BluefoxToday blog : June 2010

Rhodes Ranch Area Resale Market Report (homes for sale, pending and sold):

• Active Listings (6/15/2010): 193
• Under Contract (6/15/2010): 449
• Sold May 2010: 95
• Low:  $60,000 (Apache Hills Condo)
• Median:  $138,000 (Durango Springs)
• High:  $390,000 (Rhodes Ranch)

Rhodes Ranch Area Rental Market Report (homes for rent, contingent, leased)

• Active Listings (6/15/2010):  78
  
• Under Contract (6/15/2010): 29
  
• Leased May 2010:  62
  
• Low:  $700/month (Vistana)
• Median:  $1195/month (Canyon Trail)
• High:  $3850/month (Rhodes Ranch)

How to read my market reports (definitions and terms!)

Last Month's Market Report

Includes: Apache Hills, Apache Springs (The Falls), Astoria Homes at Rhodes Ranch
(Independence), Canyon Trail, Huntington, Liberty @ Warm Springs, Maplewood, Rhodes
Ranch, Richmond@ Rhodes Ranch, Sierra Madre, Venezia, Vistana.

For More information & most current market report on the Rhodes Ranch Area:  http://www.livingatrhodesranch.com/

View Rhodes Ranch Area in a larger map

As the housing sector kept sucking for more oxygen, Washington announced back in February the Hardest Hit Fund worth $1.5 billion that was designed to help states in serious housing peril and asked them at the time, as a condition to get a slice of the money, to submit creative programs that would lend a hand to homeowners struggling with mortgage payments. The plans from Arizona, California, Florida, Michigan and Nevada have now been okayed by the Treasury and the assigned funds are ready to begin flowing to the states' Housing Finance Agencies, or HFA, tasked to administer their use.

California drew the largest share at $699.6 million, Florida got $418 million, Michigan $154.5 million, Arizona $125.1 million and Nevada $102.8 million. Apparently the split was based largely on population size, which certainly is one way to do it.

A fairer method might have been to look at the current mortgage foreclosure rate in each state, in which case Nevada - with Las Vegas as its much-pummeled real estate meltdown epicenter - would have picked up a bigger portion of the proceeds. Negative equity measure, or being underwater, would be another metric that could have been used here. Again, Nevada would have ranked right up there for more funds than what it now received.

Each state presented its own innovative program for mortgage borrower relief, but a few predictable items appear on everyone's list. The most prevalent one is principal reduction, something that all address in a variety of ways. It clearly is the key in any plan, government or private, to stabilize housing markets from Florida to Nevada and beyond. The Obama Administration is putting increasing emphasis on it, but its actions need more support from mortgage lenders who so far have been reluctant to do much about it.

Unemployed homeowners get help to meet their mortgage obligations while looking for work is another popular feature. As is the assistance to handle the complexities of a second mortgage that may be hindering loan modification or any other real estate transaction, like a short sale.

Hardest Hit Fund will have a second phase later this year, covering the next tier of states lured into the now infamous mortgage and real estate backwater. It will bring some relief to a still festering housing situation, but for a real impact to be achieved the private sector needs to step up to the plate with a hot bat.

Cash REMAINS KING in the Las Vegas Area Real Estate Market!!!  It is important for every buyer in the Las Vegas Area Real Estate Market to understand who their buyer competition is in this currently competitive seller's market LV is enjoying!  It is important to understand how a seller looks at each financing type:

Cash Offers:  Generally have less contingencies and quicker close times.  A cash offer may be accepted even if it is lower than a financed offer.

Conventional Financing:  Less strict with lender required repairs but larger down payments and more strict credit guidelines.

FHA/VA Financing:  Requires more scrutiny with lender required repairs via appraisal.  In general these take longer to underwrite and close so a cash or conventional offer looks more enticing to the seller.  FHA Requires the deed to be seasoned for several months so some flips bought at trustee's sales are generally out as options when competing with multiple offers!

