In todays market the question actually seems to come up more often than before..”Is it better to Rent or Buy”?

Even with the great loss in home owners equity the answer hasn’t changed. Let me explain. Most people who are renting only consider the difference between the amount of their monthly payment vs the amount of a house payment..if the rental amount is less..then that is how they feel they are doing as well or better than a home buyer!

Of course each person has a different tax profile and should consider talking to their accountant..in most cases you can normally reduce your withholding taxes because the interest on your mortgage is tax deductible. Locking in a fixed monthly payment for 15/30 years is the key. Rent payments tend to keep pace with the economy and inflation. If you calculate your rent payments over 20 years with a 2.82 percent inflation rate, your rental payment would have increased from $1,000 per month to $1564 per month..where a comparable fixed mortgage payment would have stayed steady and you wouldn’t have payed out an extra $6768. per year paying rent!

Of course, there are other costs of homeownership to consider, such as home owners associations property taxes and utility bills.

So..for some individuals, this may be the best reason to purchase real estate. If you hold your porperty for long term, it will normally keep pace with inflation creating you additional wealth. If you rent, you pay off your landlord’s mortgage and make him or her wealthy. This may be one of the best reasons that homeownership remains an American ideal ..and the norm.. It may also explain..why Lowes and Home Depot and the rest of the DIY stores “are there for you”..not to mention all the “honey do” lists that are created by homeownership..if you deduct those purchases from your estimated increase of wealth..you might find yourself just breaking even with renting.. but you will have all that satisfaction of working on your house each weekend instead of playing GOLF!
(some information quoted from Bernice Ross, Inman News)

The local Las Vegas Market has had some positive air time from GLVAR and local news channels about the number of homes being sold and the rise in prices of nearly 2%! Prices rising for the first time in many months. The buyers seem to be primarily new/first time buyers and investment groups and the moving of inventory from Builders for New Homes. There are many “traditional” listings on the market without the dreaded Short Sale and or REO label..All good signs, and yet…

Many homeowners are waiting for the next Libor release soon to come before the end of the year. Should the interest rates rise the reset of their Interest Only and ARM loans may eclipse what they can afford to pay for the first six months of 2010. Even a $300.00 bump could send many of them packing and looking for rentals before their families are uprooted. If an upward trend of the interest rate should happen..then the 2nd increase house payments.. due July 2010..we might see the local housing market shudder and stumble again.

There is no doom and gloom here or running screaming..”the sky is falling”, but there needs to be a reality check and a reminder to agents and lenders alike..about being ethical in how they present opotions for the homeowner and buyers.. when taking Listings and making offers..

On a continued observation of the banking system and their requirements for borrowers, they have not lessended and in many cases have become obstructive. Also, appraisers are fearful of making less than very conservative appraisals as they have become a target for investigation as the cause and effect of the last “bubble” is reviewed by those seeking deficiency. Which is a whole other topic.. as the Deficiency laws that have been engaged do not cover the loans that were made prior to October 1st 2009. Also the Lenders will utilize the deficiency and promissory notes to recoup the difference between the loan amount and the sale amount..So..with all the new positive spin on the local market we are not out of the woods and that light at the end of the tunnel might just be the next train coming with more Foreclosures aboard!

There is a short period of time between a Short Sale and the loss of patience of Buyers and Sellers and not to mention Realtors. Having walked thru several of them and fought my way thru the back doors and rooms of the darkened Bank Vaults..looking for Asset Managers that really have the authority to move the property from the darkness into the light of COE..The level of frustration gets pretty intense and often the Buyer and the Seller will turn to their Agent/Realtor and they want to “know today what is happening!” It would be so easy to give them what they want..a DATE..and then hope the property really was released for closing by then..Unfortunately, there just isn’t a Contract until both parties have signed! Not just the Seller but until a “person with authority to bind the seller actually signs the purchase agreement, counteroffers and or addenda, there is NO DEAL! Buyers should not “get their hopes up” until they have received a fully executed agreement. So..throw the clock away and take a patience pill and with alot of pushing and shoving it will get done, if at all possible. Short cuts on Short Sales usually don’t stop the clock..they make it run longer!

