Shall-Ching Lu

Hello from Las Vegas! Reporting to you on our market condition as of November 2008. We will have December data by the 10th of the following month. Here is the latest trend in housing development.

*Number of homes sold in November decreased for the first time this year by 22% to 2,183 from 2,718

*Medium home price reduced by 2% to $186,000

*Average home price increased by 2% to $232,267

*Home prices will drop slightly below the 4% trend line then adjust accordingly as it has historically

*90% homes listed are rented, 7% increase from 2007 and 2006, 14% increase from 2005. Medium rental income is $1,250.

Number of Homes Sold

Medium Home Prices Sold

Average Home Prices Sold

WEEKLY RATE REPORT :

Rates are down from last week. Seventh week in a row. That's a nice streak.

What makes this most interesting is that Fannie and Freddie starting tracking interest rates each week in April of 1971. 37 years ago.

In the history of this tracking, interest rates have NEVER been lower.

Rates were between 6-8% in the 1960's so some are saying these are the lowest mortgage rates we have seen in the last 50 years.

On average, a $200,000 loan today is about $1000 per month before taxes and insurance.

Don't try and time the market...it can just as easy go back up quickly....buy now, lock your loans today!!!!

Refinancing is back. If you have equity, there is no better time to refi. The challenge here locally is that a recent report stated that about half of all of the homes in Las Vegas are upside down.

NEW GUIDELINE ANNOUNCEMENTS THIS WEEK :

if you are putting down less than 20% on a home and you are doing a conventional loan (not FHA or VA), if you require mortgage insurance you must have a 720 credit score and your debt to income ratio must be 41% or less or you will not qualify for mortgage insurance.

Impact-- Huge. This means that for all loan amounts over $287,500 that do not meet FHA guidelines, your clients have to put down 20% if they don't have great income and excellent credit.

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TIP OF THE WEEK : "WHY POINTS MAKE SO MUCH SENSE TODAY"

It used to be that whenever you spoke with a borrower who wanted to negotiate or get the best deal possible, the first thing he would say is "No points!! I want a loan with no points."

As most educated borrowers understand, the rate you get on a "no point" loan is higher than one with a point. As soon as you show the borrower the difference, most choose the point, especially if the seller is paying the closing costs.

In today's lending environment, we are seeing unprecedented "compression" within the conforming 30 year fixed loan market.

Historically, the conforming fixed 30 year loan has run at a cost of .375 to .500 point for each .125% discount in rate. This means for every one point you would pay on the front, you could expect to see your rate decrease by .250% or so.

For example, if the rate were 6.000% with no points, it would 5.750% with one point. It would be 5.500% with 2 points. 5.250% with 3 points and so on.

In the current rate environment we're seeing a cost of .125 to .250 to buy down the rate .125% in some cases.

Points paid by the borrower today will now go much farther in reducing the rate on the conforming 30 year fixed than before the current market rally. You get nearly DOUBLE the value for paying points today.

In plain English?? Today if you look at the 30 year fixed at 5.250% at no points, if you pay one point, you will get it at 4.625%.

Points go a lot farther in today's rate world than they did prior to this historic drop. Use them wisely to benefit you!

Try and get 4% from the seller for closing costs and apply 2 points to rate buydown or convince the borrower to use his earnest for rate buydown. You can then get your clients a 30 year fixed rate for close to 4.000% today by doing so.

That's a powerful sales tool in today's market!!!

Las Vegas home sales declined 2% from October to November. Condo prices have fallen 18% from prior month. The medium sales price for single family home is $186,000 contributed by falling prices in the North and East. A total of 2,183 single family homes were sold in November just 258 shy of November 2005. Call 702-212-2288 for information on how to generate positive cash flow in a today's market.

Go get your $7,500 15-year interest free loan from the government

Tax credit offered to new homebuyers

Expires June 30, 2009!

1. Who is eligible?
   • First-time homebuyers or any homebuyers who have not owned a principal residence in the last three years
2. How does it work?
   • Eligible purchasers can claim the $7,500 credit on their annual tax return form.

•· Amount of credit: 10% of cost of home or a maximum of $7,500

1. Repayment:
   • Two years after the credit is claimed, the homebuyer will have to start paying it back.
   • 15 equal annual installments will have to be paid back to the IRS every year.

•· 6.67% of the borrowed amount or a maximum of $502

1. • If home is sold before 15 years, the remainder of the loan will have to be repaid to the IRS upon the sale.

•· Part of the liability can be forgiven if the gain on the sale is less than the amount of the loan.

1. Restrictions:
   • Home purchase time limit:

•· Homes purchased on or after April 9, 2008 and before July 1, 2009

1. • Home must be a single family residence (including condos, coops) that will be used as a principal residence.
   • Home must be located in the United States.
   • Home cannot be financed through mortgage revenue bonds.
   • Income restriction:

•· To qualify for full $7,500 credit, the taxpayer must make no more than

•a. $75,000 for single returns

•b. $150,000 for joint returns

•· To still qualify for credit but at a lesser amount, the following income caps apply

•a. $95,000 for single returns

•b. $170,000 for joint returns