Freddie Mac rolled out this week it’s outlook for the U.S. Economy for 2012.  Freddie Mac is predicting that our economy will grow by 2.5% during the upcoming year, and that the already record low Interest Rates will continue to stay at record low levels.

Freddie Mac is also predicting that the activity in Housing will increase, but it just at a modest rate.  According to Frank Nothaft , Chief Economist for Freddie Mac  “While the headwinds remain strong going into 2012, there are indications the economy and the housing market are gaining ground, albeit slowly,”  

It looks like we are likely to close off 2011 with rates at about 4% with no points on a 30-year fixed-rate mortgage.  It would be unheard of, but is it possible for Interest Rates to drop below 4%?

Nothaft also feels that the recent changes to the Home Affordable Refinance Program will increase refinance by more than $100 billion in refinanced loans.  Here I am prone to disagree with Mr. Nothaft for the simple reason that many people do not have much equity in their homes, and in several cases homeowners are underwater when it comes to the present value of their homes.  We will have to wait and see if the Home Affordable Refinancing Program will have an impact, but even if it does $100 billion is a very optimistic figure. 

Last of all the Rental Market is predicted to continue to grow as Buyers continue to be very cautious, because of job security, and feeling that prices and Interest Rates will continue to go down.

Hopefully some of these predictions will come true, and 2012 starts to turn things around in the Real Estate Industry.

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Who To Call For Your Mortgage Needs In Connecticut:

George Souto NMLS# 65149 is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308  gsouto@mccuemortgage.com, or visit my McCue Mortgage Homepage.

Condos for Sale in Las Vegas Present Financing Challenges

Take a peek at prices of condos for sale in Las Vegas.  It is no wonder not a week goes by the last several years that I get multiple inquiries from buyers who see $20K, $30K, $40K condos for sale in Las Vegas online.  These buyers are first time buyers, owner occupied buyers, investor buyers, second home buyers, vacation home buyers etc.

A very large percentage of these potential Las Vegas condo buyers also want to leverage these incredible bargains via financing.  This is a problem here in our valley.  It doesn’t matter what your credit score or income is.  It doesn’t matter if these buyers are highly qualified to purchase a $500K condo home and only want to spend $40K.  What matters to the lender or underwriter is the condominium certification.

There are several items in that condominium certification that could upset the apple cart and blow up financing on a condominium home sale.

The lender is looking for certain things in the Condo Certification that will determine if they will lend money on that specific condo property:

• Lenders want to see low investor concentration (rentals)
• Low HOA delinquencies
• No construction defect or other litigation against HOA or community

Of course there are ways to work around this such as through private money financing or Fannie Mae HomePath® financing.  Of course not every buyer or condo fits the underwriting mold for those either.

The moral of the story is if you are eyeballing a condo for sale in Las Vegas, you may want to make sure the cash is in the bank.

Click Here to See the Newest>>>> Condos for Sale in Las Vegas

Las Vegas Area Real Estate Median Price Trends 2002-2010

I found it rather interesting to pull these Las Vegas residential resale home sale statistics & trends from 2002-2010.  Obviously we are sub year 2002 pricing – which is the earliest I could go!  I have actually seen some areas (mostly in the east part of the valley) that were sub 1985 prices!

Notice how the increased demand for housing (through very relaxed mortgage underwriting standards) pushed the prices up in 2004 & 2005.  Notice how the lack of demand pushed prices down and subsequent increases of default took those “we can finance a ham sandwich” mortgages away creating sharp declines.  Even with high amounts of units purchased the last several years shows that we continue to defy basic economic laws of supply and demand through continued depreciation.

I have been working an “I could tell you but then I would have to kill you” job doing fraud reports for an investor since the beginning of the year.  Something I have noticed in that time frame – doing that special job – is that we haven’t even pushed through 3/4 of the underwater inventory.  Oddly enough before I started doing this I thought we had already worked through 3/4 of the inventory and gave it another 2-5 years of living in the depths of ground zero foreclosure hell.  One of my favorite marketing chicks for a title company sent me a report this week that confirmed that number – 70 some odd percent of homes are still underwater in the valley.

