Are we starting to see signs of recovery in the local Las Vegas housing market?
The Greater Las Vegas Association of Realtors (GLVAR) released its local housing statistics for December 2009 with some interesting findings for the year. To read the full report, download this PDF file: GLVAR_December2009_Housing Report (released 1-8-10)
According to GLVAR, sales of existing homes in Las Vegas were up 64% in 2009. GLVAR reported 46,879 local housing sales in 2009. That represents a huge spike from 28,618 total sales in 2008 and trails only the 71,963 homes sold during the record year of 2004. The increasing sales continue to be driven by low prices. GLVAR reports that the average single family home sold in the area in December 2008 was $204,000 in December 2008. By December of 2009, that number had fallen to $165,000.
December, 2009 saw a 9% increase in sales compared to November. 4,196 housing units sold in December alone compared to 3,843 sales in November.
One statistic that particularly stands out the in the report is that 67 percent of all current pending sales in Las Vegas are short sales – 8,935 out of 13,406.
Other recent press on the Las Vegas Real Estate Market:
Las Vegas Real Estate Posts 2009 Positives Despite Recession (1-11-10/ DSNews.com)
Las Vegas Home Sales Improve in 2009 (1-8-10 /LasVegasNow.com)
December 2009 Las Vegas Market & Short Sale Report
By · CommentsThis Market Condition Report is courtesy of Nevada Title Company:
Overall Months Supply is 2.8 and rising at a very slow rate. The market continues “tight” overall with most of the supply/demand constriction centered in REO with 59% of demand and only 20% of supply. The percentage of the market taken by REO is declining at an average rate of about 1.8% per month. Overall, supply remains unchanged while demand declined slightly.
Prices, which were holding steady, have resumed their decline. Expect closings to remain rather steady in the current range. As far as overall prices are concerned, continued weakness is the most likely outcome. In all categories (REO, Short and Standard), current pending price is less than current closing price signaling impending price declines in the near term. The reader should take note that current Months Supply is tight, thus it is reasonable to expect rising prices. The current negative trend in price, which is running counter to supply/demand, is likely due to conservative standards applied by appraisers versus current market realities.
As a note, 34% of all closings are cash, suggesting a high level of investor participation in the current market.
Short Sale supply exceeds Short Sale demand by a factor of 6.8 (see Months Supply). Months Supply is declining in very small stepson a monthly basis. Market Speed is slow and Percent Selling depressed, while escrow inventory remains at high levels. Observe that CDOM is elevated when compared to REO/Standard. These factors continue to support anecdotal reports of an inefficient closing process. Short Sale prices are currently steady, however, future price declines are expected (see Median In Escrow Price).
On November 30, 2009, the Treasury Department released guidelines and forms for its new Home Affordable Foreclosure Alternatives Program (HAFA). HAFA is part of the Home Affordable Modification Program (HAMP).
Let’s discuss some of the key points outlined in these new guidelines and try to clear up misconceptions:
- Not all Loan Servicers have to follow these guidelines! In fact, it applies only to Servicers who have signed agreements to participate in HAMP are also required to comply with HAFA. A list of servicers participating in HAMP is available at MakingHomeAffordable.gov.
- HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which will issue their own versions of HAFA in coming weeks.
- Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home. Visit MakingHomeAffordable.gov to find out if you may be eligible for a HAMP loan modification. Basic eligibility criteria:
- The property is the borrower’s principal residence
- The mortgage loan is a first lien mortgage originated on of before January 1, 2009
- The mortgage is delinquent or default is reasonably foreseeable
- The current unpaid principal balance is equal to or less than $729,750
- The borrower’s total monthly mortgage payment (principle, interest, taxes, insurance and HOA fee) exceeds 31 percent of the borrower’s gross income
- Uses borrower financial and hardship information already collected in connection with consideration of a loan modification.
- Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds). Hopefully this will speed up the lengthy process everyone has been experiencing for final short sale approval.
- Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed). This would be some of the best news for Nevada Homeowners!
- Uses standard processes, documents, and timeframes/deadlines. We have not seen the forms / standards as of yet…
- Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to $1,000 for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders (on a one-for-three matching basis).
- The program does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program sunsets on December 31, 2012. To read the entire Supplemental Directive 09-09 – Introduction to Home Affordable Foreclsoure Alternatives
Are you a Las Vegas Homeowner facing a possible foreclosure or considering a short sale?
The Serra Group is here for your confidential, no obligation consultation
regarding your options – there are solutions! Call Kathryn at 702-348-7191.
What is a Short Sale?
- A Short Sale is when the home sold for less than the debt against the property and the lender(s) agree to accept a discounted payoff. The lender agrees to accept less than what is actually owed on the mortgage.
