LAS VEGAS JUMBO MORTGAGE OUTLOOK CONTINUES TO BRIGHTEN
“The Jumbo Jungle” may sound a little like the elephant compound in a wild animal park, but it’s actually a seldom-quoted tab under The Wall Street Journal’s online Real Estate section. The “jumbos” being discussed are the trunkless kind—the hefty mortgage loans whose center rings are found in binders instead of circus tents. Judging from the latest discussions Las Vegas homeowners will find lately, these jumbos aren’t about to become endangered anytime soon. For one thing, 2015 registered the highest activity for the behemoth loans ever. This year’s follow-up, according to the WSJ, will be unlikely to slow the pace. The reason behind the jumbo mortgage market’s strength has a lot to do with the down stock market. Last week ended with another swoon, led by the tech stock sector. Investors were thought to have been worried by some poor earnings performance and a general “realization that the world is slowing.” According to Inside Mortgage Finance, jumbos accounted for a full fifth of all mortgage lending last year—the highest percentage of the market since 2002. Las Vegas residents looking to borrow in the high-end market may also find a variety of interested lenders as asset investment dollars shift into real estate as “a safer investment.” It was widely held that the market dip made it more likely to momentarily halt any rise in interest rates. By week’s end, mortgage rate research website HSH.com marked another drop in conforming rates, as well as the “Federal Reserve’s apparently more cautious position with regard to raising interest rates.” That “apparently” was probably well-advised, given industry experts’ recent history of hit-and-miss prognosticating. Nonetheless, the Jumbo Jungle writers boldly headlined “WHAT’S AHEAD FOR JUMBO-LOAN BORROWERS in 2016.” Their answer was increased likelihood for jumbo loan interest rates holding below 4% “…for a while longer, which also could make borrowing large sums more attractive.” Going further, JJ quoted one mortgage sales manager suggesting that the fear of eventual rate rises could spur a “home buying frenzy” in the spring, adding to a rush of refinancing by adjustable-rate borrowers reaching the end of their fixed-rate terms. Las Vegas jumbo loan applicants won’t have to be in any kind of a ‘frenzy’ to take advantage of today’s continuing low rates and a general move toward an easing of credit score requirements. I’m glad to help point my clients toward the most active Las Vegas’ lending resources—those that consistently provide sound service to Las Vegas homeowners.
NEW SURVEY COULD REVEAL LAS VEGAS REAL ESTATE ATTITUDE SHIFTS
Any way you cut it, real estate makes up a huge chunk of the overall economy. One consequence of that is that the health of the real estate industry is constantly being put under a microscope (if it were a human patient, it would probably grow alarmed by all the doctors and specialists constantly calling it in for routine check-ups). Everyone from Washington regulators to Las Vegas tradespeople looks to the performance of residential real estate as one of the most meaningful indicators of how everything else is doing. Las Vegas, it’s not surprising that the pace of real estate sales in Las Vegas always seems to align with many other Las Vegas business prospects as a whole. Probably because that’s true in most places, the National Association of REALTORS® has come up with a new way to poke and prod the patient. It’s called the “HOME Survey”— ‘HOME’ being an acronym for “Housing Opportunities and Market Experience.” This is a somewhat strained way to describe the purpose, which is to find out how typical consumers feel about residential real estate in general, and homeownership in particular. Instead of being another dry collection of statistics, this survey could turn out to be a lot more revealing than many others because it is going to be measured every month from now on—then reported every quarter. Even though it will be conducted nationally, I’m guessing that Las Vegas real estate trends could well turn up here, since it is the changes in attitude that will become apparent. Anyway, the first survey results are in—so we have a baseline we can use for comparison. These first findings reveal some very positive findings. Among them: • Percentage of renters who want to become homeowners: 83% • Percentage of households believing homeownership is a good financial decision: 88% • Percentage of households who believe owning a home is part of their own American Dream 87% Since ‘The American Dream’ is such a generalized term, the survey attempts to nail down which features of owning a home are the most appealing. The three leaders are, “A place to raise a family” (36%); “Owning a place of your own” (26%); and “A nest egg for retirement” (14%). It should be interesting for Las Vegas real estate watchers to compare future findings with that baseline—and to see if Las Vegas attitudes reflect the same kind of shifts. In any case, if your own feelings about home ownership match those findings, you can easily begin your own made-to-order version of a Las Vegas “Housing Opportunities and Market Experience.” Just call me!
LAS VEGAS HOME PRICES AFFECTED BY RENOVATION DECISIONS
Here’s an instant spot quiz— (see what comes to mind within a second or two): If you decide to sell your Las Vegas home if you had a crystal ball, what’s the most important detail about the sale result? Quick! Answer! If you’re like seven out of ten people, you were curious about the bottom line: “what price did it sell for?” Some people come up with “how long did it take?”—but usually, that’s the second or third choice (“what were the buyers like?” is another contender). It’s hardly surprising that the closer they get to putting their own house up for sale, home prices are foremost in people’s minds. Yet most homeowners assume that the ultimate sale price will be determined by market forces outside their control. That’s sort of true, but not entirely so. Home prices aren’t set in stone. Homeowners do have a degree of control over what their property will bring—if they choose to exercise it. One key to seizing that control is the smart application of remodeling dollars to Las Vegas that pay off. For Las Vegas homeowners who plan to continue living in their homes for the foreseeable future, it’s less of an issue. They can be comfortable putting their remodeling project dollars in the directions that make the home more comfortable and agreeable to their own family lifestyles. They can safely follow their own priorities without worrying too much about where current tastes and trends are heading unless you are someone who just enjoys being counted in the fashion vanguard. But if you’re fairly certain that you will list your Las Vegas home sometime soon, you should remember that a property’s salability can be greatly affected by the remodeling direction that’s taken. Rather than making those decisions guided solely by your personal preferences, it makes good sense to take into account what buyers consider valuable, if for no other reason than the likelihood that those dollars will come back! There are three Las Vegas that deserve consideration: Kitchens always seem to get the most attention when it comes to boosting home prices. A homeowner may prefer a warm, comfortingly cozy space for the center of family activity that the kitchen usually becomes—but many prospective buyers go the other way. Light and bright is vastly preferred over cramped and dark for buyers who are comparing kitchens—and the resulting home prices offered usually reflect it. If your property will be among the Las Vegas listings anytime soon, think about directing some remodeling energy there. The master bedroom is growing in importance, too. Many buyers who in earlier eras may have valued a formal dining room, now forego it altogether—preferring an attractive master as a sanctuary from the stresses of the outside world. Living rooms can also add to the bottom line a home winds up fetching. An open, bright multi-purpose Las Vegas that’s easily envisioned as a center for family entertainment and social gatherings can give a strong boost to perceived value. Simple renovation ideas like removing dated window coverings or replacing worn carpet can be dollars well spent. If selling is anywhere on your horizon, it won’t be long before keeping tabs on trends in Las Vegas home prices becomes a new personal priority. Whether early-on or last-minute, calling me for a no-obligation consultation can make a big difference for maximizing your sale’s result!
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