Knowing what I know today, living & working the foreclosure nightmare, I have to adjust that number upwards from 2-5 years to 8-10 years of working through all of this mess.  Unless they start financing ham sandwiches again – which I doubt!

I will do these again in January after we close out 2011.  So far YTD (Nov 18, 2011) we have 41,706 units closed with a median price of $109,900.

• Foreclosure/Short Sale Listings (10/15/2011): Total Listings 12590; Short Sales: 5911, 47% of all listings; Bank Owned Listings: 2725, 22% of all listings. Short sale and REO listings consume 69% of total listings
• New Home Sales (September 2011, units sold): 396 Year Change +1.3% (excl condo conversions, highrises)
• New Home Sales (September 2011, median price): $205,281 Year Change +1.5% (excl condo conversions, highrises)
• Existing Home Sales (September 2011, units sold): 4281 Year Change +20.9%
• Existing Home Sales (September 2011, median price): $108,100 Year Change: -12.1%
• New Home Permits (September 2011): 252 Year Change +9.6%
• Rental Rate (MLS Monthly Average September 2011): $1279/month

My analysis: Distressed listings (foreclosures and short sales) are 69% of total listings. Units of homes sold is impressive. Credit markets must be watched as underwriting guidelines continue to tighten. Condos are barely financeable. Inventory stopped it's slow increase in December and now spring time buyers are gobbling up inventory through the summer and this trend seems to be continuing through fall. The rental market is softening due to all the investor/first time buyer combination of activity. This adds more supply and creates less demand. I do believe the rental prices being pressured downward is also causing the resale prices to be pressured downward.  Las Vegas is an anomoly to the law of supply & demand, we barely have any inventory yet prices are declining!

New Residents/Employment Conditions:

• New Residents (September 2011): 5368, Year Change +18.4%
• Total Employment (September 2011): 742,182 Year Change +1.3%
• Unemployment Rate (September 2011) 13.6%, Year Change -2.0%

My analysis: This sector is FINALLY seeing stabilization thus improvement. It is VERY encouraging to seem these numbers improve - even if slightly! Unemployment rate is still painful however the total employed numbers have remained close to stable for a year. Slight increase with unemployment rate the last two months.

Tourism/Gaming Conditions:

• McCarran Airport Total Passengers (September 2011): 3,553,307 Year Change +8.7%
• Gaming Revenue (August 2011): $752,242,062, Year Change -6.7%
• Visitor Volume (August 2011): 3,563,585, Year Change +2.1%
• Convention Attendance (August 2011): 412,902, Year Change +19.6%
• Hotel/Motel Occupancy (August 2011): 84.1% Year Change +2.1%

My analysis: This sector (tourism) needs to see some serious price corrections before we see a comeback. Corporate credit is not coming back any time soon. It will be hard to get convention attendance back up without corporate credit. Glad to see regular tourists are making their way here with the imbalance of the other numbers to replace the convention attendee numbers. Visitor Volume, Gaming Revenue & Convention Attendance are encouraging and hopefully sustainable.

Sources: Salestraq, Home Builder's Research, Greater Las Vegas Association of Realtors, Nevada State Gaming Control Board, Nevada Department of Motor Vehicles, McCarran International Airport, Las Vegas Convention & Visitor's Authority, Nevada Department of Employment, Training and Rehabilitation. Information deemed reliable but not guaranteed. My analysis is my humble opinion

While prices for Las Vegas homeowners are NOT NOT NOT!

Inventory continues to decline (still a seller’s market for 2+ years) YET Las Vegas property values CONTINUE to decline.

Congratulations Las Vegas – pat yourself on the back for defying all basic economic laws of supply and demand!

Here is the fuel that is feeding the fire:

• Unemployment rate near 15% in The Las Vegas Valley
• Extremely high amount of distressed inventory
• Extremely high amount o finvestor activity
• Continued strategic defaults (right, wrong or indifferent)

A while back I wrote about how rents are declining in the valley.  Last weekend I had three investors contact me asking me if this is going away.  The big answer is not until the employment situation improves in the valley, investor activity slows and distressed inventory declines.