- A Foreclosure is when the lender seizes the home that the loan is secured by through the foreclosure process, which is notice of acceleration of note, notice of default, notice of sale, and then actual forced sale of the home known as a ‘trustee sale.’
What are the tax consequences?
- Short Sale & Foreclosure….all debt forgiven results in 1099C debt. Whether it is a primary or rental property makes a difference as to how much tax you may pay. Simply stated, if you get released from debt the IRS sees that as income to you, just like you got a pay check. See this publication from the IRS http://www.irs.gov/pub/irs-pdf/p4681.pdf on “Canceled Debts Foreclosures Repossessions and Abandonments.”
- You may qualify for an exemption under the Mortgage Forgiveness Debt Relief Act – visit this IRS article for more information: http://www.irs.gov/individuals/article/0,,id=179414,00.html
What are the Credit Issues?
- Foreclosures and Short Sales will appear on your credit history and affect you for up to 10 years. This may affect a.) employment or b.) security clearance, etc. Rumor is that a short sale is better than foreclosure for these items? There is no evidence to back this up. Arguments on both sides are out there. We do know that there is a specific spot on the credit reports for foreclosure, whereas short sales are reported differently. We have also seen examples of the credit score being impacted based on the total number of missed payments.
What is the liability for the Debt AFTER the foreclosure or short sale?
6 Months
- Foreclosure – The foreclosing lender has the right to sue the home owner after the foreclosure for the difference between the amount gained at the ‘trustee sale’ discussed above and the balance of debt owed. The lender has only 180 days (six months) from trustee sale to file, after that the owner is no longer liable.
6 Years
- Foreclosure 2nd Deeds – All deeds that are junior to the foreclosing lender have different rights than the foreclosing bank. These lenders are called ‘sold off junior lien holders’ and they have six (6) years to recoup their debt. That means you get foreclosed on November 12, 2009, these junior lien holders have until November 12, 2015 to sue you.
- Short Sale – All lenders that agree to a discounted payoff and ‘release the lien’ from the property to allow the short sale are no longer ‘secured lenders’ and are now ‘sold off junior lien holders’ as described above and have six (6) years to sue you. UNLESS, the short sale is negotiated so the lender releases the homeowner from any future liability as to the forgiven debt. Many lenders are taking a hard stance on this issue and NOT fully releasing and satisfying the forgiven debt.
Each short sale has it’s unique considerations and situation. That is why it is so critical for homeowners to work with an experienced and knowledgeable short sale real estate professional.
Are you a Las Vegas Homeowner facing a possible foreclosure or considering a short sale?
Darren Welsh, corporate attorney for Prudential Americana Group Realtors, recently posted on his Nevada Residential Real Property Law blog advice on the specific language regarding release and full satisfaction of the forgiven debt in a short sale. The Serra Group is experienced in the listing and successful closing of short sales. We strive to negotiate a full release and forgiveness of debt on your behalf and advise consulting with a qualified attorney if necessary. We also structure the purchase agreement in such away that you will have the opportunity to weigh your options and should a full release and satisfaction not be possible, to allow you to cancel the sale without further recourse from the buyer.
Here is a re-posting of Attorney Welsh’s blog regarding release language in a short sale:
Advise the seller to seek legal counsel. Nevada is a deficiency judgment state, which means a seller can be sued after they have been foreclosed upon. A second can pursue a foreclosed owner for six years. By performing a short sale, instead of foreclosure, the one-action rule and the deficiency protections are no longer applicable. The Seller in a short sale will have a tax consequence. Sellers in a short sale may also be sued by the lender for breach of non payment of a contractual obligation. The statute of limitations in Nevada for breach of contract is six (6) years.
The following are some examples of language used by the lenders to deal with debt. Some are good, some not so good, some BAD.
Example 1 – Not GOOD
In this one, the lender states, “may pursue a deficiency…” The seller may be sued for up to six (6) years.
BAC Home Loans Servicing, LP and/or its investors may pursue a deficiency judgment for the difference in the payment received and the total balance due, unless agreed otherwise or prohibited by law, if the short sale closes on the loan referenced above. In addition, if this loan is covered by mortgage insurance, the mortgage insurance company may reserve the right to pursue the seller for the deiciency based on the terms of the mortgage insurance policy.
Example 2 – GOOD
In this one, the lender states, “settle your account…”
This letter is to inform you that Chase Home Finance LLC has agreed to your request for a Short Sale, and will accept a minimum of $$$$$ to settle your account and release the lien(s) on the above-referenced Property.
