BluefoxToday blog : December 2009

Mountain's Edge November 2009 Real Estate Resale Market Report:

• Listings (12/15/2009):  199
• Under Contract (12/15/2009):  351
• Sold November 2009:  79
• Month's Inventory:  2.5

Since Last Month:  Listings are UP +22, Pendings are DOWN -9, Sales are UP +1

Last Month's Mountain's Edge Real Estate Market Report

Mountain's Edge is a newer community so many of the listings are short sales or bank owned.

Silverado Ranch November 2009 Real Estate Resale Market Report (Homes For Sale, Pending, Sold):

• Listings (12/15/2009):  135
• Under Contract (12/15/2009):  258
• Sold November 2009:  62
• Month's Inventory:  2.2

Since last month:  Listings are DOWN -3, Under Contract DOWN -15, Sales are DOWN -22

Read Last Month's Report Here

The Mortgage Market Watch for the Week of December 28, 2009

Events Affecting the Mortgage Market This Week:

The Feds will auction another $118 billion in Notes this week: $44 billion in 2-Year Notes on Monday, $42 billion in 5-Year Notes on Tuesday, and $32 billion in 7-Year Notes on Wednesday. The auction supply will weigh heavily on the bond and mortgage markets on mounting concern that demand from foreign central banks may lessen on concerns the US federal debt is too great. This could lead to higher mortgage interest rates.

It is also another holiday-shortened week with the New Years Day holiday. The bond and mortgage markets will close early Thursday and remain closed on Friday. Many traders will not be working the latter part of the week, so any unexpected news or data could lead to larger than usual reaction in the financial markets.

Economic Reports to be Released This Week:

There is only one economic report scheduled for release this week that could have an impact on the mortgage market and mortgage interest rates.

Monday, December 28th:

• There are no economic reports scheduled for release today.

Tuesday, December 29th:

• Consumer Confidence Index (CCI) for December - posted by the Conference Board, this measures consumer willingness to spend. Because consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely by market traders and can have a significant influence on the mortgage market. If consumers are more confident in their personal financial situations, they are more apt to make large purchases. Analysts are expecting a reading of 53.0, up from November's reading of 49.5. Higher CCI readings could lead to higher mortgage interest rates.

Wednesday, December 30th:

• There are no economic reports scheduled for release today.

Thursday, December 31st:

• Jobless Claims - New claims for unemployment are tabulated each week to show the number of individuals who filed for unemployment insurance for the first time. With a decreasing trend in the filing of new claims for unemployment, this suggests that the labor market is improving. However, this data is usually not considered to be very important to the mortgage market.
  
  
  
• Fed's MBS Purchase Program - the results of this week's purchases of mortgage backed securities by the Feds will be released in the afternoon. As of last Thursday, the Feds have purchased over $1.070 trillion in mortgage backed securities this year. The Feds plan on purchasing up to $1.25 trillion in mortgage backed securities through March 31st.

Friday, January 1st:

• There are no economic reports scheduled for release today. The markets are closed in observance of New Years Day.

How do Economic Data Releases Affect Mortgage Interest Rates?

One of the most important things for you to know when deciding when to lock in the interest rate on your mortgage is knowing what economic data is going to be released - and when - and how it may impact the mortgage market and mortgage interest rates.

While an in depth review of an economic event can help you make an informed decision, understanding the nuances of a release can't help you if you don't know when it's happening. Economic data releases are important because they provide a snapshot of what's happening in the economy. They also provide a foreshadowing of any upcoming market volatility. It's just as important to know when these data releases are happening as knowing what effect these releases can have on the mortgage market.

Mortgage Interest Rate Outlook:

Moderate to High Volatility. As we saw last week, a shortened holiday trading week by no means translates into calmness in the mortgage market. The bond and mortgage markets will close early Thursday at 2 PM, and will be closed all day Friday in observance of New Years Day. This means that trades in mortgage backed securities will light during the latter part of the week. This raises the possibility of stronger reactions to surprises in the mortgage market from economic data than we normally would see.

There's not much room for MBS prices to move higher or for mortgage interest rates to move lower at the moment. Mortgage interest rates are still at historic lows. If you're happy with the rate being offered to you and don't want to risk mortgage interest rates moving higher, you should apply and lock in today. While there's still some room for MBS prices to tick higher, it's better to have locked when you should have floated than it is to float when you should have locked.

If you have not yet locked in your mortgage interest rate, please proceed with caution and maintain contact with your mortgage professional. Also, give very serious consideration to applying now and locking in before mortgage interest rates get worse.

The mortgage and real estate markets are in the midst of a major overhaul on the heels of the current housing embarrassment. The home loan sector has already seen major regulatory changes, some needed and some of dubious value. And in this climate of political gamesmanship and Wall Street lobbying more is conceivably on the way to favor large financial institutions. Mortgage lenders have also tightened considerably underwriting standards to align their operations to better handle the new market realities.

The economically significant housing sector is absorbing changes unimagined just a few years ago. One of them is the fact that homeownership is on a downward slide. The recent New York Fed's study points out that homeownership crested at a respectable 69% in 2006 and now stands at 67.3%. At this point it's down only fractionally, but this meltdown still seems to have enough legs to go another year or two. Perhaps even longer. As a result it probably will sink several more percentage points.

Homeowners being upside down - the disturbingly unpleasant experience when the mortgage balance exceeds the home's value - on their property is the underlying cause here. This has actually become a major impediment to the entire real estate market's recovery plan. According to Zillow.com, to date homeowners have lost $5.9 trillion in value since the housing market topped out in March of 2006. Any time the worth of a major asset class nosedives like this there will be serious consequences on many fronts.

