Real Estate Information Archive

Las Vegas home buyers!  New changes are in store for FHA mortgage insurance premiums.  John Longstreet with Cornerstone Home Lending submmitted the following analysis today.

FHA is lowering their upfront MIP to 1% as of October 4^th,2010!  The bad news is that they are INCREASING the MIP renewal from .55% to .90%, which, in purchasing terms, will decrease the buying power of your buyers by approximately $7500 from their maximum purchase price.  But, in the long run, is it really bad news?  See how the new premiums will affect equity over time. 

 See below illustration:

 Up front mortgage insurance will decrease to 1.0% for all amortization terms

• Annual premiums will increase on amortization terms >15 years to:
  • .85% on LTV’s <95%
  • .90% on LTV’s >95%

Old MIP vs. New MIP illustration

Based upon a loan amount of $200,000 @ 4.5% rate @ 30-year @ 96.5% LTV:

(*The Borrower Pays $45 more per month which translates into a negative $7,500 in buying power.)

However, if home is sold at year 7:

[*FHA gets $2,102 MORE in MIP but principal balance is $2,175 less, so at year 7, it's basically a "wash". (the same calculation for 5 years, same deal.)]

Bottom line, FHA gets MORE, but the buyer builds up more equity.

As of right now, the MI is still deductible on income taxes (sunset on December 31, 2010).

Just a reminder, that the MI drops off after it reaches 78%, or approximately 10 years!

John Longstreet can be reached at 702-250-0688 cell.  He is based in Henderson, NV with Cornerstone Home Lending.

Another down year for Las Vegas and Henderson.  Median prices fell in 2009 ranging from a low of 10% in 89107 and 89123 to down 60% in 89109 - the corridor of high rise condos!  Year over year figures are less than the previous year.  See here.

Big is out.  Smaller and responsible is in.  So is luxury and lifestyle amenities.  Judging on the newest offerings from Las Vegas and Henderson homebuilders, they seem to align with national trends.  How does this top 10 list rate with you? Read this article reported from the International Homebuilders Show here in Las Vegas.  Tell me your one "must have" on your next home.  http://bit.ly/bpT7QQ

REALTOR Magazine published today a short news story about the 10 most undervalued real estate markets in the US.  Las Vegas real estate was #1 on this list by a followed by Vero Beach, FL at number 2.   With home prices now hovering about 65% LESS than their peak values, the pendulum has moved to past a reasonable price correction to extreme as shown here with our now most undervalued honors.  Contact me to BUY TODAY!

Click here to read complete story

Here is the state of the condo market as of 8/31/2009.

>>The Average SOLD price of a condo is increasing – more than 13% in the last 4 months.  It bottomed in May.

>>810 Condos sold last month with 75% of those sale being CASH.  When looking at the stats for condo sales under $75K, 87% of them are CASH.

>>All condos listed are selling at 103.9% of list price if sold in the first 30 days.  When looking at condos below $75K only, they are selling at 106% of their list price. 

Here are my takeaways.  Cash is nothing special as 9 in 10 buyers under 75K are using the same.  List or lower offers will NEVER WIN unless the property has been on the market for more than 30 days.  These numbers are for all areas – desirable and less than.  Desirable areas will require more aggressive bidding prices than the average. The past 4 months have produced 2 of the 4 highest number of recorded sales in Las Vegas history.  Have you missed the bottom?

Great 4 plus minute video on Consumer demographics, technology, and the RE/MAX system and the agent within it.  In Las Vegas, the RE/MAX Agent closely resembles the national average.

Déjà vu on the headline?  You bet.  This week, it was announced Las Vegas home affordability is nearing an all-time high.  The number of Pending Sales in the Las Vegas market  at a almost 3 year high.   Why the big increase in sales?  Rates under 5%, home prices off 55% from their high, and plenty of selection are all factors.  Closed sales are up 105% versus last year to date.  The luxury segment is the low point of the market, off 59% from last year.  Total inventory of homes is down 7.7% in past 9 weeks.

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