Las Vegas Real Estate Blog

Reuters in conjunction with the University of Michigan conducted a survey that found the majority of U.S. homeowners expect no change in the value of their homes in 2007.

Around 55% of homeowners expect no change in the value of their home.  Seven percent of those who responded expect the value of their home to decrease.  The remainder of respondents expect an increase.

Homeowners generally are expecting a slight median price increase of 0.1%. That would represent a slowing in expected price appreciation from recent double-digit increases.  The result of this slower price appreciation will probably be that the typical homeowner  will think twice about borrowing against the equity in their home.

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Six new classic models are now available in the north Las Vegas neighborhood of Vienna Hills.  With a nod to the musical masters, Richmond American introduces the Mozart, Haydn, Schonberg, Brahms, Schubert and Strauss floor models.

Priced from the $350,000s, the homes range from 2,350 to 3,800 square feet, offering three to six bedrooms and 2 1/2 to 5 1/2 baths. The homes are two-story designs, featuring arched entries and attached three-car garages.

The Vienna Hills neighborhood amenities will include a walkway and park areas, along with proximity to a new elementary school.

For additional information on the neighborhood or any one of the six floor plans, contact MillionsaverHomes at 702.212.3513.

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When the National Association of Realtors released their home sales report for January 2007, their top analyst David Lereah blamed the declining sales on the weather:

“We are seeing temporary near-term weather disruptions in much of the country… As a result of these weather disruptions, it may take a couple months for the picture to fully clarify, but a modest recovery is likely…The rapid shift in January to frigid air in much of the country had a cooling affect on home shopping that went beyond normal seasonal factors, … Weather disruptions have continued since.â€?

The sales index showed decline in all 4 regions in January 2007 compared to January 2006:

• The Northeast region was down 1.3%.
• The West region was down 7.0%.
• The Midwest region was down 10.8%.
• The South region was down 11.8%.

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Credit Suisse analyst Ivy Zelman recently published his research that the rapid decline of the subprime mortgage industry would lead to another drop in new home sales in 2007.  Based largely upon research taken from surveys with homebuilders and mortgage originators,  Zelman predicts that the current trend of credit tightening for risky borrowers will make it harder for many buyers to get financing, leading to a 20% drop in sales to about 890,000.

Following a “housing food chain” theory, Zelman believes that because there will be a a lack of entry-level buyers (the bulk of subprime loan candidates), it will make it harder for second-tier buyers to upgrade their homes.   Furthermore, he believes that increased delinquencies and foreclosures will add another 20% to existing inventories.

His bottom line:  a rebound in housing demand in 2007 is “premature”.

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KB Home has opened its first luxury community in the U.S. at La Vita at Seven Hills in Henderson. KB Home plans to sell 33 semi-custom homes with prices ranging from $1.4 million to more than $2 million.

La Vita at Seven Hills is an 20-acre gated community in the Black Mountain foothills overlooking the Rio Secco Golf Club. Homes will range from 4,500 to 8,500 square feet on lots measuring one-quarter acre to one-half acre.

KB Home executives note that interest for the project is high. More than 600 people signed up on a list. While the prices are set, KB does say it will entertain multiple offers if more then one buyer expresses an interest in a particular lot.

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Have you had an opportunity to check out the new floor models available in the Franklin Park community? As previously mentioned, Toll Brothers recently debuted new models in two of its home collections in Franklin Park at Providence, a new master planned community in northwest Las Vegas and they are definitely worth a look.The single-family, two-story models in the Balboa Collection include the Miramar, Solano, Sonoma and Verano floor collections. These homes offer anywhere from 2,494 to more than 3,000 sq. ft. of living space, priced from the upper $400,000s.

Debuting in the Carriage collection are the Terracina and Savona floor plans Sarting in the low $500,000s, the homes range from 2,812 to 3,300 square feet. The Terracina model even includes a third-floor option that is accessed from the master suite.

For more information on Franklin Park or any of these models, contact MillionSaverHomes at 702.212.3513.

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Sometimes its hard to get a straight answer when even the experts can’t seem to agree…

If you are an optimist always seeing the cup as half full, then you’ll applaud the recent findings by Foreclosures.com that found foreclosure dropped nationwide. Yes, in fact, they are down for the second month in a row. Filings in February 2007 were down 3.4% from January, and down 6.5% from December 2006. Foreclosures.com president Alexis McGhee believes that the falling foreclosure number is beginning to signal a stabilization in the housing market.

Now, if your a bit of a pessimist who sees that glass as half empty then you are likely to believe a recent RealtyTrac report that noted new foreclosure filings nationwide in January 2007, were up 25% from the same time last year. RealtyTrac’s CEO James Saccacio is quoted as saying “January’s foreclosure number represented the highest monthly number we’ve seen since we began issuing this report two years ago.

Confusion anyone? I guess its nice to see that the average consumer isn’t the only one experiencing a little confusion over the current state of the housing market.

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A recent news story on KSBY 6 reported that home appreciation slowed dramatically from two years ago and turned negative in some parts of Las Vegas last year. Those are the findings of local housing analyst Larry Murphy with SalesTraq.

When looking at the Las Vegas Valley area, he found that 35 areas showed positive appreciation, 7 were unchanged and 10 experienced falling home prices. The Las Vegas National Association of Realtors also noted a 2.6% drop in median home prices in January 2007. The median price was listed as $302,000.

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According to National Association of Insurance Commissionrs, the average cost to insure a U.S. home in 2004 (most recent year data available) was $729.  Some states find themselves paying more while others pay less.  The top ten states and their average annual premiums are as follows:

1. Texas:  $1362
2. Louisiana:  $1074
3. Oklahoma:  $991
4. Florida:  $929
5. Mississippi:  $907
6. District of Columbia:  $894
7. California:  $835
8. Kansas:  $833
9. Colorado:  $811
10. Alaska:  $810

The state with the lowest premium is Idaho.  The average annual premium is just $448.

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Subprime lending - lending to consumers who are classifed as having low credit score - soared from $150 billion in 2000 to $650 billion in 2005.   For many first time home buyers who lacked good credit, borrowing from a subprime lender afforded the only option they had to owning a home.  However, it came with a high price tag, and not just in terms of the higher interest rate many pay.

Four out of five subprime loans carry floating interest rates that, after the first year or two, change every 12 months as short-term interest rates fluctuate. Many homeowners who received these types of loans in 2005 are now finding their monthly payments rising by 30% to 50%.  The result is  that many are falling behind in  their payments.

Unfortunately, they do not even have the option to attempt to refinance to conventional fixed-rate loans with lower interest rates because approximately 70% of subprime loans also have prepayment penalties that make it too expensive for homeowners to refinance.

By late 2006, the default and delinquency rate in this mortgage category had jumped to  12.6%.   Not only is this significantly impacting investors, but also lenders in the subprime mortgage market and large financial institutions who purchased many of these loans as well.

Many experts believe that the impact of the subprime mortgage market and the decline in the housing market signal more rough times ahead not just in the housing market, but for the economy as well.

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