not, are already showing signs of a healthy recovery.

Unfortunately, some of the hardest hit markets and/or neighborhoods are likely to face still more declines in housing prices. Mortgage insurer The PMI Group Inc. estimated recently that just over half of the 384 markets they follow, including 70% of the 50 largest metro areas, face a high risk of declines in housing prices over the next two years. Particularly in those markets, the size of the “shadow inventory”(foreclosed homes and nonperforming mortgages owned by lenders), could delay housing recovery, as could the growth in “strategic defaults” (homeowners who can afford to make their mortgage payments but who choose instead to walk away because they owe so much more than the home is worth).

Since homes tend to appreciate only 2-4% annually over the long term, it doesn’t make sense to buy right now if your area is at risk of dropping another 10-20% in value when you could rent the same home today for less than mortgage payments. The short term direction of housing values for current homeowners who are moving up or downsizing buyers is of far less consequence, because their homes market value will be similarly affected whether they stay in their current home or replace it with another. For them, current mortgage interest rates are far more important, and they strongly favor buying now.

While you may want to defer your purchase for any of these reasons, buying a home remains a wise long term economic decision for most of us:

1. Homes can provide an excellent return on investment (ROI). Although historic annual home appreciation rates are modest, the purchase is usually highly leveraged. If you put 10% down, a modest 3% annual increase in your home’s value represents a 30% ROI.

2. There are many opportunities to gain sweat equity. For example, a well landscaped home can be worth thousands more than a home with a barren landscape. You don’t have to spend that much to get such a return. Buy a shovel and a bunch of small $5-$20 shrubs and trees, and wait a few years. Do your own remodeling (or some of the finish work, such as painting and trim) and those projects can add more to your home’s value than they cost.

3. A landlord can (and will) raise your rent, but a lender can’t raise your mortgage interest rate (assuming that it is a fixed rate mortgage).

4. Many people pay off their mortgage by the time they retire. With no more mortgage payments, they are able to live comfortably on modest retirement income sources. The equity is also transferrable-many homeowners who move to different locales after retirement simply roll the equity from their old home into a paid off retirement home. A lifelong renter may well have paid more in aggregate for housing over their career, but they will still have to pay rent and many find that this additional expense severely cramps their retirement lifestyle.

5. Most owner-occupied neighborhoods have a sense of community that results from a relatively stable set of residents. That rarely happens in rental environments, where the residents of the neighboring apartments may come and go before you even meet them.

Key to a smart decision on whether or not to buy a home now is research into your current market outlook. There is plenty of research data on the Internet regarding the likely market direction of your area. Experienced real estate agents can also provide very useful local market insight.

If you are looking for a new home or wanting to sell your current home,  please contact a New Home Resource Realtor® today at 702-365-1000. Broker Joanna Piette, and agents Denise Moreno Thrasher, Jessica O’Brien, Evelyn ‘Beng’ Kern, Lance Partin and Kathy Paterniti are all here to help!

 

Courtesy of the American Homeowners Foundation and the American Homeowners Grassroots Alliance, www.AmericanHomeowners.org.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

ForSale_ClipArtThe economy has been on the road to recovery and this past April, United States home resales rose to the highest they have been in three and a half years. The National Association of Realtors® said that existing home sales increased nationally by 0.6 percent equating to an annual rate of 4.97 million units. This is the highest level that has been reported since November of 2009.

It appears that sellers are entering back into the market and are attracted by the rising prices.  This is a strong indicator of the economy’s upheaval and it is predicted that it will only continue to get better and to grow. Even with the rising prices in housing, more sellers have been entering the market and lifting the inventory of unsold homes by nearly 11.9%.

Although these increases are signs of a healthier economy, the National Association of Realtors® says the national statistics still fall short of what is considered to be a “healthy balance” in the market. In April, it reached a 5.2 months’ supply. To be considered a healthy balance in supply and demand, the housing market needs to be at 6.0 months’ supply. A monetary policy put in place by the Federal Reserve is helping the housing market back up to its healthy state.

Our agents are here to assist you in making your home buying or selling a seamless and easy process. With the housing markets on the rise, having an agent you can trust and rely on will be more important. That’s where we come in: to get you there first!