Other:  Less common and creative financing types such as Lease Options, OWC (Owner Will Carry), etc.  The "other" category INCLUDES auction terms!!

Last Month's Report

Most Current Report (scroll to bottom of page)

One Hundred Twenty Three (123) individuals have been charged, convicted or sentenced since March 1 (according to the Las Vegas Review Journal) from the FBI's Operation Stolen Dreams.

Names or details have not been released.  It is being insinuated that the fraud is from straw buyer activity and many of the 123 targeted from the probe are real estate related professionals.  I am wondering if any activity is from short sale fraud and what I call "flip flops".

There are some comments annoying me on LVRJ's website.  This is the reason why I don't like commenting on LVRJ's website nor do I allow anonymous comments on my website.  Some times it is hard to convince people who do not know what they are talking about that they are dead wrong.

Here are some of them and my answers to them (scroll to bottom of article):

Commenter 1:  Even today, Realtors are encouraging people to buy new homes and walk on thier old homes. They call it a strategic default and consider it harmless

Commenter 2:  I hope they are going after the realtors that are assisting people in buying a new home while walking away from their old. Then after that the FBI needs to investigate the banks that start the Foreclosure process, a person walks away as they have no hope in keeping it, and the bank leaves it in the homeowners name until they have a buyer which at that time they foreclose then sell it. This way the bank does not owe Republic Services, HOA's and others for unpaid fees.

I would love to know who is lending to these people.  First off, if someone was so honest about this activity, I would not participate.  If I did participate, I don't know who is lending to these people.  Underwriting guidelines are tough (and have been to mitigate risk.)  Some people still pretend they are the first to come up with "well my spouse isn't on the loan so we will let the home foreclose and they can buy one."  WRONG WRONG WRONG.  Underwriters want to pull spouse's credit now too. 

As for unpaid fees, I don't know if they are talking about private trustee sale purchasers.  If the bank has to buy back their own property (REO), they are responsible for back taxes, HOAs, liens and other fees.

Sorry but it just annoys me to no end when people say things that are not likely to happen and make it sound like it is happening all the time.  It could happen, I guess, but lenders have made it pretty tough to go around this - and these guidelines have been in effect for I would say a solid 2+ years now.

I guess my point of the story was to address the points above and say I am chomping at the bit to hear whom and to what degree the individuals were charged.

Inventory is increasing RAPIDLY.  This may be due to the first time buyer's tax credit expiring.  This is also good news as we could emerge from the extreme seller's market that we have been in for over a year to a stable market in about 8 months (with a consistent increases like the ones we have seen this month.)

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

• Listings (6/15/2010):  10548
• Under Contract (6/15/2010):  15748
• Sold May 2010:  3513

Short Sales:

• 43% of Listings
• 29% of Sales

REO (Foreclosures, Bank Owned:)

• 20% of Listings
• 42% of Sales

In One Month:  Listings are UP +994 units, Contracted ListingsDOWN -553, Sales are DOWN -85 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

The Most Current REO (Foreclosure) Report

The Most Current Short Sale Report

The Most Current Las Vegas Area Pendings Report

Subprime home loans became a noteworthy ingredient in the recent real estate frenzy. Large pools of them were sold on the secondary mortgage market as RMBS, or residential mortgage-backed securities, to supply additional liquidity for more loans. When the air suddenly escaped from the tremendous housing bubble the first mortgage product to absorb its swift and devastating effects was the subprime kind, leaving scores of investors wondering what had whacked them.

Moody's Investors Service details that subprime RMBS issued from 2005 to 2008 reached a delinquency level of 54.4% in January of 2010, an all-time high. From there on, though, the rate has been steadily falling, settling at 51.5% in April, a moderate improvement. But it had been climbing continuously for years since the real estate market's collapse, so a change downward, even if slow, is desirable news. In short, subprime mortgage borrowers are bringing their loans current at an increasing rate. Everybody likes to see that.