Southern Nevada - with communities like Las Vegas, Henderson, Mountains Edge, Anthem, Rhodes Ranch, Silverstone Ranch, Mesquite, Summerlin and Anthem - homeownership rate over time is likely to take an even bigger hit than the national average. The real estate market here is in the grip of its worst slump in memory, easily qualifying it as one of the worst around. It puts more downhill pressure on the curve, bending it to where it hasn't been in a long while.

Many present upside down, or underwater, homeowners on a national scale will turn into tenants. Typically they expect to find the roof for over their head more affordable in an apartment or a rental home. This probably is true in many areas in today's real estate market.

Yet, for instance in Las Vegas home values in the lower end of the market have dropped to the 1990s levels, making them totally attractive. Couple that with the low cost of mortgage money and real opportunities abound all over the place. Now, the challenge is how do these underwater homeowners dispose of their existing property and still be able to qualify for a new mortgage.

Homeownership will continue declining for the foreseeable future, only to stabilize when most of the mortgage foreclosure traffic is brought under control. It'll probably one day claim back some of the lost ground, but reaching the 2006 high again appears to be a distant dream.

Elliott has written a great blog about As, Bs and Cs. Good advice for all sides to know.

I read Katerina Gasset's (very valid) rant:  Don't Represent Buyers In A Short Sale If You Don't Have A Clue!

The Short sale has got to be one of the most complicated contingency types (whether you are representing a buyer or seller.)  Many types of scenarios can "pop up" during the course of a short sale (while you are waiting and waiting and waiting.)  It is so important to counsel your buyers and sellers before you list or sell a short sale property with the different scenarios to make sure that they have "skin to stay in the game".

We permit property managers.

We permit business brokers.

Why can't we permit REO and Short Sale list agents and buyer's agents?  (of course it is impossible to legislate stupidity like the example in the article posted above.)

I am in the process of listening to "Shift".  Today while I was tootling around for 4 hours in my car, I got to the juicy parts about "short sales."  There was much truth to why short sales fail (incompetent agents involved, bpo's etc.) 

Many people selling DO use agents to just postpone their trustee's sale notices and have no intention of closing a transaction.

Many buyer's DO NOT understand the process and end up backing out before it gets over.

Many BPOs do not get done properly because agents doing them don't know what they are doing (or there is a sweat shop of unlicensed assistants hired to do them for agents not knowing what they are doing.)

With all the intricate possibilities brought about with the complexity of the short sale:  MANY agents have just FAILED their clients, period.

Desert Shores October 2009 Real Estate Resale Market Report (Homes For Sale/Under Contract/Sold):

• Listings (12/15/2009):  49
• Under Contract (12/15/2009):  96
• Sold November 2009:  26
• Month's Inventory:  1.9

Since Last Month:  Listings are DOWN -7, Pendings are DOWN -10, Sold Units are DOWN -3

Last Month's Report

Click here for Most Recent Desert Shores Market Report

Click here for More Information on Desert Shores Lake Living.

Las Vegas Area December 15, 2009 Active Listings by Type

• REO:  2253 (22%)
• Short Sale:  4474 (43%)
• All Other:  3605 (35%)

October 2009 Sales by Type:

• REO:  2378 (63%)
• Short Sale:  645 (17%)
• Other:  751 (20%)

This is just a guide for consumers to see what types of properties are closing vs what is listed.  Currently we have the most closes in the REO sector and the least inventory in the REO sector and it is an extreme seller's market.

Click here to see last month's Listing and Sales Type Report

Click here to view the most recent stats (scroll to bottom)

The housing market is a mess. The home loan industry is limping along. The economy is on an IV drip. Bernanke makes Time magazine's Man of the Year. Tiger, well, nuff said.

But there are also some goods news sprinkled in somewhere there. Here's one.

The real estate meltdown is now credited with bringing down the U.S. divorce rate. That's right. The National Marriage Project just reported that last year this important statistic dropped 4%. See, couples on the ropes in the past used to quarrel over who gets to stay in the house and how to split the accumulated equity. When money is in play, there usually is a fight. But now so many married homeowners have no equity to battle over, so they decide to hang onto the holy matrimony and sail through the storm together while holding hands. When the housing market eventually comes back - could be a long wait in some areas - they can then drop the gloves and go at it. Or they may have managed to work things out during this cooling-off period and will stay hitched after all.  

Las Vegas valley - including Henderson, Mountains Edge, Anthem, Spanish Trail, Southern Highlands, Summerlin and Rhodes Ranch - homeowner couples with mortgages are probably staying together in greater numbers because the housing market here is a nightmare. The divorce rate in Southern Nevada must've sunk double the national figure of 4%. If not more. And any realistic recovery here will likely take longer, allowing feuding couples actually extra time to work on their people skills. This theory may also hold water in the other mauled states like California, Florida and Arizona.

There are other avenues to explore for couples in trouble and underwater besides waiting the real estate market out. Short sale is now becoming more acceptable to mortgage lenders, renting the home out for the time being and the latest trend is to pull a strategic default. So, there are alternatives.

The mortgage and real estate mayhem has caused a lot of trouble to homeowners in many different ways, but it has also brought on some unintended, positive consequences. Like the lower divorce rate. Who would have thought that? The winners really are the kids whose squabbling parents are kind of forced to come up with workable solutions and tone things down, at least temporarily.

Photo by jdiggans

Summerlin November 2009 Real Estate Resale Market Report:

• Listings (12/15/2009):  648
• Under Contract (12/15/2009):  598
• Sold November 2009:  149
• Month's Inventory:  4.3

Absorption is slightly higher than Las Vegas Valley.

Since Last Month's Report:

• Listings DOWN -46
• Pendings UP +3
• Sold Units DOWN -21

Last Month's Summerlin Report

Most Current Summerlin Market Report