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Archive for November, 2009

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)

Categories : Las Vegas Market
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Nov
18

No Fault Short Sales

Posted by: LasVegasShortSales | Comments (1)

Its Not My Fault…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 choiceWhen 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 Changing Face-MarketsVegas 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 downIf 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.

Comments (1)

taxcreditThe 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 …

The Basics: Extended Home Buyer Tax Credit 2009/2010 (NAR)

First-Time Homebuyer Credit (IRS.gov)

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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)

Categories : Las Vegas Market
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Several recent news articles and resources are pointing to some positive steps towards streamlining the short sale process in an effort to expedite what has been a lengthy and exasperating process for all parties involved.  Numerous sources are reporting that Bank of America has invested in and launched, Equator, an electronic platform, formally known as REOTRANS.

By adopting Equator, the lender is now accessible 24/7 via a borrower portal, the company says. Borrowers (and real estate agents) can provide information and offers electronically and receive real-time status updates through the portal. The system also automates decisions, handles approvals, provides fulfillment and assures full compliance with government programs, according to Equator CEO Chris Saitta.  Sources: MortgageOrb, San Francisco Chronicle

Here is an excerpt form the SF Chronicle article, October 21, 2009.  Read the full story: Fewer Short Sales are Coming Up Short

But now real estate professionals and banks say the logjam is starting to ease, with decisions coming more quickly, more short sales trading hands, and the prospect of a new Treasury plan that will further lubricate the process.

Several developments are helping to expedite the sales:

Pre-approval. Some banks are proactively deciding what amount they will accept for a short sale house. Sometimes they reveal the amount; sometimes they don’t, but either way it expedites the process. Homes with this arrangement are listed as “Lender pre-approved short sale.”

“It’s an internal reserve price that lets us know the floor we’ll accept on a short sale,” said Dave Sunlin, senior vice president for foreclosures and real estate at Bank of America, which doesn’t reveal the price for competitive reasons.

At Wells Fargo, Ben Windust, senior vice president of default operations, said the bank is testing various short-sale approaches, including pre-approved sale amounts that it does reveal. That pilot is only for homes that Wells owns in its portfolio; homes owned by investors require more complex decision-making.

Proactive discussion with homeowners. Windust said another Wells pilot is to monitor real estate listings. “If we see we have a (Wells Fargo) borrower who listed property, if it’s underwater, we might proactively reach out to them to work with us now on a short sale.”

Similarly, JPMorgan Chase spokesman Gary Kishner said, “We are working on a more proactive approach to short sales by obtaining a listing of our delinquent borrowers who have their property listed for sale and then reaching out to help them sell the property.”

Wells, Chase and other banks said it benefits homeowners to let their banks know early on that they want to pursue a short sale so the home’s value, paperwork stream and other factors can be determined.

Treasury plan. In May the Treasury Department said it would offer a streamlined framework for short sales and incentive payments of $1,500 to homeowners, $1,000 to loan servicers and $1,000 to second-lien holders. That plan is supposed to be implemented very soon.

“As we understand it, it allows lenders to work with borrowers to mutually agree on how to market the property, set the price for it, gives us a fixed amount of time to sell the property and if not, converts it into a deed in lieu of foreclosure,” said BofA’s Sunlin.

Technology and staffing. BofA said it recently adopted a Web platform called Equator (formerly REOTrans) for managing short sales, as well as bulking up its short-sale staff.

But despite the progress, many short sales are still exasperating.

Categories : Short Sale Tips
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