Home Resale Decline in August

If not only of the 2.7 percent drop of the home sales in August from that of July, the real estate market could have been in a much better condition. Last year’s sales were recorded to have been 2 percent much more advanced than that of this year, having this years’ average value of $177,700.

Considering the increasing numbers of individuals losing their job, many of them could not anymore manage to invest even if prices have gone short. Others, on the other hand are still waiting for the lowest possible prices an agent can offer before purchasing. Therefore, more short sales likely await us for the coming year.

Government project such as the $8000 tax credit for new homeowners had served as a stimulus for buyers in helping our economy achieve a state of self – recovery or sustainability in the real estate industry. But given the figures, we haven’t reached that yet as what Lawrence Yun, the National Association Realtors chief economist settled; even so, realtors mark this drop temporary.

Consequently, many had been wondering of what could possibly occur next in the real estate market as the $8000 tax cred

First-time home buyers hurries to avail tax credit

As the expiration of the $8,000 tax credit draws near, first-time home buyers are scrambling to qualify, this according to Las Vegas  Review-Journal.  

Dec. 1 of this year is the expiration of the Federal government’s $8,000 tax credit for first-time home buyers.

Although the expiry date is Dec. 1, to avail on this tax credit, transfer of title to the new homeowner must be recorded not later than Nov. 30.

It takes about 30-40 days, meanwhile, for a normal home sale to be completed, the news organization reported.    

The $8,000 tax credit can be availed by a home buyer  who has not owned a home in the past three years. This tax credit is authorized under the American Recovery and Reinvestment Act of 2009.

Las Vegas  Review-Journal reported that majority of the  first-time home buyers avail the Federal Housing Administration loans. These Federal Housing Administration loans comprised 28 percent of home sales in August, the news organization said.

The news organization added that of the total home sales in August, 23 percent were conventional loans, 5 percent were Veterans Affairs loans and  42 percent were cash transactions.
 
As the median price of  existing homes in Las Vegas is less than $135,000, an $8,000 tax credit is a big consideration for first-time home buyers, the news organization said.
And as the tax credit expiration date for first-time buyers draws nears, realtors associations have been lobbying to Congress for an extension period of the tax credit. Lobbyists are also pressing to increase the tax credit to $15,000 and expand the coverage of the tax credit, not only to first-time buyers, but also to all types of home buyers.

Nevada foreclosure activity decreases by 8%

Foreclosure activity in August in Nevada may have plunged a few percent, but Nevada still posted the nation’s highest number of foreclosure filing, this according to data aggregator RealtryTrac.

According to Las Vegas-based SalesTraq, there is a continuous supply of home repos on the Las Vegas real estate market.

RealtryTrac reported that one in every 62 housing units in Nevada received a foreclosure filing for the month of August. This translates to 17,902 Nevada properties receiving foreclosure filing during the month of August.

RealtryTrac added that Nevada foreclosure data as of the month of August is 8 percent less as compared to the July foreclosure data. The August foreclosure data on Nevada is 53 percent up compared to data in August 2008. 

RealtyTrac defines foreclosure filings as default notices, scheduled auctions and bank repossessions.
 
Next to Nevada in terms of foreclosure rate is Florida. One in every 140 housing units in Florida received a foreclosure filing. California posted the nation’s 3rd highest foreclosure rate. One in every 144 housing units in California received a foreclosure filing. For the same period, Arizona posted the nation’s 4th highest foreclosure rate. In August, one in every 150 housing units in Arizona received a foreclosure filing.

RealtyTrac reported that in the entire U.S., one in 357 housing units received a foreclosure filing in August. This translates to 358,471 U.S. properties receiving foreclosure filings for the month of August. This data is one percent less as compared to the data in August of last year.

In a statement, chief executive officer of RealtyTrac James J. Saccacio said, “The August report demonstrates that there is still an ample supply of properties filling the foreclosure pipeline even while the outflow of bank-owned REO properties onto the resale market is being more carefully regulated.”

Saccacio added, “After hitting a high for the year in July, REOs dropped 13 percent in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time.”