LAS VEGAS MORTGAGE AVAILABILITY HAS IMPROVED WITH TIME
Whenever an unplanned and unwelcomed financial situation develops, a Las Vegas mortgage-holder can find himself or herself in the onerous position of being unable to keep up with the monthly home loan payments. If the unhappy situation continues long enough, the likely result is a foreclosure or short sale. In addition to losing the property, the impact on personal credit then takes years to undo. That means it takes that much longer for a consumer to acquire a new home and start to build equity again. Here as elsewhere, there was a raft of such Las Vegas mortgage defaults following the global financial meltdown. Even those who had no trouble servicing their Las Vegas mortgages could have suffered when they found that falling property values prevented them from refinancing—even when the purpose was to improve their property. Although those events happened years ago, it’s only now that their aftereffects are finally working their way out of the system. A recent article in NMP—the national Mortgage Professional’s magazine—delved into the changing status of those who lost homes in the turndown. The details they researched are interesting in themselves—details that are bound to have an impact on Las Vegas residential sales. First off is the fact that enough time has elapsed for those who weathered a short sale or foreclosure to begin to return to eligibility. They’re called “Boomerang Buyers”—and nationwide, there are estimated to be 7,300,000 of them! In 2016 alone, more than a million will become eligible to return to the home-buying market. According to NMP, “they’re returning to the market in droves.” The hardest-hit states were Nevada, Florida, and Illinois—but there are plenty of Boomerang Buyers scattered across the rest of the nation. The improving mortgage eligibility landscape extends beyond those who suffered the actual loss of their homes. To the more than 7 million “distressed” homeowners whose properties are still underwater (those who owe more than market value), the government’s HARP 2 program is one possible remedy. Its guidelines encourage lenders to relax the loan-to-value caps that had prevented refinancing for many of those homeowners. Reports are that it has already resulted in an increase in such refinances. Other program combinations are helping loan originators and REALTORs® get more bank-owned homes back into homeowners’ hands. These are properties that make up the ‘shadow inventory’ of unsold homes, many of which have fallen into disrepair. Because of that, they’ve been difficult to finance—and, therefore, difficult to sell. Through FHA 203K and Fannie Mae’s Homestyle® renovation mortgages, more ambitious prospective owners—including investors—are discovering they now have mortgage options that can put those fixer-uppers within reach. For those who have previously found it problematic to secure a Las Vegas mortgage with acceptable terms, it may be worth looking into today’s improved financing alternatives. Especially with mortgage interest rates at the levels we’re seeing this fall, what you find may be a pleasant surprise—one that puts you into the house of your dreams. Call me to discuss first steps!
NEW REPORTS HELP GUIDE LAS VEGAS REAL ESTATE MARKET DECISIONS
At the beginning of any month, Las Vegas onlookers can find batches of fresh reports about the national real estate market activity. Take October, for instance. We’ve just learned a bunch about what happened across the country. September’s numbers won’t be collected and analyzed for a while, but the fresh real estate market data for August is out, as well as July revisions. Since earlier findings are always being tinkered with as estimates are replaced with hard results, we also get improved readings from the earlier month. This latest batch of real estate market news was upbeat, downbeat, and, uh…sideways. Thursday was the first day in October, which was when CNN Money came out with some good old-fashioned cheerleading. “Americans went shopping for homes in August,” they headlined. The reason cited was for new home sales: they notched the highest volume since early in 2008: 552,000. It was a nice way to get the month’s data reports started. Home prices, on the other hand, were not yet available for the August timeframe—but July’s Case-Shiller Home Price Index had pointed upward. It showed a 4.7% rise in prices paid for homes from a year earlier. This made for “moderate, but still above average, price appreciation,” according to Realtor.com’s chief economist. The prices were seen to have edged up just 0.7% from June, which was “barely higher” yet “much higher than last year.” If that summary had been illustrated, it would have merited both a frowny face and a smiley face. There were other preliminary soundings about what the August price information was likely to be, and they were just as equivocal. The National Association of REALTORS® tracks pending home sales data (homes under contract but not yet closed), and by that measure, there was a slight retreat from July’s level. Yet although the preliminary number showed a 1.4% drop, that was still more than 6% higher than August 2014’s had been. Which was more compelling? Altogether, the news for sellers was deemed to be stronger. “Demand continues to outpace supply,” according to the NAR. “Shed no tears for sellers.” If that sentiment is shared by Las Vegas homeowners, it might nudge some into listing their home now rather than waiting for the next truly robust real estate market—traditionally not expected until next spring. Although fall and winter usually find fewer buyers on the prowl for new digs, those who do surface are generally regarded as serious shoppers. And since the number of Las Vegas listings usually declines as the holidays approach, there’s a good argument to be made that less competition tilts in favor of sellers. We have to wait until next month to get a read on how September activity fared; but for anyone who sees the advantages this fall’s Las Vegas real estate market offers, I share your opinion! It’s definitely worth giving me a call.
LAS VEGAS RENTAL PROPERTIES STAND TO BENEFIT FROM US TREND
The outlook for owners of Las Vegas rental properties has been buoyant for some time, but last month a widely-publicized report added to the long range outlook. The study presented multiple scenarios in which demand is likely to outpace the supply of rental properties in the U.S., creating a market bound to reward their owners. Not such good news for tenants, though—or, as The Wall Street Journal summarized, “Renting is unlikely to get easier anytime soon.” The report, which was issued by Harvard University’s Joint Center for Housing Studies and the affordable-housing organization Enterprise Community Partners, focused on the growing number of U.S. households for whom rent payments present a ‘growing burden’ in terms of the percentage of income they comprise. According to the study, nationwide, rents have continued to grow faster than incomes over the last 15 years, hindering affordability. Added to that, many federal housing subsidies have been cut in recent years. One result is that the number of households who pay more than half their income to rent is estimated at 11.8 million—three million more than in 2000. “Renters Will Continue to Struggle for the Next Decade, Harvard Study Says” was the headline that topped Laura Kusisto’s WSJ article summarizing the report. Although the study found that some factors contributing to the rise were due to temporary economic conditions that are unlikely to continue, other demographic factors will persist. Growth in groups of those in their mid-20s to mid-30s and in the Hispanic population (both groups “tend to be disproportionately renters”) have added to demand rental housing. At the same time, the private sector has had difficulty producing profitable housing “that is affordable to lower- and moderate-income families.” The trend might slow and even reverse should incomes begin to outpace rents—but the overall effect might have marginal results. One expert is quoted as saying that even a full decade of solid income growth would likely produce little change in the number of severely burdened households. One nay-saying group to challenge that outlook is the Mortgage Bankers Association, which in August concluded that Americans will form “at least” 10 million new owner household in the next decade. Such growth would be expected to ease pressure on rental stocks, lightening demand enough to slow rental price escalation. Whichever group is right, it’s evident that the owners of Las Vegas rental properties currently stand to benefit from some of the economic currents that continue to garner headlines. That’s the kind of incentive that interests the investment-minded—and if that sounds like you, why not give me a call to review some of the rental properties in Las Vegas currently listed for sale?
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