Buying a first home: Las Vegas

[RikaKazak]

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I think you should hold off buying for a few more years. I have a feeling vegas RE hasnt gone down nearly as far as it will.

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FYP

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I agree

The wife and I decided to buy a condo in Vegas as our "vacation home" however after researching the market I've decided that it'd be foolish to buy in this market and will "reevaluate" in 6 months (basically we will be buying one eventually just not until I think the market is "recovered/ok").

It's ultimately up to you though, so with that said.... with your credit score, and % you're putting down, if you do choose to buy a home in Vegas you will not have a problem getting a loan. And there will be no need for your parents to cosign. However if they do cosign (I'm assuming good credit scores and good job history etc. etc.) you'll get better rates, but it's not necessary at all.

hope that helps

[pig4bill]

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Jimbo, in your example you have to also take into account that prices may fall even lower if interest rates rise because that too changes the rent vs. buy calculation. So basically its a wash.

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Your payment MIGHT be a wash, but you will probably owe a lot less if you wait a year or two. If you have to sell or want to refi if rates drop again, the amount owed on the house will be lower. You'll net more cash in a sale and if you refi at a lower rate, your payment will drop.

For people that think prices are already low, I nearly bought a brand new house near Summerlin in the late 90's for a hundred grand.

[Statutory]

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Just rent for now. Prices are sick low anyway.

If things go bad with poker, you might turn into one of those super motivated sellers and lose a lot of money. And anyways market doesnt seem bottomed out yet. Supply lot bigger than demand.

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I'm outrage an ex-owner of a lambo says this! [img]/images/graemlins/cool.gif[/img]

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what happended to the lambo?

[eastbay]

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http://macromarkets.com/csi_housing/MSA/las_vegas.asp

Check out where prices are headed in Vegas. You might want to wait awhile.

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I respectfully disagree that that chart shows "where prices are headed", although it is my opinion that median prices will continue to decline for another year or so.

On a 5 year chart, RE appreciation in LV is in line with commodities and nearly in line with stocks.

On a 10 year chart, you're normalizing against the dead bottom of the fallout from the 1990 RE crash, circa 1997, and near the blow-off top of the stock market. Of course it's going to look silly when you pick those as "equal" starting points, because they were not.

These charts that average over everything in an entire area also miss the point that there are currently very wide differences in value at the same point in time. You could easily get ripped off in LV, in fact most properties are almost certainly rip-offs at current asking prices. That doesn't mean there will be zero opportunities for a good entry point for the long haul.

eastbay

[eastbay]

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If you save $20,000 on a $400K home (5% decline) by waiting 12 months, but in that time the going rate on a mortgage increases by 1% (from 6.5% to 7.5%) the increase in monthly payments will eat away the costs savings in less than 7 years of payments. While we are in a time of historically high housing prices, we are also in a time of historically low interest rates. Just something else to think about if we are recommending trying to time markets.


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This argument doesn't really hold water, because prices are highly correlated with rates (inversely, of course). If rates surge, prices will fall even further. People choose their price point by their monthly PITI.

eastbay

[Tappy Tibbons]

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http://macromarkets.com/csi_housing/MSA/las_vegas.asp

Check out where prices are headed in Vegas. You might want to wait awhile.

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Yes, and don't forget to chase your gutshot draws. You're long overdue hit and make a killing.

[eastbay]

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The real recovery IMHO will not be when buyers return,but when credit standards are loosened on the consumers end,and that has already started with last months .50% Fed cut!


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In my area, I believe the ballooning of the jumbo rates is very meaningful. Since median prices are way above 417k, a great deal of loans need to be jumbo, or other "tricks" need to be played. With the "trick bag" dried up, it's the jumbo rates that have a great many otherwise willing buyers on the sidelines. If the currently ridiculous (IMO) premium comes off of the jumbo rates in the next 6 mo. to a year, IMO this period will have been a narrow window where a market "dislocation" created a great opportunity for the very few who have the cash to put down 150k+ on top of a conforming loan, because the pool of buyers is artificially and temporarily low. Heck, cops make six figures around here. Add a wife's teacher's salary and $500k is a blue collar buying range, it is simply not an expensive house or a large loan for the incomes in this area. Jumbo rates have already started to trend back in-line with conforming rates.

Also, reading this thread I'm reminded of the old saying about when to be greedy and when to be fearful. It's practically viral that you "have to be on the sidelines" now, almost as bad as it was viral that you "had to get in or be priced out forever" two years ago. The virus was wrong then, and I believe it's wrong now.

eastbay

[quadzilla]

My question is for the people in the buy now camp is what do you see that could drive the prices higher in the next few years?

I was a mortgage broker during the boom and this is my take on the situation. When the market was hot I could put a loan through for anyone. The subprime portion is obvious but, the big issue to me where the loans I was putting through for conforming borrowers at that time. The majority of borrowers that I saw in my area (Chicago) put little or no money down and took an interest only ARM. In most cases they couldn't even afford a fully ammoratized loan. I did very few loans where someone had 20% down and they took a fixed loan and had no problem making the payment. Then there were the No Doc, Lo Doc, Neg Amm and other programs that just seemed crazy even at the time. These programs created an artificial demand that drove the prices so high. A 5 year arm is about the same as a 30 year fixed loan right now and I don't think the majority of these other programs exist any longer.

I am no longer in the mortgage biz but, maybe someone who is can say how easy/hard it is for the average consumer to get a 100% LTV loan or a no doc/ lo doc loan etc. If banks want people to put money down I don't see how the demand can catch up any time in the near future.

I think the prices still have a long way to drop but, even if they don't can anyone give a compelling reason why they would be any higher than they are now in the next few years?

[Taylor Caby]

I'm not sure if this is relevant, but I had an interesting recent experience with refinancing my mortage

At the end of September, I got a new loan (to get out of the ARM that for some reason I was put in). The interesting thing is that they gave me 6% fixed, no prepayment penalty, STATED INCOME loan. This is Countrywide of all people, who got themselves into a ton of trouble partially by doing things like this. Granted, my stated income is very high for the size of the loan I have, but I'm still in my early 20's and self employed so I should be a high risk and I doubt they should just take my word for it.

So I guess this is a little off topic, but it still seems like some of these mortgage companies are loaning out money a little bit too freely. I don't know exactly what, if any, implications this will have on the market.

tc

[quadzilla]

TC,

Did you have more than 20% equity? If you did and also had a decent credit score then this would make perfect sense. I bought my place in '03 when I was flat broke with no money down. I refinanced in 6 months and I got 3.5% on a 5 year arm and an equity line for the remainder. That was an example of banks lending money too freely.

Good2cu,

Just rent some sick condo on the strip. That would be more balla than buying a place anyway.