I don’t expect Las Vegas property values and rental values go UP until the above picture gets a little bit more rosy.  Las Vegas rents are not declining rapidly, they are declining very slowly.  What I see (since I work Las Vegas area rentals,) is that new investor purchases are willing to UNDERCUT their competition when they go on the market.  No investor wants a vacant home.  Home insurance can drop them and vacant homes increase the possibility of theft and damage.  Might as well take a couple bucks less on the monthly rent than risk theft.

When will the picture for Las Vegas property improve?  Not until everything above does.  I don’t see it happening any time soon.  It isn’t the president or the government (Las Vegas was on the “out’s” before the election in 2008.)  No government program can stave off the natural cycle.  No government program can wash away the mindset of strategic default.  Las Vegas property values have deflated 8.6% year over year (Sept 2010/2011) so that pretty much shows that the $8K tax credit for first time buyers artificially inflated our prices for a while (ave home price in low $100K’s.)

It’s just the economy, stupid!  Let’s encourage small business to rise and find some jobs for the valley and the rest will take care of itself!

Why Should Homeowners Refinance Their Mortgage in a Falling Housing Market?
by Peter Harper

The current economical condition of the nation has both its positive and negative effects on the people – irrespective of what they are doing. So, in case of the housing market too, the economic condition has both its positive and negative effects. From the year 2010 on, mortgage interest rates have been low, and people have been refinancing their home mortgages. The only good thing of the economic downturn is that mortgage interest rates fell to historical lows.

Why Homeowners Should Refinance

Homeowners should refinance their home mortgages in this falling housing market:

1. In order to save home – Though the housing market is on the downslide, if a person faces problems in making the debt payments, then he/she can refinance the home loan. This helps in changing the terms and conditions of the home loan, thereby helping the person to go on making the mortgage payments. This is important because if you miss payments on your mortgage, you could lose your home as the lender will foreclose on it in order to get their money back.

2. In order to lower the interest rate – A refinance helps you in lowering the interest rate on your mortgage. Thus, as has been said before, it helps you to continue making the payments on your mortgage. In addition to the interest rate, the loan term may also get extended through the refinance. This too could help considerably lower the monthly payment.

3. In order to save money – Even if you aren’t having much problem in making the monthly payments on your mortgage, if you refinance the home mortgage, you may easily be able to save money on the mortgage payments. This is mainly because with refinancing, the monthly payment that you're required to make on your mortgage is lower.

4. In order to retain the investment – By refinancing your mortgage, you'll be able to retain the investment that you have made on your home. That is, as refinancing helps you in retaining your home even in case of financial crisis, you may be able to retain the investment. It may be important to retain the home as this may not be a good time to sell it.

5. In order to lock in a low rate – As mortgage interest rates are still low, now may be the best time to lock in a lower interest rate. This could prove advantageous to you if you're a struggling homeowner. You're required to pay more on the interest if you take out a long term refinance loan, but it might be worth it if the value of the home increases later on.

6. In order to build greater equity – Retaining the link from the previous point, you may note that as you go on making the monthly mortgage payments with a lower interest rate, you will be building equity in your home faster. This will also help in increasing the equity in your home. And, as home values will improve, you may be able to net a bigger profit when you do sell the home.

You can see that there are various reasons why homeowners should refinance their home mortgages in this falling housing market. Thus, you can see that even though the economic situation is poor and even though the housing marketing is struggling, it's important for the homeowners to refinance the home loan.

• Foreclosure/Short Sale Listings (8/15/2011): Total Listings 13073; Short Sales: 6021, 46% of all listings; Bank Owned Listings: 3060, 23% of all listings. Short sale and REO listings consume 69% of total listings
• New Home Sales (August 2011, units sold): 366 Year Change -+9.9% (excl condo conversions, highrises)
• New Home Sales (August 2011, median price): $197,490 Year Change -1.9% (excl condo conversions, highrises)
• Existing Home Sales (August 2011, units sold): 4363 Year Change +49%
• Existing Home Sales (August 2011, median price): $107,000 Year Change: -12.3%
• New Home Permits (August 2011): 331 Year Change -14.2%
• Rental Rate (MLS Monthly Average July 2011): $1434/month

My analysis: Distressed listings (foreclosures and short sales) are 69% of total listings. Units of homes sold is impressive. Credit markets must be watched as underwriting guidelines continue to tighten. Condos are barely financeable. Inventory stopped it's slow increase in December and now spring time buyers are gobbling up inventory through the summer. The rental market is softening due to all the investor/first time buyer combination of activity. This adds more supply and creates less demand. I do believe the rental prices being pressured downward is also causing the resale prices to be pressured downward.

