FINALLY LAS VEGAS BOOMERANG BUYERS SEE DAYLIGHT
There is a seven-year window for some past Las Vegas homeowners—and it’s one that’s opening, not closing. The ‘window’ in question is the one that could activate Las Vegas “Boomerang Buyers”—which would come as good news for the local home sales. Some background about Las Vegas Boomerang Buyers. It’s a term coined in the wake of the subprime mortgage fiasco, describing those burned by the housing crisis. They were, on the whole, Baby Boomers and GenXers, who were caught up in the Great Recession. For many who became enmeshed in the effects of the nasty confluence of the cliff-dive of the subprime mortgage bond market and collapse of residential valuations that swept the nation, foreclosures or short sales became, literally, offers they couldn’t refuse. Not only did the bitter aftertaste leave many with a spoiled appetite for homeownership, but the damage done to the credit ratings of millions made that a moot point: they had fallen off the scale when it came to qualifying for a new mortgage. But that was then; this is now. It’s a now that, in RealtyTrac Newsroom’s breathless phraseology, “the first wave of…homeowners who lost their home to foreclosure or short sale during the foreclosure crisis are now past the seven-year window they conservatively need to repair their credit and qualify to buy a new home.” Soon, more and more Boomerang Buyers in Las Vegas will be in the clear if they choose to be, and they are only the first wave. “Nearly 7.3 million potential boomerang buyers nationwide will be in a position to buy again from a credit repair perspective over the next eight years,” says Newsroom. Bankrate, the mortgage and financial advice website, sees the group as particularly well-qualified. They quote a broker in North Carolina to that effect: “If you’ve been through a foreclosure, you’ve already been a homeowner…you know the process. You’ve been through hell sometime in the last seven years…” That word ‘sometime’ is apt because the seven year period has been anything but uniform. Guidelines for that “waiting period” have sometimes been three years for FHA qualifiers or even shorter for portfolio loans that lenders keep on their books. But whether it’s three or seven years, the clock usually starts ticking only when a foreclosure has been completed. But according to FICO, although a foreclosure remains on a credit report for seven years, “the negative impact will fade as time passes.” For potential Las Vegas Boomerang Buyers still waiting for a foreclosure to disappear altogether from their credit reports, there are other routes that can lead to a homeownership reboot. For more on buying or selling, I’m always pleased to sit down and discuss some of the great opportunities in our current market!
A FORECLOSURE IN LAS VEGAS NEW SITUATION FAMILIAR DETAILS
The Las Vegas foreclosure situation is a good deal different from what we were discussing a few years ago when the tidal wave of 7.3 million foreclosures and short sales swept the nation. When The New York Times “Dealbook” recently pronounced that the supply of cheap foreclosed homes in America is dwindling, it came as news to…well, no one. Let’s face it: Las Vegas investors wouldn’t need to look up the latest statistics to guess that number of offerings would be down. The continuing rebound in home values, slow but steady improvement in the overall economic picture, and even just the passage of time has to mean that the glut of subprime-crisis-era foreclosures would have worked their way through the system. But there are always new foreclosures, and for anyone hoping to make a bargain buy in today’s Las Vegas foreclosuree market, the same qualities that brought post-crisis the success still apply today: • Knowledge of (or willingness to research) comparable neighborhood values • Realistic appreciation of rehabilitation costs • Decisiveness (willingness to act swiftly) • Ready access to investment capital The principal difference in today’s Las Vegas foreclosure milieu is that far fewer are available, and the difference between market value and listing price has narrowed. There may be fewer competitors to worry about, but some are still out there, as always. Today sees fewer institutional investors—in fact, some are leaving the market altogether, taking their profits and selling out to groups more committed to long-term property management. Aside from the qualities described, there is still no blanket formula for landing the best Las Vegas foreclosure deal. But among other observations, there are two that are worth considering. First, despite the lessening of the impact institutional investors previously had on the market, it may still be necessary to prepare to offer more than the listed price. The dwindling number of foreclosed homes tends to create an imbalance between supply and demand. If other buyers are offering higher amounts than the asking price, it can easily result in a bidding war situation. As always, by researching underlying values, the best investors avoid foreclosure buys that wind up being little more than break-even propositions. Another wrinkle to be aware of is the possibility of future cost increases. For instance, it can transpire that an investor succeeds in purchasing a property significantly below its true value, only to find that a reassessment by taxing authorities raises its property tax bill through the roof! Canny investors prevent this surprise by finding out how the local Assessor’s Office sets rates and schedules appraisals. The Las Vegas foreclosure picture constantly changes. If you are interested in the investment possibilities—or are looking to buy your next home—don’t hesitate to give me a call to discuss the latest offerings!
NEWS FLASH MEN WOMEN HOUSE HUNTERS DIFFER
Last week, The Wall Street Journal made it official: they had a slow news day. It was February 11 (that was Wednesday) when they ran the feature story, “A Gender Gap in Real Estate.” This was something Las Vegas house hunters (not to mention those hoping to attract their attention) could certainly appreciate: an article about what men and women consider “very important” when it comes to features in homes. Author Adam Bonislawski based his story on National Association of REALTORS® survey information; the results pointed to some dissimilarities between what women and men look for. Now, I’ve had a good deal of experience helping both men and women house hunters in Las Vegas, so it didn’t come as a complete surprise that their priorities differ. For instance, I was not at all surprised about the contrasting emphases the two put on the importance of having a walk-in closet in the master bedroom. The only surprise was that it was the men who found it much more important (38%-29%)! What about house hunters’ feelings about the importance of kitchen appliances being new? Same phenomenon: men 38%, women 29% (possibly because appliances are gadgets and men like the newest gadgets). How important is it that a home be single level? The sexes reverse: Male house hunters think it is very important 18% of the time; women, 31%. I’d bet that within the 18% that are masculine we’d find a disproportionate number of stay-at-home dads. House hunters registered a big gap when it came to rating 9-foot or higher ceilings as very important. A miniscule 8% of females agreed while nearly three times that many of their male counterparts thought so (21%). One harder to guess feature would have been the desirability of a kitchen island. Nineteen percent of male house hunters found it very important, versus just 8% of the females. Does this mean women are tired of entertaining? Do they no longer consider their masculine counterparts capable of sous chef action? Or is it that more men are taking over the cooking duties? I’d have to admit, I’m less than certain that these national averages are 100% reflective of what house hunters in Las Vegas prefer. Yes, Las Vegas men certainly value attics (13%) more than the ladies (7%)—they do tend to spend more time up there (but neither are terribly committed to that form of high living). Basements are preferred by close to equal numbers. Being that these findings are sort of interesting (not fascinating, perhaps, but at least sort of interesting), you might be wondering why in the beginning I thought it was evidence that the WSJ was having a slow news day. It’s because of some tiny print at the bottom of a graph, which gave the date of the NAR survey—all the way back in 2013! More up-to-date is what we find unfolding for today’s Las Vegas house hunters: give me a call to get the latest!
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