Yonas Woldu Greater Las Vegas Real Estate

As President-elect Barack Obama - and the 52% of the electorate who supported him -savor his historic, landslide victory, he is already caught up in the immensity of our economic problems. He cautioned, even before meeting with economic advisors, that the task ahead was too immense to complete in one term. He was elected on a mandate of across-the-board change and made many promises to address issues such as unemployment, healthcare, tax cuts, the mortgage crisis - issues that are crucial to our very survival. Fulfilling the promises will be tough, considering the costs involved in the remedies and considering that we have not hit rock bottom in some areas. To consider just a few issues...

Unemployment. With the recent news that 240,000 jobs were lost in October, the unemployment rate is now 6.5 %, up from 6.1% in September. This translates to over 10 million Americans out of work and struggling to pay their bills and keep up with their mortgages. Some economists predict that the rate could exceed 10% as companies cut their workforces, close stores and plants, or go into bankruptcy. Recent (and additional planned) layoffs in the auto industry will exacerbate the problem

Bailout. Though the Wall Street bailout package passed in early October, the details still need to be worked out by Congress. Additional hands continue to be held out for help. The Big 3 automakers, on the verge of bankruptcy, hope for $25 billion. Taxpayers may need relief but in the long run, they may have to reckon with the bill for the bailout, especially if loans to corporations (and perhaps even to taxpayers) are not repaid.

Housing. Over two million new foreclosures are anticipated by the end of 2009. While refinancing through private (i.e, Countrywide) or public (i.e., Hope for Homeowners type) initiatives might lessen this number, many homeowners will not able to refinance into payments low enough to allow them to stay in their current homes. Would-be homeowners who have lost their jobs or fear they might, aren't likely buyers of homes these people might want to sell in order to prevent foreclosures.

Barack Obama preaches "the audacity of hope." He is drawing together the best minds in America to find ways to approach the crises mentioned above and many others. As an earlier young president said, "a journey of 1,000 miles begins with a single step." When one term may not be enough to fix it all, well-articulated plans broken down into discrete parts with measurable goals is our best chance of realizing the hope and promise of change.

For information on beautiful homes in Clark County, including bank owned properties available at great prices, contact your Prudential Americana Group Realtor® Yonas Woldu at (702) 236-8997 or visit www.VegasRealProperty.com. The N&Y team, lead by partners Nebi Adhanom and Yonas Woldu, is always ready to serve you.

Photo by FloraAshley

With new home sales still down, one bright spot in the Las Vegas local housing market has been sales of existing homes that exceeded 3,000 for the last three months of July, August, and September. Only 461 new housing permits were requested, so YTD totals are down 53%.

About 80% of the sales were for foreclosed homes or short sales. The sellers of the remaining 20% may have been relieved to sell but probably took a price hit. The median price of existing home was $189,000, down 28% or $73,377 from 9/07. Meanwhile, the median price of new home was $251,000, down 20% or $62,480 from 9/07.

Analysts of the local market anticipate that October sales figures will be lower, as less downpayment assistance was available after September 30. People bought while this option was still available. Lisa Jackson of John Burns Real Estate Consulting predicted that the new standard of 3.5% downpayment will hurt housing demand. The recently-passed Emergency Economic Stabilization Act should have contained a "Stay of Execution" for downpayment assistance programs. Efforts to keep such programs alive got lost when national attention shifted to the Wall Street bailout, she said.

Lagging sales of new homes have caused one major area builder, Concordia Homes, to close some sales offices in Southern Nevada and Arizona. At least two small area builders have lost residential lots to creditors.

For information on beautiful homes in Clark County, including bank owned properties available at great prices, contact your Prudential Americana Group Realtor® Yonas Woldu at (702) 236-8997 or visit www.VegasRealProperty.com.

To review new downpayment requirements, see Down Payments Revisited .

"No money down" may have sounded like magic words to home buyers, but according to Jim Pair, president-elect of the National Association of Mortgage Brokers, the magic of 100% financing is gone. "What we're doing now is what we did 10, 15, 20 years ago as far as lending is concerned."

Some have argued, even here on Active Rain, that it's still possible to get 100% financing. A more likely scenario for all but a very few is that the lender will require:

• 3% (soon to be 3.5%) for buyers who can qualify for FHA, which means they have a credit score of over 580.
• 5-10% for buyers with credit scores over 720 (sometime lower if a buyer has additional assets), in need of less than $417,000, and not residing in a "distressed area" with high foreclosure rates and huge price drops
• 10-15% for buyers with credit scores over 720 (sometime lower if buyer has additional assets), in needs of more than $417,000, and needing less than $417,000 but residing in a "distressed areas" with high foreclosure rats and huge price drops
• 15-20% for buyers who need substantially more than $417,000, have credit scores below 720 with no assets, or living in a distressed area
• 20% or more for buyers who need $729,00 or more, have credit scores below 680 and no significant assets, and who want to buy in one of worst distressed areas

No down payment may be a great idea for wealthy buyers who don't want extra cash tied up in housing; up until recently, such deals were available to nearly everybody. Many took the deal because they had little or no money to put down or bought an expensive house in anticipation that they could make the monthly payment.