If you’re looking for a new home or wanting to sell your current one, contact a NEW HOME RESOURCE professional Realtor® today at 702-365-1000. Broker Joanna Piette, Denise Moreno Thrasher, Evelyn “Beng” Kern, Jessica O’Brien, Lance Partin and Kathy Paterniti are at your service!

Recovery to Continue in 2014, Says NAR; Rates and Home Prices Predicted to Rise

By Nick Caruso

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The real estate market will continue its road to recovery in 2014, with home prices rising 6 percent and mortgage rates hitting 5.4 percent. In addition, demand is predicted to plateau, all according to Lawrence Yun, chief economist and senior vice president of Research for the National Association of REALTORS®, who presented his 2014 market forecast during last week’s REALTORS® Conference and Expo.

Other factors aim to set the market back on the right path. Although there could be a possible negative impact due to rising mortgage rates, job creation and loosening underwriting standards should balance out 2014’s sales volume.

“There were two million jobs created in the past few months and we’ll see the same next year,” says Yun. “These people could potentially enter the market.”

Yun does not see, however, an increase in unit sales nationwide, as inventory levels remain an issue to keep an eye on. Currently, the nation is under one million and this number needs to increase 50-60 percent in order to get back to normal numbers.

“I don’t foresee that next year, but maybe we can at least make up half the needed gain to steadily reduce the inventory pressure,” he says.

While existing home sales are expected to remain flat at roughly 5.1 million units, new homes could rise by 25 percent from 430,000 to 510,000 next year.  This part of the market is still in recovery due to the difficulties for smaller builders to obtain financing. This should continue easing throughout the next year.

When prompted further about how the rising mortgage rate will affect sales and the market, Yun responded: “Assuming nothing changes further, I believe it takes about 10 percent right off the top in terms of people who qualified this year versus the same people who would qualify next year. If need be, NAR will be pushing for new legislation to clarify what QM and QRM are so that we don’t get hit by that 10 percent.”

With the housing market is recovering for most Americans, homeowners will be more concerned than ever about their home values in 2014. Actual price increases for 2013 was 11 percent, which is now expected to be a six percent rise next year. The way to relieve home price pressure is for more inventory to come into the market, says Yun.

“We were surprised by how fast inventory would decline, but there was always a fresh set of inventory trickling in as it went out,” he says.

Overall in 2013, investor activity has been normal, but numbers slightly declined. Though, more small-time investors entered the market, staying one step ahead of the population, consistently punching numbers to see what transactions made the most sense for them. “If investors remain active, it implies that housing is a good buy,” says Yun.

Despite some cautionary areas, the real estate market has its beacons of potential. The industry may not be back to its best numbers yet, but we are still heading in the right direction and making our way down that road to recovery.

“We’ve had a decent year this year and next year will be roughly the same.”

 
Reprinted with permission from RISMedia. ©2013. All rights reserved.

Happy Holidays!   There has been quite a bit going on in our marketplace today, from even further constraint in available housing, to increased NOD filings, to even higher sales prices in recent months.

A little bit of history……   In August 2009, Clark County saw a whopping peak of 11,482 filings of Notices of Default.    The filing figures remained steady around 4,000+/- per month, from 2010 through September 2011.    The October 2011 effective date of AB284 then caused filings to fall to less than 1,000 a month.

To clarify, the “need” to foreclose on a property did not change – what DID change was the bank’s ability to foreclose, due to the requirements of AB284.   You can read my blog post from earlier this year regarding AB284 to learn more.    According to the Board of Realtors®, foreclosures have fallen from nearly 50 percent of Las Vegas home sales to about 15 percent in October (we believe to be a direct result of AB284), and short sales now account for roughly 45 percent of the market.

As a result of AB284, default filings fell by as much as 80% through September, though the numbers have been growing over the past several months.     There were almost 2,100 Notices of Default filed in August 2012.    Additionally, as banks resolve past issues with MERS, we anticipate increased foreclosure activity – and may even see some lower prices as a result of the increased supply in available listings.