According to Moody's research HAMP, or Home Affordable Modification Program, has been a major contributor to this. HAMP has received sometimes loud criticism for its lack of bite, but Moody's numbers appear to show otherwise. In January 117,302 trial modifications were converted into active permanent ones and then in April the same happened to 299,092 of them. That's real progress.

Re-defaults are still a problem, however. Moody's estimates that 50-70% of permanent mortgage loan modifications will do so, thanks to the underwater, or negative equity, dynamic affecting so many states. Worst-mauled areas like Las Vegas and Phoenix are extremely ripe here. The emphasis now from the government is to get home loan lenders and servicers to lower principal for borrowers, a task that has been tough in the past and probably will stay so.

It seems that HAMP needed quite a bit of time to get in gear and now it's cruising along under full power and is showing some encouraging results.

Summerlin May 2010 Real Estate Resale Market Report:

• Listings (6/15/2009):  676
• Under Contract (6/15/2009):696
• Sold May 2010:  150

Since Last Month's Report:

• Listings UP +40
  
• Pendings DOWN -12
  
• Sold Units DOWN -1
  

Last Month's Summerlin Report

Most Current Summerlin Market Report

Las Vegas Area June 15, 2010 Active Listings by Type

• REO:  2146 (20%)
• Short Sale:  4559 (43%)
• All Other:  3843 (37%)

May 2010 Sales by Type:

• REO:  1464 (42%)
• Short Sale:  1039 (29%)
• Other:  1010 (29%)

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)

Las Vegas Area REO Inventory has RISEN since last report (+367 units), Under Contracts have RISEN (+38) units  Closing data has FALLEN (-162) units.  Low interest rates have spurred a flurry of buyer interest & activity this December and it continues.  

REO sales accounted for 42% of all Las Vegas Area Valley resale closings in May 2010.  REO listings account for only 20% of total resale listings.

Multiple offers are streaming in as banks continue to lower to fire and auction sale prices.

Current Listed Bank Owned Statistics:

• Listings (6/15/2010):2146
• Under Contract (6/15/2010): 2787
• Sold May 2010:  1464
  

View Last Month's Report Here  

To find the most recent report, click here

Mortgage Rate Forecast for June 14, 2010

Here are some of the events affecting mortgage rates today:

What Mortgage Backed Securities Are Doing Today:

• The price of the FNMA 30-Year 4.5% MBS coupon opened at 102.53 this morning - the same as Friday's close.
  
  
• At 9:30 AM, the 4.5% MBS coupon was trading at 102.28 - down 8/32 from its opening.

Remember, on mortgage backed securities (MBSs), as the price goes down, the yield goes up - and so do mortgage rates. I expect that mortgage rates will be up to 0.25 points worse in price this morning as compared to Friday.

Price Trend in Mortgage Backed Securities:

The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days from 5-15-2010 to 6-14-2010:

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

• There are no economic reports scheduled for release today.

Trend in Mortgage Rates:

The chart below shows the trend in mortgage rates over the past year:

Mortgage Rate Lock Advice:

Mortgage rates are again off their lows of the year. On Friday, the price of the FNMA 30-Year 4.5% Coupon closed at 102.53, 50 basis points lower than it's all-time high of 103.03. After the open this morning, the MBS coupon fell in price, and is now down 75 basis points from the all-time high. As a comparison, what that means is this: if a 30 year fixed mortgage rate was 4.75% with a 0.5 point on Friday, and if price of the MBS 4.5% coupon were to go as high as 103.03, then the best the 30 year fixed mortgage rate would be is 4.75% with no points today.

While it's still possible that mortgage rates could go even lower with the ongoing economic crisis in Europe, it won't be by much as fears of debt defaults in Europe are lessening. So, I would not risk the chance waiting for it.

If I was closing within the next 5 - 7 days, I would lock in the rate.

If you are closing in more than 7 days, send me an email to get my rate lock advice.

Be sure to check out today's mortgage rates.