New Residents/Employment Conditions:

• New Residents (August 2011): 5884, Year Change +9.2%
• Total Employment (August 2011): 797,300 Year Change -0.0%
• Unemployment Rate (August 2011) 14.2%, Year Change -1.3%

My analysis: This sector is FINALLY seeing stabilization thus improvement. It is VERY encouraging to seem these numbers improve - even if slightly! Unemployment rate is still painful however the total employed numbers have remained close to stable for a year. Slight increase with unemployment rate since last month.

Tourism/Gaming Conditions:

• McCarran Airport Total Passengers (July 2011): 3,692,055 Year Change +4.9%
• Gaming Revenue (July 2011): $715,533,451, Year Change +3.2%
• Visitor Volume (July 2011): 3,776,958, Year Change +3.7%
• Convention Attendance (July 2011): 263,441, Year Change -17.9%
• Hotel/Motel Occupancy (July 2011): 88.3% Year Change +4.3%

My analysis: This sector (tourism) needs to see some serious price corrections before we see a comeback. Corporate credit is not coming back any time soon. It will be hard to get convention attendance back up without corporate credit. Glad to see regular tourists are making their way here with the imbalance of the other numbers to replace the convention attendee numbers. Visitor Volume, Gaming Revenue & Convention Attendance are encouraging and hopefully sustainable.

Sources: Salestraq, Home Builder's Research, Greater Las Vegas Association of Realtors, Nevada State Gaming Control Board, Nevada Department of Motor Vehicles, McCarran International Airport, Las Vegas Convention & Visitor's Authority, Nevada Department of Employment, Training and Rehabilitation. Information deemed reliable but not guaranteed. My analysis is my humble opinion

Las Vegas Real Estate Inventory is seeing an unusually large amount of units closed for late summer.  August almost broke records!

Las Vegas Area Market Activity (Includes North Las Vegas, Henderson and Las Vegas)

• Listings (9/15/2011): 13073
• Under Contract (9/15/2011): 13333
• Sold Aug 2011: 4563

Short Sales:

• 46% of Listings
• 22% of Sales

REO (Foreclosures, Bank Owned:)

• 23% of Listings
• 53% of Sales

In One Month: Listings are DOWN -324 units, Contracted Listings DOWN -156 units, Sales are UP +635 units. Close ratios are going lower because much of the pending inventory is short sales which requires LONGER close times.

DOWN PAYMENT ASSISTANCE HAS NOT ENDED FOR FIRST TIME BUYERS, HOWEVER!!

Last Month's Pending Report

For Most Current Las Vegas Real Estate Inventory Market Report Click Here.

What Areas Do You Cover for your Las Vegas Area Real Estate Market Reports?

General Las Vegas Area Real Estate Market Reports are for MLS Areas 101-606 (the average consumer probably asks, what’s that?) It means that I cover the cities of Las Vegas, Henderson, North Las Vegas including unincorporated Clark County Townships of Whitney, Paradise, Winchester, Enterprise, Sunrise Manor & Spring Valley. They do NOT cover the areas of Boulder City, Pahrump, Laughlin, Moapa or Mesquite.

View More FAQ About My Las Vegas Area Real Estate Market Reports.

 DAILY MORTGAGE LOCK ADVISORY 

October 4, 2011, 6:30 AM PST

Click for Lock Advice Updated Several Times Daily  

Mortgage Interest Rate lock Advice for locks within 1 day:  FLOAT

Mortgage Points based on 3.5% Mortgage Backed Securities are up 0.03 point. 

30 Day Mortgage Interest Rate Lock or Float Advice:  FLOAT
On Wed. 09-21-2011 3.5% Mortgage Backed Securities (MBS) broke through a long standing resistance level which is very good news for mortgage rates.

