TAKING THE HOUSING MARKETS PULSE JUST SAY AAHHHH
When you go in for your annual physical, you’re hoping for a sunny prognosis. Realtor® magazine isn’t a medical journal, but it does have a feature called “Market Pulse.” It reports on the patient’s vital signs (if you imagine the patient being the nation’s housing market). The state of the national patient can be relevant here in Las Vegas. In fact, the direction of the wider U.S. market is probably the best prognosis for what lies ahead for our own Las Vegas housing market. The NAR’s attending doc is, as always, Dr. Lawrence Yun. When his latest Market Pulse report just appeared in the Realtor mag, it wasn’t hard to picture what would have happened if the good Doctor had performed the pulse-taking in reality. There would have been an efficient receptionist, and then, the examination room. The wait might have been a few minutes, but if nerves had prompted a checking out of the academic shingle on the wall, it would have been reassuringly plastered with names like Harvard and Purdue. After the Market Pulse had been taken, the results would have been delivered with a comforting smile. “Jobs are growing,” was the first verdict, given as the doc folded the pulse-O-meter back into its case; “and interest rates remain low…” He would have paused to open the housing market’s chart to scribble a few quick notes, then, without looking up, “Sellers, meanwhile, are reporting faster sales, with homes averaging 36 days on the market.” Since that’s a lot faster than the 42-day average from the 2015 checkup, that was great Market Pulse news. But then Dr. Yun might have done one of those little brow wrinkles that doctors use when they’re about to tell us to exercise more or watch what we eat. “But tight inventory in many parts of the country continues to drive prices up…” At that point, having heard this so often, the Market Pulse patient would probably have tuned out the rest. For goodness sake! This lecture hasn’t changed for two years. It’s the one about not enough homes on the market, escalating prices and discouraging first-time buyers who can’t use home sale proceeds to fund down payments. It may be true, but we know, already! Then it would be time to check out at the reception desk with a promise to be back next year. For those whose primary interest is Las Vegas’s housing market, if the future is going to involve buying or selling a Las Vegas home, there will be a discreet little card dispenser off to the side of the counter. Be sure to take one—it says, “Call your Las Vegas Realtor.” That’s me!
FHA MIND CHANGE IS GOOD NEWS FOR LAS VEGAS APPRAISALS
It was a federal agency reversal that was startling in its effect: a change in guidance that actually clarified more than muddled! The change will directly affect Las Vegas buyers and sellers because the issue will impact the cost of Las Vegasresidential real estate transactions—specifically, in the area of home appraisals. As the first order of business—for those who have never bought a house or condo (or who have let the details fade from memory)—an appraisal is different from an inspection. An inspection is commissioned on behalf of a buyer to determine the state of repair of a property that is being purchased. It gives the buyer an idea of how much (or little) expense and effort is likely to be required in future years. As such, it can affect the terms of the purchase—or even whether a purchase is still in prospect. An appraisal, on the other hand, can be key for potential lenders in determining what is the collateral value of a property. Even if a buyer is willing to pay $400,000 for a home in Las Vegas, if the appraiser estimates the value at $320,000, it’s going to be all but impossible to find financing for the sale at the higher price. That’s not the only reason appraisals are financially vital. The appraiser gathers information about the property itself, looks at the recent transactions in Las Vegas, Texas to determine market conditions, and comes up with a likely market value—the amount buyers would probably be willing to pay. It’s a guess, but a highly informed one. In the previous decade, the world saw how important accurate appraisals (and the decisions based upon them) could be. When a combination of circumstances led to appraisals that gradually became more and more over-optimistic, banks offered mortgage loans that were too disconnected from the value of the property and the ability of borrowers to repay. When it became clear that an avalanche of foreclosures was inevitable, we saw what happened: global financial meltdown. As you might imagine, the regulators in the FHA were not pleased with having been apportioned a part of the blame for the housing crisis. As part of their response, earlier this year they tightened requirements about the work appraisers are required to perform. They were ordered to operate and physically observe appliances on a property. That’s right: turn on the washer, the dryer, the dishwasher, the trash compactor… This specific requirement is far outside the scope of what appraisers have, historically, been called to concern themselves with. At a minimum, it meant spending more time per appraisal—an added expense which would come due as part of the closing cost. And the difference in the ultimate work product—the appraisal value—would usually be insignificant. So when, at the end of last month, the FHA came out with a reversal of that appliance-checking requirement, it marked an unusual turn of events: a regulation that disappeared—pretty much on its own. Part of my job is to keep up with any and all changes that affect my clients, who can be assured that the paperwork and technical requirements are always handled properly. Call me!
HALLOWEEN IN LAS VEGAS IS ALSO THE END OF A SEASON
It just could be that the absolute best Halloween gift has been identified. It’s one that every Las Vegas resident would certainly be surprised to receive. Now, in case you are asking yourself who gives gifts at Halloween (other than the candy we hand out to the pint-sized ghosts and goblins), I agree that October 31 gift-giving isn’t in vogue. But thinking about it can be useful. It’s our last chance to get some mental practice in before the season for major league gift-giving hits Las Vegas. This week is our last chance to fully appreciate this time of year. I’m talking about the not-yet-Holiday Season season. These are the last few days when there’s no fussing over gift exchanges, Holiday partying, New Years plans—any of it! Like it or not, come November 1, as the first Halloween decorations come down, it will be off to the races. Suddenly Christmas carols will be everywhere—on the airwaves and over department store loudspeakers. Store windows will first fill with turkeys and pilgrims, then (even before the last Thanksgiving football game has gone into overtime), ads—yuletide ads—will descend upon the land. It’s something we tend to forget every year: Halloween isn’t just its own thing: it’s the calendar Rubicon separating the Holidays from the rest of the non-Holiday parts of the year. But that presents a special opportunity for Las Vegasresidents who’ve fallen out of practice with gift-shopping. Since nobody actually exchanges presents on October 31, the mental exercise can get your creative juices going without having to spend anything. The easiest Halloween gifting ideas are good for limbering up. It may be a little late for pumpkin-carving sets (everyone who favors jack-o-lanterns already has theirs, anyway). Likewise, candy is probably already near the bowls, ready to be handed over to the little spooks and goblins. A better idea might be a CD with soundtracks from “The Exorcist” or “Nightmare on Elm Street.” It doesn’t take long before most people realize what a good thing it is that we don’t really have to exchange presents at Halloween: it’s too tough to come up with original ideas. I gave up soon enough—which is how this best Halloween gift of all came to my attention (it was on the web). The perfect Halloween gift would be…a ghost town! It may be a little impractical, but if you search high and low, seven of them seem to be currently available. They aren’t all old mining towns, either (one is an island beach resort whose bridge burned down). Any of them would certainly surprise any Las Vegas Halloween gift recipient. They’d certainly have a hard time coming up with something to give in return. There is a possibility that I’m slightly prejudiced in the selection of the perfect Halloween gift (being that it’s a piece of real estate). But that’s why Las Vegas home buyers and sellers choose to give me a call when real estate is involved. I’m totally focused on the subject!
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