No down payment loans are viewed as one factor that has made the mortgage crisis worse. No down payment means no equity, so when home values declined, such buyers found themselves with property worth less than what they owed on it. When payments on ARMs escalated, the buyers usually did not have the funds to make the higher payments.

There may still be programs out there that helper lower income buyers put together a down payment, but the private loans available for down payment assistance are no longer available.

For information on beautiful homes in Clark County, including bank owned properties available at great prices, contact your Prudential Americana Group Realtor® Yonas Woldu at (702) 236-8997 or visit www.VegasRealProperty.com.

Mortgage giant Countrywide, now owned by Bank of America, has been the first lender to offer to "hope for homeowners" by voluntarily offering over 4,000,000 mortgage owners the chance to refinance their subprime or option ARM. After settling a lawsuit in California and Illinois by offering this option, Countrywide announced that residents of the nine other states in the suit would be eligible as well; homeowners in other states may be eligible if their states agree to join the suit. The other states currently offering refinancing options are Arizona, Connecticut, Florida, Michigan, North Carolina, Ohio, Texas, and Washington. Of the 11 states, California, Illinois, Ohio, Michigan, and Arizona are the Top 10 list for sates with the highest foreclosures.

Countrywide, the largest originator of prime and subprime mortgages, is a major player in the current mortgage crisis. The program, which will cost Countrywide $8 billion, represents the first time a lender has agreed to mandatory loan modifications. Lenders have been slow to reduce interest and write off debt for Federal programs where participation was voluntary.

Under the terms of the settlement, the bank will suspend foreclosures while homeowners can explore refinancing, set up a relief fund for earlier buyers who lost their homes, and offer relocation assistance to those facing immediate foreclosure. After December 1, Countrywide will renegotiate loan terms so that payments do not exceed 34% of household income and, if possible, be refinanced into a fixed loan backed by FHA, throughout the Hope for Homeowners Program. For those who do not qualify for this federal program, Countrywide will modify terms and interest rates on current loans.

Although the program does not start until next month, homeowners in foreclosure or in need of foreclosure assistance are urged to call Bank of America/ Countrywide at (800) 669-6607 to discuss their options.

For information on beautiful homes in Clark County, including bank owned properties available at great prices, contact your Prudential Americana Group Realtor® Yonas Woldu at (702) 236-8997 or visit www.VegasRealProperty.com.

The Top10 List, as well as the Hope for Homeowners Program are discussed in my earlier blogs Temporary Bad Luck in Las Vegas Real Estate and Hope for Homeowners - a Lifeline for Homeowners

Las Vegas is a popular place to visit and a great place to live, but lately, it has assumed an unwanted #2 place on the Top Ten US cities with the highest foreclosure rates. The State of Nevada is #1 on the list of states with the most foreclosures. Here are some interesting figures from RealTrac complied by http://www.therealestatebloggers.com:

Top 10 Worst Metro Regions For Foreclosures in 3rd Quarter, 2008

1. Stockton, CA 3.69% of homes in foreclosure
2. Las Vegas, NV 3.48% or
3. Riverside / San Bernardino, CA 3.09%
4. Bakersfield, CA 2.58%
5. Fort Lauderdale, FL 2.30%
6. Phoenix / Mesa AZ 2.11%
7. Sacramento, CA 1.97%
8. Orlando, FL 1.87%
9. Fresno, CA 1.68%
10. Oakland, CA 1.64%

Top 10 Worst States For Foreclosures in August, 2008

1. Nevada 1 in 91 homes
2. California 1 in 130 homes
3. Arizona 1 in 182 homes
4. Florida 1 in 194 homes
5. Michigan 1 in 332 homes
6. Georgia 1 in 422 homes
7. Ohio 1 in 444 homes
8. Colorado 1 in 452 homes
9. Illinois 1 in 483 homes
10. Indiana 1 in 522 homes

Nevada has always been a state that invited speculation, especially after vast deposits of silver and gold were uncovered there. After 1849, miners flocked in to make their fortunes; the gambling and prostitution that flourished in the mining camps were later legalized. Later visionaries, sometimes connected with organized crime, took a chance that people would come to the dessert to gamble and built numerous casinos that established the state, notably the Las Vegas area, as a major entertainment destination.

The vibrancy and beauty of the area also attracted residential and commercial real estate developers. Ongoing growth in the area encouraged speculation and housing inflation, especially after 2000. As the mortgage crisis escalate nationwide, Nevada - and in particular, Las Vegas and environs, took a huge hit - hence, the discouraging figures.

As the housing market stabilizes, Las Vegas will undoubtedly emerge stronger from the current crisis; the lure of the area remains. For those interested in Las Vegas real estate now, there are great values available in beautiful areas in Clark County, including Las Vegas itself as well as Henderson and Green Valley.

For information on beautiful homes in Clark County, including bank owned properties available at great prices, contact your Prudential Americana Group Realtor® Yonas Woldu at (702) 236-8997 or visit www.VegasRealProperty.com.