Las Vegas housing prices turn more affordable

The current crunch that descended on the Southern Nevada real estate market is slowly working on what it is designed to do. It was invited to the valley by stark economic realities that had learned the bazaar had grown overheated and was actually about to spiral out of control. Home prices were zooming, builders were putting up way more houses than was needed and the mortgage money was cheap and accessible to just about anybody.

The crunch watched the frantic housing activity for a stretch and then saw it best to intervene, swooping in to save the day. And its actions are finally starting to produce results.

Home values here have been retreating steadily and are seemingly nearing the bottom. It's one of the three main segments in the overall market that went out of whack. The other two were anemic sales and the excess supply of new and resale houses, or the inventory.

Please click on the link in the first paragraph to read the entire article.

Mortgage and real estate scams alive and well

Now that the mortgage and housing markets are together going through tough times scam artists have come out to sniff for opportunity under just about every rock. They are shamelessly preying on the unaware. The numbers alone tell the story, as FBI's Financial Crimes Enforcement Network, or FinCEN, registered almost 15,000 SARs, or suspicious activity reports, in the first fiscal quarter of 2008 and plans on getting over 60,000 of them for the entire year. Fiscal 2007 had 46,700 and 2006 35,600. That makes for quite an upward curve for the last three years.

And those figures are only part of the story. Banks under federal scrutiny are the only ones required to record SARs while those home loan lenders who fall outside the reporting regimen make up a good majority of the total loan activity. The problem, therefore, is much larger than what these FBI statistics reveal and the current regulatory structure appears to be unable to stop it.

Please click on the link in the first paragraph to read the entire article.

Photo by sellabode.

Mortgage foreclosures more common in Las Vegas suburbs

Very little has changed in the last few months. Nevada still ranks as number 1 in the country in mortgage foreclosure filings with 18,087 for the first quarter of this year, according to California firm foreclosures.com. The state just can't seem to shake that undesirable position. Clark County has nearly 16,000 of that total which in turn aims the red spotlight right on Las Vegas.

The noteworthy aspect here is that the large majority of the foreclosures are in the outlying suburbs. In the new home subdivisions where builders large and small kept putting up house after house during the recent exceptional boom. By zip code the two top "performers" are 89131 in northwest valley and 89031 in North Las Vegas, as tallied by the research shop SalesTraq.

Most of the investors who came to town to fuel the runup in prices bought new houses. They signed contracts while the homes were still under construction, then contently watched as the builders kept hiking the prices due to high demand and when they took possession, the property was promptly sold at a nice profit. They are actually called flippers because of the quick turnover.

Another thing that attracted them to the new subdivisions was the flexible mortgage service the builders provided. It became like an assembly line for the developers to put through buyer after buyer to their spanking-new homes and the mortgage process was just one easy step along the way. Just about any flipper would qualify for a loan, one important reason why the sales figures soared.

The outlying suburbs also attracted upward-mobile homeowners who were seeking bigger houses so they could brag about it at work and on the golf course. Many really didn't need a larger home but the status factor made them throw prudence into the wind. Besides, the builder was so accommodating with the financing and the value increases showed no signs of slowing down. How can you go wrong in that kind of a real estate market? Getting a big house was one thing, the bonus was to turn into an instant and successful investor on the side.

The end game of those excesses is being played out now.

It is quite ironic how the business cycle works. The new subdivisions were getting most of the action when the market was hot a few years ago in terms of sales and price increases. It's getting most of the activity again, only this time on the downward side of the curve with foreclosures and price decreases.

Southern Nevada real estate market warming up

March was a promising month for Las Vegas residential real estate. Spring is here and people are finally starting to believe that now is probably as good a time to buy a home as any. Mortgage rates continue to be under 6%, meaning that end is still favorable, and prices have decreased quite a bit, so there are excellent deals out in the field right now that may not last all that long.

GLVAR, or Greater Las Vegas Association of Realtors, disclosed that 1,478 single-family homes closed escrow in March which is a 34.6% jump from February, representing the third monthly hike in a row. That is very encouraging. This is one of the three important components that determine the market's health and it's moving steadily in the right direction.

The noteworthy item here is that 52% of the sales were foreclosures and short sales, or properties that are going for less than the underlying mortgage. It's more and more common now that these listings are getting multiple offers and the surprising volume is in fact putting a bit of a strain on short-staffed mortgage lenders and title firms. Isn't it nice to be busy again.

The second component in the big scheme of things is the single-family house inventory level and that actually inched up again, to 22,763. It's a 1,2% increase from February. Not much, but still up. When it begins heading down it signals improving strength for the market.

The third factor is the price. It gave ground in March, a negative sign. Just a bit, though. The median price slipped 1.4% to $243,169, but is off a somber 20.3% from a year ago.

All in all, one component is solidly positive and the other two are getting closer to being there, so the market is working hard to right itself. Cautious optimism is taking over.

Mortgage refinance made troublesome

The residential real estate markets in many areas of the country are plodding along in high weeds. When that is combined with a home loan industry that is grappling with serious balance sheet tremors, the situation is ripe for a healthy head scratching for a homeowner who needs to refinance his explosive mortgage. As if that isn't enough reason to take a deep breath, there is another new, potentially crippling twist to the scenario.

The refinance process can turn murky, even impossible, if a second mortgage is involved. It usually is subordinate to the 1st loan, so in case of a default the 1st loan is paid off first and what's left goes to satisfy the second. Clearly the second mortgage holder takes a bath if the sales proceeds aren't enough. To read the entire article, please click on the link in this paragraph.