At this time, our current MLS inventory shows only 3,800+/- single family homes available, an unbelievable 10-day supply of housing!      This decreased inventory has caused asking prices for Las Vegas homes to increase 13.7% over a year ago, as reported by online site Trulia.com this morning, December 4th.     And according to Las Vegas-based SalesTraq, the median existing home price in Las Vegas has climbed from $100,000 in January to $124,000 in October.

We do try to report the most accurate, up-to-date information to our clients, but there could be a margin of error in our reporting.   Please understand that some of our comments may also be opinions and not absolute fact.

If you’re a home buyer or a home seller in today’s frenzied Las Vegas market, you need professional help.   Call Heather Brockhurst, Denise Moreno or Joanna Piette at 702-365-1000 and be a part of the right team!   HAPPY HOLIDAYS FROM NEW HOME RESOURCE!

 

The lack of resale housing available in Las Vegas has caused all out-frenzy to buy, perpetuating a steady increase in pricing over the past year.

The GLVAR (Greater Las Vegas Association of Realtors) reported earlier this month that the median price of single-family homes is up almost 14% since September 2011, and some sources that believe prices have increased as much as 20% from one year ago!    GLVAR reports that condominium prices are up 24% from this time last year.

Almost half of the Las Vegas market is comprised of short sales; foreclosure activity has slowed to barely a crawl since the inception of AB284, whose effects are still be greatly felt throughout the state.   This tight supply of homes is responsible for pushing up pricing from all types of home-sellers, who are taking advantage of the lack of inventory.

This increase in pricing is being felt in the appraisal arena (see my blog from 9-25-12) because comparable sales can’t keep up with the fast-rising pace of the newly listed properties.    Even new construction homes are suffering with low appraisals.

Some reports are showing sales volume is actually down from a year ago.   One must wonder if this surge in pricing isn’t keeping many buyers out of the arena.

When this will end is anyone’s guess.    For home sellers, NOW is a great time to sell your home for top dollar!!   For buyers, you need a professional agent who knows how to work well within this unique market. Contact Denise Moreno, Heather Brockhurst or Joanna Piette with New Home Resource today at 702-365-1000!

What is going on with today’s home values??!!       Whether you’re a buyer or seller in today’s market, it’s probable you’ll encounter appraisal issues!

Low inventory, likely due to AB284, has caused an all-out bidding frenzy for the few homes on the market today.   Prices are regularly being bid higher by anxious buyers, and prices set by sellers are often thousands of dollars above the recent comparable sales.    And when multiple bids drive a house price thousands of dollars above the listed price, appraisers are still coming in with values below the agreed-upon price.

Considering most comparable sales in the Las Vegas market are of ‘distressed’ properties that have been neglected and/or not maintained, in need of repairs, carpet, paint and landscape, we can see how a property in ‘good’ condition would appraise for less – strictly because the comps are lower.   And unfortunately, appraisers are not giving credit for the improvements and better condition of the non-distressed properties.

Appraiser reluctance to report local appreciation is becoming a significant obstacle.  Many appraisers are reluctant to make justified upward adjustments for superior property condition or upgrades, because they fear criticism that they are potentially overvaluing the property. Many Realtors® and loan officers feel that appraisers will go with a lower valuation so as not to upset overly-cautious reviewers at the appraisal management companies.

As Realtors®, we are increasingly seeing buyers who want a home that is move-in ready, and as their agents, we must prepare them to consider paying the difference between the appraised value and the agreed-upon purchase price.   The bottom-line is simple:    Buy a distressed property and immediately put $20,000+ into it, or, pay $10,000-$20,000 in appraisal difference to get the beautiful home that is move-in ready.

Lenders who finance the property use the ‘lower’ figure as the base for lending.  So, if the appraisal comes in $10,000 less than the agreed-upon price, that $10,000 is money you’d pay in addition to your regular down payment and closing costs.   In days past, sellers usually came down on their price to keep the deal together – – but today that is not the case.  Sellers are regularly standing their ground on the agreed-upon price because they know ‘someone’ will pay it.

Until our inventory issues are worked-out, we don’t see a quick end in sight to these issues.    If you’re a buyer in today’s market, prepare to pay a little extra $$ above appraisal to get a great house.      You need professional help:  Call a New Home Resource Realtor® today!    You can reach Joanna Piette, Denise Moreno, or Heather Brockhurst today at 702-365-1000 !!   Don’t waste another minute!