Example 3 – GOOD
In this one, the lender states, “will be charged off and no additional payment will be required…”
Our Customer(s) agrees that upon the posting of the agreed upon Short Sale amount, the remaining loan balance, if any, will be charged off and no additional payment will be required. Please note a $0.00 balance will appear on the Customer’s file with the credit bureau as “Account legally paid in full for less than the full balance.”
Example 4 – GOOD
In this one, the lender states, “full and final satisfaction on the first mortgage …”
This letter will confirm our acceptance of the short payoff on the above referenced property. We agree to accept the proceeds generated by the $$$$ “as is condition” purchase as full and final satisfaction on the first mortgage indebtedness on the above referenced property.
Are you a Las Vegas Homeowner facing a possible foreclosure or considering a short sale?
This is the latest Las Vegas Real Estate Market Report from www.NARREIA.com (National Association of Residential Real Estate Investment Advisors). For the week of December 2, 2009, data is obtained from the Greater Las Vegas Association of Realtors MLS.
Single Family Residence (SFR)
- Available – 8,478 (-110 , Last Week 8,588)
- Under Contract – 11,436 (-223 , Last Week 11,659)
- Days of Supply – 22 (+0 , Last Week 22)
- Short Sales – 10,704 (+8 , Last Week 10,696)
Condominiums and Town Homes (CONDO/TH)
- Available – 1,943 (-19 , Last Week 1,962)
- Under Contract – 2,702 (-89 , Last Week 2,791)
- Days of Supply – 22 (+1 , Last Week 21)
- Short Sales – 2,645 (-19 , Last Week 2,664)
Combined SFR + CONDO/TH
- Available – 10,421 (-129 , Last Week 10,550)
- Under Contract – 14,138 (-312 , Last Week 14,450)
- Days of Supply – 22 (+0 , Last Week 22)
- Short Sales – 13,349 (-11 , Last Week 13,360)
Here is the latest Las Vegas Real Estate Market Report from www.NARREIA.com (National Association of Residential Real Estate Investment Advisors). For the week of November 18, 2009, data is obtained from the Greater Las Vegas Association of Realtors MLS.
Single Family Residence (SFR)
Available – 8,470 (+143 , Last Week 8,327)
Under Contract – 11,812 (+12 , Last Week 11,800)
Days of Supply – 22 (+1 , Last Week 21)
Short Sales – 10,649 (+117 , Last Week 10,532)
Condominiums and Town Homes (CONDO/TH)
Available – 1,970 (-4 , Last Week 1,974)
Under Contract – 2,790 (-16 , Last Week 2,806)
Days of Supply – 21 (+0 , Last Week 21)
Short Sales – 2,643 (+2 , Last Week 2,641)
Combined SFR + CONDO/TH
Available – 10,440 (+139 , Last Week 10,301)
Under Contract – 14,602 (-4 , Last Week 14,606)
Days of Supply – 21 (+0 , Last Week 21)
Short Sales – 13,292 (+119 , Last Week 13,173)
No Fault Short Sales
By · Comments
…a common phrase which comes up in conversation when consulting with our short sale clients. For several months more and more homeowners have come forward gasping for information about short sales…and NOT because they lost their job or their mortgage rate adjusted higher. While there are still so many challenged with such financial dilemmas, the face of short sellers is truly evolving…increasingly the only dilemma for some is that their home value may NEVER recover during the time they own it. They are tied to a non-performing, money-sucking asset. They want to know how this happened to them and what they should do.
THE HOW…
“Supply Creates Its Own Demand”
For years the Las Vegas real estate market had a steady appreciation rate. Chatter could be heard among those in the industry speculating that as land became more scarce, property values would increase at a more rapid pace…a classic case of supply and demand. This environment paused briefly after September 11th because such a national tragedy created a sense of hesitation in making large decisions and buying a home was no exception. Then…slowly at first…in late 2002 and 2003 buyers returned in higher numbers, but our housing supply didn’t keep up. Suddenly, January 2004 hit and buyer demand exploded while the housing supply was simply anemic. The perfect storm of a seller’s market occurred and some Las Vegas zip codes values shot up by 50% by June 2004. The measurable peak for most areas didn’t occur until sometime in 2005 or 2006. For an extended instant, it seemed as if everyone who bought anytime before early 2004 was financially set with massive growth in their home equity. As for so many who bought after 2004, well, Las Vegas was becoming (and some would say actually is) an eastern suburb of Los Angeles and the higher prices were both justified and sustainable.
Risks and Rewards
In that long moment of perceived prosperity, who complained? Did you? Were you a homeowner who cashed in some equity to buy a car or another home or a pool? Did you prudently choose to not touch your loan or only refinance into a lower interest rate with no cash out? Remember, the “free market” – the capitalist system that allows individuals to freely seek a credit card, a car loan, or a home loan – is a system where participation is voluntarily and based on choice. When you buy a home, you buy into this system, and when the system helps increase your home value, you accept the reward freely, don’t you?
