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This is exactly what is happening to my nephew and his wife. The kids got an FHA loan but they getting tired (and quite despondent) of getting outbid for homes, plus, people coming in with all cash and those bids getting accepted first.
They won't settle for a fixer upper or a house that is missing appliances, countertops, need landscaping, etc.
They're going to rent over at the Red Rock Villa's and wait it out a bit. Prices shouldn't increase in a year, hopefully, they'll even come down a bit.
Never been in a housing market like this one before. We have bought new builds before so it was a first time trying to buy a resale. Lots of investors out there trying to scoop up deals. A coworker of my husband had a bid on a house that we had put a bid on and we both lost out on it and they had a conventional loan. It was sold to a cash buyer. We sold a house elsewhere recently for a huge loss so with that in mind we decided to rent and see what happens. I don't see huge price increases in this market anytime soon so why not wait? Good for your nephew and his wife!
I think almost all current Nevada residents are hoping they wont come down any further.
I made that comment from my nephew's perspective. He was thinking he was going to be able to snatch up a 4 bdrm, over 2100 sf move in ready home in perfect condition in a older community of Summerlin for under $200,000.
He was quite surprised to say the least, even though we told him otherwise. If the prices come down, he can afford something nice and not have to settle on a much smaller home.
And yes, for us residents (especially the ones who recently bought) we don't need the prices to go any lower!
I am trying to use a VA Loan to buy a house but am having problems. When I find a house and get all the paperwork done, the VA wants an appraisal done. So far the appraisals have been much lower than what the seller wants and the deal goes south. Houses here are low, but unfortunately the sellers have unrealistic prices, even the lower priced ones. The last house, the seller wanted $80K and the house appraised at $65K so no deal since the seller refused to lower the price to what the VA would loan.
Another thing I have noticed is that the banks list a house at one price but then wait and it turns into a silent auction finally going to whoever will make the highest offer. Sounds like shady business practices to me. If I advertise something and put a price on it, I should be selling at that price instead of telling the person who shows up to buy it that the price was just to get someone to make an offer and I am waiting for a better price.
Instead of releasing houses the banks only release a few, keeping the prices artificially high and hard to get even in the lousy market.
You need to go HUD or one of the other owner occupant only schemes. You can bid VA or FHA against investors only if you are willing to add cash. You are also safe on a HUD as the list price is the appraisal.
Appraisals at the moment are running very conservative so the investors simply outbid them.
The banks have no significant inventory. That is all folklore. They do appear to be having difficulty with the mediation requirement. But that slows or prevents foreclosure.
Yeah, everyone knows the banks have plumb run out of foreclosure inventory. Prices have managed to fall during the most robust demand cycle Vegas has seen since the bubble itself, because there's no foreclosure inventory left. Something's got to give!
A couple of issues not being addressed as to why the lack of or reduction of REO inventory in Vegas or almost anywhere in the country, including my farming area, was the packaging of bulk REO's to large investor groups.
100+ million dollar packages are being offered by the banks to inside investors connected with Freddy and Fanny who have shown the absolute ability to close on their deals. In some weird way this is a win - win for both sides of the deal but a loser for the rest of the home financed population.
For the banks, though they are losing billions on the reduction of value of the real estate as well as the book value of their assets they are preventing the markets from an even larger wholesale landslide in prices as these products never hit the multiples thus they are not used to establish comps.
For the big time, hundred or more million dollar, investor groups, they are purchasing real estate for 30 - 40 % discounts based on today's appraisals. These appraisals, as we know, are already conservative at best as none of the appraisers want to be guilty of inflating prices and tend to reflect pricing probably lower than market.
We now have an interesting Government funded program called Home Path which provides incentives and requires these huge investor groups to sell a percentage of these portfolio purchases to only owner occupied individuals. I believe its around 60% of the portfolio must go to owner occupied.
