HEADSUP LAS VEGAS MORTGAGE RATE ISNT STANDING STILL
In case you set your alarm clock to go off when it was time to buy a home, that clang, you may be hearing from somewhere in the distance could be it (figuratively speaking, of course). The reason has to do with the direction of town mortgage rates (among others). Now, I realize this could come across a little bit like Aesop’s boy who cried ‘Wolf’ since a year and a half ago the experts were unanimous in predicting that mortgage rates would rise throughout 2014 (to at least 5%, if I remember correctly). And not only did they not jump—after a short rise, they fell! The experts were wrong. To the extent I agreed with their call, I was, too—but at least I wasn’t lonely. And I also try to be clear that predicting the future of any financial movement is never a sure thing. The same is true today…but… Last week, less than a week after the Federal Reserve monetary policymakers emerged from their meeting, Bankrate web commentator Janna Herron published a view that sent alarm bells ringing in my head. It makes so much sense, I feel compelled to share it. Already publicized in the rest of the media was the announcement that 15 of the 17 Fed officials now agree that they expect to raise the federal funds rate at some point within the next 6 months (and one expert was quoted as expecting that as early as September or October). Fifteen out of 17 is an 88% majority so that it couldn’t get much clearer. The funds rate has been cemented to the ground at precisely zero for almost seven years. Since 2008. Local mortgage rates are based upon that Fed funds rate. When it rises, mortgage rates have to rise, or lenders would have to be reclassified as charitable enterprises (not likely). The reasons given for the Fed governors’ near-unanimous prediction are both the rise in the pace of job gains and, as was reported, “The Fed also noted improvement in housing.” Now, that news may have prompted local mortgage-rate watchers to sit up and take notice—but not necessarily have them hearing alarm bells going off. But there were two other pieces of information: • First, the current national mortgage rates reported last week rose. They were pegged at just over the 52-week average for 30-year fixed loans, but at 4.13% it remained below the 4.33% of a year before. In other words, still (perhaps momentarily) in the historically basement-level range. • Second, new mortgage activity began to rise, moving 1.6% up from a week before. Applications had been dropping, but now they were on the move. This while home builder confidence levels soared, with expectations hitting the highest levels in nearly a decade. As with any batch of economic numbers, the signs can be interpreted in multiple ways, but one way sure does seem to stand out: mortgage rates are attractive now, housing activity is almost certainly on the rise, and mortgage rates and monthly payments are very likely to become more expensive. The same thought may be occurring to more and more people as we enter the summer home-buying season: “What if I could pay less every month for the same home…for the next 30 years…” Note to area home-buyers. Listen carefully: that could be the sound of your alarm bell going off! If you think you hear it, now would be a great time to give me a call!
LAS VEGAS HOMES FOR SALE GET BOOST FROM NATIONAL FORECAST
Suppose you are a Las Vegas homeowner who intends to move to a different home eventually, but for the moment, you aren’t under any particular deadline pressure that would dictate when you have to put your home on the market. In that case, you’re likely to keep tabs on overall market conditions, awaiting what looks like circumstances favor those with homes for sale. Twice a year, the National Association of REALTORS® issues their economists’ midyear forecast—it appeared last week. For those with homes for sale in town (or anyone thinking about adding theirs to the homes already for sale), the outlook was heartening. The forecast was for the greater U.S. economy to improve, bouncing back from the weather-blasted winter stall that made the first quarter a disappointment. Subsequently, consumer spending opened up, causing expectation that the GDP would rise in the remainder of the year. Overall, the forecast for 2015 was positive, though lukewarm. As a whole, the year promises to be “not bad but not great.” On the other hand, focusing narrowly on the outlook for U.S. housing market activity—homes for sale—the upside momentum was already decidedly more in evidence. The prospects for any single one of the Las Vegashomes for sale depend upon a combination of factors, but if national activity is any reflection, the latest numbers packed what you could call a “6-7-8-9 punch”: • Existing home sales in May notched a high-water mark not seen in 6 years (and the 2009 level had been artificially inflated because of an $8,000 homebuyer tax credit). • New home sales hit the highest level in 7 years. • Housing permits to build new homes registered an eight years high. • Pending contracts to buy existing homes for sale reached a nine-year high. Examining the demographics behind the figures, it was clear that, for the first time in quite a while, first-time buyers are back. Last year during the same period, only 27% of buyers were first-timers. They now make up a more normal 32%. As prices brought by homes for sale continued to rebound, institutional investors were disappearing from the scene, creating a more typical mix of buyers. A major part of the reason homes for sale were fetching “stronger than normal home price growth” had to do with a shortage of inventory—ascribed to the volume of new homes being built (or not being built). The rule of thumb is generally for about 1.5 million new homes to be constructed per year, a mark that’s failed to be realized for some years. In 2009, only 550,000 home were built—and the total had barely reached a million through last year. But now, with optimism among homebuilders at newly robust levels, it’s expected that normal output will have fully resumed by 2017. The other major factor boosting sale prices was the specter of mortgage rate increases. Rising mortgage rates “initially rush buyers to decide”—just the kind of sign that could tip the scales for a homeowner who’s been waiting to add their property to the homes for sale in town. Should you decide that this summer is shaping up to have just the conditions you’ve been waiting for, I hope you’ll give me a call for a no-obligation consultation!
INCREASING THE VALUE OF YOUR LAS VEGAS PROPERTY IN FOUR STEPS
As soon as you decide that you will be putting your Las Vegas property up for sale—whether soon or at some point in the foreseeable future—it’s also time to get strategic about growing your property’s value—starting with a generous dollop of objectivity. The difficulty stems from a truth about how everybody perceives much of their property’s value. We escape from hurly-burly of daily living by retreating to the comfortable confines of our home—our place. A good part of its value to us and to our family is its sheer familiarity—the “hominess” that makes it our personal haven. But some of the very things that make it so comfortable to us will be off-putting to outsiders—and they are the prospective buyers. Our great leather easy chair (the dark brown one that’s gotten a few shades lighter where we sit, and a little off-color where the spills happened) may look a bit peaked to the untrained eye, but it’s been that way for years: who cares? The back door needs to be bolted to stay shut…we do that without even thinking about it—hardly an issue! The sofa may sag, but it sags exactly right (for us)! The bathroom window that’s sort of stuck (okay, maybe it’s painted shut)…etc. etc. etc. Professionals are of one voice about the real value you add to a property when you go to the trouble of systematically depersonalizing it. It helps to approach doing that seriously and deliberately—to tackle it in an organized manner. There are any number of ways to go about that, but here is one way that will pay off: Step 1 Make a list. Starting from one end of your Las Vegas property, note with pencil and paper every nit-picky detail that is other than what you would expect to find if it were a brand new home. This is not as easy as most people assume, because there will be such a great number of details, that a) it will be very tempting to start skipping some of the minor ones, and b) you will find it hard to resist the urge to start fixing the easy ones as you go along (don’t do it: you’ll derail the list-making!) Step 2 After a decent interval, sit down with the list and re-classify each item into an Easy Self-Fix List and a Professional-Attention-Needed List. Step 3 Get bids from the appropriate local professional tradespeople, calculate which fit your budget, then schedule the work. Step 4 Get started on your own endeavors to address the Easy Self-Fix List. You’ll be able to organize your own efforts to finish up about two weeks after the last of the tradespeople are scheduled to finish their projects (a two week grace period is realistic: you are aiming to finish everything about the same time).Following these four steps will put you well on your way to increasing the value of your Las Vegas property. And at any point in the process—from before Step 1 to the satisfying moment that closes Step 4 —give me a call to discuss how to convert all that increased value into a profitable home sale!
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