If you’re thinking about selling your home, I’m thinking of telling you NOW’s the time!

 

Now, I’m not a clairvoyant and I’m not privy to any secret housing information, so all of this is based on my own gut feeling….  But I DO eat, sleep and breathe real estate, every single day!!!

Here’s my take on it:    Due to the negative effects of AB284 on our housing market (see my blog from 6-25-12), our inventory is at an all-time low…..  Interest in buying today’s undervalued real estate is incredibly high.   Together these two things = frenzied buying, overbidding and top-dollars being paid for today’s real estate.    Literally everything from vacant land to condos, manufactured housing to duplexes, single family to luxury homes are all receiving multiple offers, and selling above list price, day in and day out!    Cash buyers and financed buyers alike are overbidding to be the winners.

It’s my belief that the  effects of AB284 causing the current UNDER-supply of houses will conversely cause an OVER-supply when all these kinks get worked out on the bank’s end.   Once this glut of held-back foreclosures begins to hit the system, the generous supply of available properties will put an end to overbidding to win something.    A buyer will simply move along to a better-priced home down the street.

So THIS is why I say that NOW is the time to sell your home!    Even if you are selling short, I certainly believe that your lender(s) would be more likely to approve a sale at a higher price where their loss is less.    It could be a good bargaining tool as well!     And NEW HOME RESOURCE has a lot of experience with short sales!

If you are a traditional seller with equity In your home, selling TODAY could put more $$ in your pocket for investments, to build savings, pay for a college education or wedding, pay off debts or to buy a different home that better suits your needs.

Regardless of the type of sale, you definitely want to be working with the tenacious and knowledgeable Realtors® at NEW HOME RESOURCE!    Call Joanna Piette, Denise Moreno, Debbie Sullivan or Penny Womack today at 702-365-1000 !!   Don’t waste another minute!

The assembly bill known as AB284 became effective 10-1-11 and dramatically reduced the number of foreclosure filings in Nevada.       Just as a disclaimer, we’re not attorneys and don’t even pretend to explain nor understand the whole of the law.

To put it as simply as possible, the bill requires lenders to file an affidavit regarding the possession of the defaulting homeowner’s mortgage note & deed.  This affidavit would be filed along with the “Notice of Default” (aka NOD), and failure to comply is now a Class C Felony.   The NOD is the act that really allows the lender to physically foreclose at a future date.   So you can see that the whole thing is a domino effect – one must happen before the other, before the other, etc and the end result of an REO listing is directly affected by this new bill.

Literally thousands upon thousands of eventual-foreclosures are piling up on the bank’s books, while the banks work toward meeting the requirements of AB284.      “When” these will all hit is anybody’s guess.

Today, we have a staggering few 4,500+/- properties listed on MLS – – – 487 of which are ‘REO’ (foreclosed) properties.     All of the others are traditional sales, short sales, and/or investor ‘flips’.     This low inventory has caused a buying frenzy wherein the lower-priced properties are receiving multiple offers within hours of listing.   One of New Home Resource’s $210,000 listings received FORTY (40) offers!

The name of today’s game is overbidding and patience.    Buyers are regularly agreeing to pay over the appraised value to not lose the property they’ve come to love.  Gone are the days of sellers reducing their prices to meet low appraisals.       Every good buyer’s agent is counseling their buyers as to these facts of today’s market and the probability of paying more than appraised value to keep the home in escrow.

What does all this mean?   This is not all bad!!!      First of all, in recent years, property values have been horribly, horribly undervalued – – we’re simply bringing the market back into line, one property at  a time.    Even paying a few dollars more for something is well worth it – the property is being bought at a fraction of where it sold just a few years ago!    Even at these prices, we are stealing homes!!   Interest rates are at an all-time low where you can OWN a gorgeous home for less than rent.

Just make sure you’re using a knowledgeable, professional Realtor® who knows today’s market, has excellent relationships with fellow listing agents and who can give you the best advice for your situation.      You should be using a NEW HOME RESOURCE agent!    Call Joanna Piette, Denise Moreno, Penny Womack or Debbie Sullivan today!  702-365-1000