Interestingly enough the short term damage by the Home Path Gov't. guaranteed home loans to owner occupiers, who only need to come up with 3% down,
(Gee, where have we seen that before) is to drive up home pricing once it really gets going. Once again the Government is going to artificially inflate the owner occupied market rather than let market conditions do it naturally. This will benefit banks whose remaining REO portfolios will actually gain value in the long run as sales of Home Path properties will drive up prices again.
I am just now seeing the effects of the Home Path situation in my farmed area where the first unit, from a bulk purchase, sold in 9 days for almost 30% more than the highest comp. in the last 3 months. I was able to look at the house before it sold and it was in the same condition, no better no worse, than anything that had sold. Since it was a Home Path loan the buyer only had to come up with 3% down and the payments were based on a fair interest rate. The Investor/Seller is tickled pink and will have even more monies to spend on bulk purchases from banks.
It appears as if the bulk purchaser is being smart and releasing these houses slowly to insure a maximum return on investment and to keep prices up in an already inventory lacking, lower priced market. Brilliant.
I did a long and serious drive around of Vegas REO's this last weekend.
There IS inventory but the buyer has to be very wary. However, an investor who has ability and is interested in doing their own fixups can make some lowball offers, especially in not so nice neighborhoods, and can make some money on the flip. We were looking at the 29,000 to 49,000 asking prices and saw a ton of junk as well as a few promising items. Making rediculous, low ball offers, on properties which have been on the market for some time is a great way to go and many folks have full cash ability in these markets. Offering 50% less or more on the asking is worth a shot. Go directly to the Sellers agent. You are buying these properties as is but you can still have a window for inspection. You never know.
We also looked at the 100 - 200 thousand range. Unfortunately I was too late on one I had heard about that asked 140,000 but is in escrow for around 200,000. It was 3800 sq. ft., Had a huge pool, tennis court and giant lot on an okay cul d sac. It was the product of a bidding war but someone got a great deal. The house itself, as someone I knew went inside, only required less than 20 thousand to fix up nicely for those of us who know how to do such things. Contractors would probably charge 80 - 100 thousand. There are deals out there.
None the less, think about the short and long term effects of HOME PATH. Vegas may or may not be the place to put your investment monies but it will be affecting the community one way or the other. My opinion is it will be causing home prices to go up in the near future as these Large investor deals are culminated and the properties begin to appear on the market with great financing. Ask your agents (Assuming you have a really knowledgeably agent) if they know of any Home Path dealings going on. It might be a good time to consider investing if you believe Home Path is coming to your area. Once Home Path homes are on the market the rest of you will have a miserable time getting into a property at a reasonable price. We will see.
Long term will depend on how many of those same Home Path buyers default on their loans. Hopefully not too many but we will see how high the artificially inflated prices go up. Once pricing exceeds the amount you can get for rent to cover your costs/morgage its time to be wary.
Sorry but homepath is the trade name under which Fannie May sells foreclosures...no third parties. YOu buy from Fannie and Fannie provides financing. They have been around for a while...go to
Note however these are all Fannie owned and are offered at mostly market kind of prices with low down.
There are no bulk transfers of REOs. They would show. There were some trustee sales where non lenders purchased cheap product perhaps with lender agreement...but those appear to have stopped or slowed way down.
The market has had stable pricing for the last 7 or 8 months as it bounces along the bottom. It appears up in February though not a lot. The percentage REO is dropping and is now around 50%. If the supply of REOs continues throttling back we are going to see lower volumes and likely some small price increases.
As to good buys well below list don't hold your breath. For the Feb SFR REO sales below $50,000 there were 91. Of these 91 none sold below 50% of list. 3 sold below 80% of list. 15 below 90%. 36 below 100%. So roughly 60% are going at list or over and only a tiny fraction are deep discounted.
[quote=olecapt;13159297]Sorry but homepath is the trade name under which Fannie May sells foreclosures...no third parties. YOu buy from Fannie and Fannie provides financing. They have been around for a while...go to
Note however these are all Fannie owned and are offered at mostly market kind of prices with low down.
