Current Home Lending Info Blog for Southern Nevada

According to Home Builders Research, Inc. and the research done by Home Loans of Nevada, The Schwartz Group, The Greater Las Vegas Area is seeing fantastic increases in sales.

In the month of February, there were 2,606 Recorded Sales alone.  This does not include the additional 375 New Homes that were sold in February as well.  The resales in Las Vegas, Henderson, N. Las Vegas, and the other surrounding areas of Southern Nevada have had 5,142 recorded resales for just January and February alone!  This is a year to year increase of 70%, or an additional 2,125 homes in just the first two months!

While median home sales continue to stay low at $145,000, this is obviously creating a flood of home purchase transactions.  Another interesting fact of the first quarter is that, while the number of sales has risen so dramatically, the number of homes on the market has stayed relatively consistent even with the increase in sales.  The main reason for this, by looking at all of the facts, has to do with the fact that Henderson, NV and Las Vegas, NV are still seeing a large increase of new residents moving to the valley.  According to the research I did with Realtor.com, Las Vegas and Henderson are the number one and number two most searched cities in the United States, month after month. 

Looking at the statistics provided by MLS, Multiple Listing Service, which is a Greater Las Vegas Association of Realtors Service, shows that Foreclosed homes also known as REO or repo homes that are owned by the lenders account for almost 80 percent of the exisiting home sales.  However, with almost 5,000 homes currently listed, foreclosed homes only represent 39 Percent of the homes on the market.  This fact is not surprising to those that watch the market and are in the industry.  As a lender myself, I notice that most buyers who are coming to the market are statistically First Time Home Buyers and are looking for a "Good Deal," so there first choice is to see the homes that are either foreclosed or are available for sale via Short Sale.

For those that don't know, Short Sales are homes that are placed on the market by the individual owners of the home, but require final approval by their lender because they are working with the home buyers to sell the properties at a price lower than what the actual loan payoff is.  With 39% of the homes on the market being foreclosures, another 30% of the listings are short sales, but they account for a much lower percentage of actual sales at 9%.  I believe the primary reason for this is due to the fact that short sales do take much longer to get contracts approved by the lenders due to the number of foreclosures and short sales that each bank currently is handling.  Short sales typically go to a negotiator after they had a contract requested for purchase, and the seller has signed off on the purchase.  Depending on the lending institution, the negotiator could take 2 weeks, or it could take 3 months.

This just goes to show that now is the time to work with realtors that are specializing in the REO and Foreclosure Market, as they can stay on top of these transactions with a much better success rate due to the knowledge that they have and are continously receiving.  The same holds true with dealing with a lender who can act quickly, efficiently, and provide great service to both the real estate agent, the buyer, and the lender who is selling the home.

Look for my next blog tomorrow, where I will discuss the lending industry, and the drastic change in the number of real estate professionals and how that can help real estate agents, buyers, sellers, and banks.

Happy House Hunting!  Please subscribe to my blog so you may keep up with the constant updates we are adding daily!

David J. Schwartz, Mortage Planner

While this may be a statement that many people have felt for many years, there is a new reason as to why this statement is true.  In the Vegas Valley, the listings that are currently being presented by banks who are holding nearly 45% of the market share of listings, have come down in value by almost an average of 40% which has made it very affordable for the renters who have sat on the sideline during the real estate craze of the past couple years to enter the market.

This decrease in over-inflated value has made it available for renters of apartments and homes to purchase homes that are larger, nicer, and cheaper than there current living situation.  For very little down, they are able to buy homes for anywhere between $100 and $500 cheaper per month (including taxes, insurance, and Homeowners Association Fees) than their currental rental position.

This realization has been backed up by the number of sales that are currently taking place all over Southern Nevada, including Henderson.  In just the Southern Nevada area, February saw over 3,000 homes close escrow with only 2,800 active licensed mortgage brokers.  There are currently 10,000 homes in escrow right now which proves that, not only are the number of homes being purchased going up even from a month ago, with the current timeline of purchases statistically taking 45-60 days, we will soon be looking at increasing the number of sales month over month by almost 100%.

While many potential homeowners have tried to time the end of the decrease in home values so that they may purchase homes without losing equity the month after they purchase it, we have finally reached that time period where they may now purchase homes for less than what they can rent for.  Once this dynamic happens, the homes will quickly move from the market.  When this happened in Palm Springs last year, it took only a matter of six months for them to have such a hgih demand for the large listings of homes, that they quickly had multiple offers being placed on each home that entered the market, causing an increase of home values and causing a correction of the market.

Las Vegas and Henderson will soon be in the same position.  Now is the time to take advantage of this opportunity, both as a occupant of these homes, as well as an investor of these properties. 

Though the above comment might be a little harsh it, in one form or another, is something I have run across my clients asking me, or me forcing out of them because it was on their mind, time and time again.

If you are a first time homebuyer, please keep reading, this is a must for you. If not, I would suggest you still continue so that investors, second home and vacation home buyers, and people whom are moving up from a starter home to a larger home can hear this valuable information about taxes and insurance, and the best way to implement them into your life. Some of this may be new to you, or parts of this may have never been explained properly by the previous loan officer who did your loan...So here we go...

Whenever you purchase a home, even if you buy it with cash all up front, you will still have AT LEAST two bills that you must pay every year on your home. You will always have Property Taxes, and you will always have Homeowner's Insurance. Now, if you live in a condo or a townhome, the homeowner's insurance may be included in your Homeowner's Association Dues since you have adjoining walls with other homeowners. Due to the adjoining walls, Condo and townhome developers want to make sure that if you or your neighbor have any problems with leaks, fires, or other hazards, that it will be included in what they call a "blanket policy" which will protect each homeowner that is connected to your home. So, if you have a homeowner's association fee that includes the hazard insurance as part of its requirements, you will also have the taxes as well, which will give you the two bills for your home.  But, let's get back to Taxes.