MORTGAGE MARKET INDICATORS 

National Average Fixed Rate Mortgage 4.01%  A Hundred Year Low
MBS (FNMA 30-year 3.5) - 103.03, High: 103.25, Low: 102.91   
DJI Stocks currently $10,476.77,  Down $-178.53, Change -1.68%   
Asian & European Stock Market Indexes Down -2.605%   
Nymex Crude Oil Currently $76.01 Down $1.60  

MORTGAGE NEWS BRIEFS

MONDAY MORTGAGE RATES CLOSED AT THE LOWEST RATES IN OVER 100 YEARS!
 
Survey: Most Real Estate Investors Expanding Portfolios
Over eight in 10 U.S. real estate investors are making moves to shore up their portfolios even as talk of a double-dip recession persists, according to a recent survey. More shocking: most of the survey respondents parted ways with Americans at large by agreeing that the economy is headed in a northerly direction. Conducting the survey in early August, Colliers International, a real estate services company, deployed the 2011 Colliers International Global Investor Sentiment Survey as a way to measure investor appetite for risk and optimism. » Read More at MReport 

Greek Concerns Continue To Hamper Market Mood
The major U.S. index futures are pointing to a sharply lower opening on Tuesday, with sentiment likely to be weighed down by the fears that Greece is on the brink of default. The fears strengthened due to a lack of unanimity among euro group officials in finalizing the second round of financing for Greece. Risk aversion is still ruling the roost and risk assets are retreating. The upcoming economic data of the week is also likely to introduce some caution among traders.  Read more at RTT News

Most Americans feel our Government has failed us because it is controlled by big money.   

The documentary "Inside Job"  and the movie "To Big To Fail" clearly illustrate who is currently running our government.  Learn the advantages of publicly funded elections go to  Americans for Campaign Reform 

One of the first questions that existing FHA Borrowers who are interested in purchasing another house is “can they purchase the new house with a second FHA Loan, if they want to keep the first house as an investment and rent it out? The answer is yes under certain circumstances.

First of all FHA does not do investment loans, FHA is a owner occupied loan, meaning that the house must be the Borrower’s Primary Residence, which means that the Borrower must live in the house for the majority of the calendar year.  Further the Borrower must take occupancy of the house within 60 days from the Closing of the loan, and continue to occupy the house for at least one year.

Because FHA is intended to be an owner occupied loan, and to prevent circumvention of the intent of the loan, “FHA will not insure a mortgage if it is determined that the transaction was designed to use FHA mortgage insurance as a vehicle for obtaining investment properties”.

Having said that, FHA will allow for exceptions that fall within certain circumstances, in order to determine if the Borrower is eligible for an exception the Underwriter must first take into consideration:

• The length of time the Borrower owned the previous
• The circumstances that the Borrower wants purchase another property

Once the Underwriter has taken the above into consideration, an exception may be granted for the following reasons.

• The Borrower is relocating
• The Borrower is establishing residency in an area outside reasonable commuting distance from his/her current principal residence

 Note: 

• If the borrower later returns back to the location of the first house he/she Is not required to re-establish primary residency In that, also 
• The relocation does not need to be employer mandated to qualify for this exception.
• The Borrower may be eligible for another home with an FHA-Insured mortgage if the number of his/her legal dependents Increases to the point that the present house no longer meets the family's needs
• The first FHA mortgage has a Loan-To-Value (LTV) of 75% or less, based on the outstanding mortgage balance and a current appraisal
• The Borrower vacating the property, but the property will continue to be occupied by a Co-Borrower.  Example: A couple is divorcing
• The Borrower is a Non-Occupying Co-Borrower on a property that he/she purchased with a family member and the property is the principal residence for the other family member

If a Borrower with an Existing FHA Mortgage cannot meet one of the exceptions listed above, then the Borrower MUST:

•  Pay off the existing FHA Mortgage on the first residence, or
• Terminated ownership of that residence.

So as you can see there are several ways that a Borrower can have multiple FHA Mortgages at the same time as long as the Borrower meets one of the above exceptions, and is not trying to circumvent the rules in order to purchase an investment property.

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Who To Call For Your Mortgage Needs In Connecticut:

George Souto NMLS# 65149 is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308  gsouto@mccuemortgage.com, or visit my McCue Mortgage Homepage.