There are no bulk transfers of REOs. They would show. There were some trustee sales where non lenders purchased cheap product perhaps with lender agreement...but those appear to have stopped or slowed way down.
The market has had stable pricing for the last 7 or 8 months as it bounces along the bottom. It appears up in February though not a lot. The percentage REO is dropping and is now around 50%. If the supply of REOs continues throttling back we are going to see lower volumes and likely some small price increases.
Lets see, To use your quote "Don't hold your breath" yet you cite facts that 9 residences(approximately 10% of the sales)sold below 50% of list. Thank you for once again making my point. I guess now a few more folks may actually hold their breaths too.
Once again Ole Cap't, YOU are not in a position to know about inside deals on Home Path. These are closed deals and not open to the public. I do not know how else to state this and it is not intended to be derogatory but you are way on the outside and not even looking in. I do not talk about things I have not personally experienced so please do not attempt to tell me I am wrong.
You have no response to houses which were vacant a month ago suddenly having new buyers or renters moving in yet there was never a "For Sale" sign. Maaan. Open your eyes and ears and listen for a change to someone who just might know a bit more than you. Even if you choose not to listen, which of course is your right Please do not try to disuade others from trying to earn extra monies and perhaps learn something. I continue to learn about changes in this market every day.
Of course, to add to this conversation, I am in escrow on a SFD short sale, that is 40% below the latest comps. This would be my 4th impossible deal in the last 6 months just in that one area. Geeeeez. I do not mind sharing the information I have learned over the nearly 4 decades I have been doing this and frankly it is those brokers who refuse to change with the times who have little or nothing to offer their clients. I have never found a market yet that did not have great deals for those willing to work hard to find them. WOW.
Lets see, To use your quote "Don't hold your breath" yet you cite facts that 9 residences(approximately 10% of the sales)sold below 50% of list. Thank you for once again making my point. I guess now a few more folks may actually hold their breaths too.
Fish - It was none not nine. In general everything sold within 10% of list with only a couple of outriders.
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Once again Ole Cap't, YOU are not in a position to know about inside deals on Home Path. These are closed deals and not open to the public. I do not know how else to state this and it is not intended to be derogatory but you are way on the outside and not even looking in. I do not talk about things I have not personally experienced so please do not attempt to tell me I am wrong.
Fish - These are matters of public record. They cannot sell it to someone else if they don't own it...They don't own it Fish.
Quote:
You have no response to houses which were vacant a month ago suddenly having new buyers or renters moving in yet there was never a "For Sale" sign. Maaan. Open your eyes and ears and listen for a change to someone who just might know a bit more than you. Even if you choose not to listen, which of course is your right Please do not try to disuade others from trying to earn extra monies and perhaps learn something. I continue to learn about changes in this market every day.
Fish - All properties are owned by somebody. I am out there every day looking at places. I know some neighborhoods to every house. In a couple of places I actually know the history of every house. I know how the system works and how it is scammed. If you find evidence of this I will be glad to look. Cite a couple of addresses FOD. Make it easy for everybody to see.
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Of course, to add to this conversation, I am in escrow on a SFD short sale, that is 40% below the latest comps. This would be my 4th impossible deal in the last 6 months just in that one area. Geeeeez. I do not mind sharing the information I have learned over the nearly 4 decades I have been doing this and frankly it is those brokers who refuse to change with the times who have little or nothing to offer their clients. I have never found a market yet that did not have great deals for those willing to work hard to find them. WOW.
I root for you FOD...however they last 15 or 20 deals where I was way below list did not work. But I really do wish they would. So if you can make it happen I will look them up and try your way.
Looks like Fishordie read the post by Olecapt: "Of these 91 none sold below 50%" as stating that nine rather none sold below 50% (then went on a tirade about it).
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