In the state of Nevada, you have property taxes if you own any property anywhere in Clark County (of course they have taxes in all counties, we are just using Clark County for our own Demonstration). The Assessor's Office of Clark County in Nevada is the one who we are most concerned with here. This will cover most of your major areas including Henderson, Las Vegas, N. Las Vegas and Summerlin as well. The Assessor's Office has a responsibility each year to reassess each home in Clark County, and try to give it a fair value based on what they determine the value of your property is based on the size of the land plus the value of the size and age of the home.

There is no getting around this fact. The state WILL make sure they get paid...They have always been good at that ! haha... Now, the other bill that you will get each month, which I briefly touched on earlier, is you homeowner's insurance policy. This is also a mandatory bill, unless you are in a situation where you own the home free and clear and you are not under the rules of a Homeowner's association where they state that you must carry hazard insurance at all times or it may result in a fine. This is one of those bills that, even if you were in that situation where it is not required of you to have, it is definitely worth it to ALWAYS keep it active and paid on time. This is the only bill that you will pay that will make sure in the event anything happens to your home, the insurance company will come in and resolve the issues.  From small flood, to complete rebuild, that is what you pay your homeowner's insurance for, and they do what they can to fix any problems that fall in their jurisdiction.

So, now that we have established that these are two bills that you will pay for the rest of your life, let's talk about the options of payment that come along with them. First, if your home is paid off, You will most likely pay one check for each quarter that your taxes are due.  In Clark  County, the fiscal year for tax payments begins in August.  Typically the tax payments are broken up into four equal payments, with the subsequent three other tax payments being sent on October 1st, January 1st, and March 1st and then starts all over again in August.  The insurance yearly dues are required on the anniversary of the purchase date of your home.  Some people choose to make these payments on their own, instead of having the mortgage company make the payments for you.

If you have the mortgage company make the payments for you, you definitely get to enjoy some of the perks that come along with that.   First, instead of having to make three months worth of tax payments each quarter and remember to save up a years worth of hazard insurance every year, your mortgage companies split up the cost of your taxes and your Hazard Insurance into a monthly cost that gets added to your normal mortgage payment over a 12 month period, and they take the portion of the taxes and insurance cost, and they put that into a separate bank account for you along with other borrowers taxes and insurance payments that they make, and they make sure that your tax payments and your insurance payments get made on time so you do not have to worry about mailing the payments out or having enough money to cover the costs.

Now, while this does seem like such a great service that banks decide to give you, in most cases it is mandatory that you do this.  In fact, if it is not mandatory you will typically get a .25% hit to your interest rate if you do not let them do this.  The reason for this is because you are making payments each month to build up to what you need to pay off your taxes and insurance each year.  Although they collect on a monthly basis, they only pay the county and your insurance agent every quarter or every year.  By putting your money into a separate account where they gain interest on your money, and add the thousand of other borrowers who are also doing the same thing, the mortgage companies make quite a bit of money off of making your life easier by paying your bill for you.

I advise most people to go ahead and have the bank collect your monthly portion of your taxes and insurance because when you break down the numbers in the long run, you really do not save much by paying these items yourself if you are responsible.  The only way it makes sense is if you have a number of loans that you are collecting on, like the actual banks that hold your loans.

So, in short, have you mortgage company "escrow" your taxes and insurance.  It is two less bills that you have to worry about, and  you will typically get a price cut in your interest rate.

HAPPY HOUSE HUNTING!!!

Best Regards,

David J. Schwartz
Mortgage Planner/ Sales Manager
702.370.2116
David@HomeLoansOfNevada.Com

As everyone knows, the days of the "have a heartbeat, get a loan" days are over.  However, there is a great way for people who have purchased a home recently to revisit these days, in a way.

Whenever you do an FHA Loan to purchase a home or refinance a home, you are given the option to refinance that loan, usually three to six months after purchasing the home, under a program that is called the FHA Streamline Program.  It follows many of the government guidelines that FHA requires, but the main difference is that if you have done an FHA loan in the first place, you no longer have to have a new appraisal, show current paystubs, show tax returns or W-2's, or even provide a bank statement for that matter.

While there were many people who took advantage of this program that their original loan officers had told them about in January of this year, there are many people who did not have the chance to refinance at that time.  It caused a huge back up of the underwriting turn times for the lenders, and set purchases and refinances back by two to three weeks by the time it took with all of these new loans being put into the lenders pipeline.

The reason I bring this up now is because of all of the refinances that took place in the market, the lenders raised rates to stop the FHA Streamline Refi's from coming in because they did not have the money to close.  Now, with Obama's New Stimulus Plan, he has mentioned that the treasury will be placing an additional $750 Billion into Mortgage Backed Securities, which although many people believe this to be the 10 Year Note, in fact it is actually focused on the government bond programs that are available.

This recent news has caused the rates to become even lower than when the Streamline Refinances were on such a hot streak.  Rates can now be seen at 4.75% for a 30 year fixed rate with no prepayment penalties.  To discuss any homes that you have that you would like to put into the FHA Streamline Program in the Henderson, Las Vegas, North Las Vegas, Summerlin, and Boulder Ciry, Nevada area email us at David@HomeLoansOfNevada.com, or call us today at 702-370-2116.  Have a great week!

Dave J. Schwartz