The Market Giveth and the Market Taketh
In late 2006/early 2007 the Las 
Vegas real estate market stalled, then with each surprise revelation of the lending and financial systems, the market dropped. With each adjustable rate mortgage adjusting higher, increasing numbers of homeowners could not refinance because their home values dropped below their loan amounts. Eventually foreclosures came on like a torrent and some home values appeared to measurably decrease in only 90 days by as much as 20%. Suddenly, the housing supply exploded and buyers tippy-toed under cover…they didn’t want to be exposed to the uncertain mess that seemed to pervade our economy. When this first wave of homeowners lost their homes – and the machinations of some “too big to fail” institutions did just that…failed – the system that all other homeowners bought into erased the equity and home values they took for granted. The risk was exposed. Who’s fault was it? While that has been, and will continue to be, a source of study and debate, homeowners still look at us and say, “It’s not my fault…I have a good job…good credit…I pay all my bills…I have a great loan…I bought my home before the huge rise in prices…why do I have to pay for other people’s bad loans and bad decisions?” In the most direct way, fault has little to do with it. Remember, the markets giveth and the markets taketh. Once you buy into the market – into our “free market” financial system – you are by nature a participant. The rewards are easy to accept, and the risks, a potential outcome few are guaranteed to avoid.
THE ACTION…
The bottom line – currently in Las Vegas home values have decreased to levels not seen since the 1990’s, and in some areas, arguably since the 1980’s. As a result, most Las Vegas homeowners have no equity in their home or are upside down. If you need or want to get rid of your home, regardless of your motivation or financial situation, you must first determine your current home value. Referencing the taxable value from the Clark County Assessor’s Office give a clue as well as online resources such as Zillow. Your best reality check, however, will always be a market analysis created by a REALTOR®…from someone who lives and breathes the local real estate market full-time. If your REALTOR® confirms that you are upside down, then you need to work with them, your accountant, and an attorney or qualified advisor to determine your best course of action. Ultimately, you are looking for the best of the worst options – short sale, foreclosure, and/or bankruptcy. Get used to associating these words and concepts in the scope of your life and your reality. The sooner you understand which option be applies to you, the more proactive you become, the better off you will be in moving forward towards your future.
Are you considering a short sale? Do you want to know how much your home is worth? Contact Stephanie at 497-7705 or stephanie@realtyaccess.net to proactively investigate options for your future.
The recent extension and modification of the home buyer tax credit is good news for sellers in Las Vegas and should continue to spur sales in our market.
The National Association of Realtors economists estimate that the current first-time buyer tax credit has contributed about $22 billion to the national economy, and about 2 million people will take advantage of the tax credit this year.
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:
- Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
- Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.
Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream.
Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.
For the first time, long-time homeowners who buy a replacement principal residence may also claim a homebuyer credit of up to $6,500 (up to $3,250 for a married individual filing separately). They must have lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased.
People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after Nov. 6, 2009. The new legislation increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the level in existing law. The credit phases out for individual taxpayers with modified adjusted gross income (MAGI) between $125,000 and $145,000 or between $225,000 and $245,000 for joint filers.
For the first time, the new legislation makes buyers who already own a home eligible for a credit. A $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years. The legislation limits eligibility for the existing homeowner credit to homes worth $800,000 or less.
The legislation takes effect December 1 and is not retroactive. Both credits are available only for primary residences, not second homes or investment properties.
Read more …
This is the latest Las Vegas Real Estate Market Report from www.NARREIA.com (National Association of Residential Real Estate Investment Advisors). For the week of November 4, 2009, data is obtained from the Greater Las Vegas Association of Realtors MLS.
Single Family Residence (SFR)
Available – 8,233 (-5 , Last Week 8,238)
Under Contract – 11,749 (-299 , Last Week 12,048)
Days of Supply – 21 (+0 , Last Week 21)
Short Sales – 10,444 (-20 , Last Week 10,464)
Condominiums and Town Homes (CONDO/TH)
Available – 1,996 (-98 , Last Week 2,094)
Under Contract – 2,757 (-95 , Last Week 2,852)
Days of Supply – 22 (+0 , Last Week 22)
Short Sales – 2,615 (-89 , Last Week 2,704)
Combined SFR + CONDO/TH
Available – 10,229 (-103 , Last Week 10,332)
Under Contract – 14,506 (-394 , Last Week 14,900)
Days of Supply – 21 (+0 , Last Week 21)
Short Sales – 13,059 (-109 , Last Week 13,168)
