We believe it’s simply to early to tell what recent $750B Federal Government Bailout will mean to Las Vegas Real Estate – we think over the long run it may be easier for consumers with good credit to get loans and harder for those with bad credit. Murky picture to say the least.
Las Vegas is perhaps the epicenter of the housing market financial mess caused by numerous companies and the government shares some blame as well. We had unscrupulous companies/individuals giving consumers home loans who had no business getting one and now we are all paying the price for this corporate greed!
Single-family home prices in Las Vegas are down 30 percent from last year, although the flip side to this is the affordability of Las Vegas real estate, which is in turn driving sales. Las Vegas Foreclosures are driving the Las Vegas real estate market, as two out of three homes sold here were last owned by the banks, and 25,000 units sit vacant.
Financial experts are telling us that potential home buyers here in Las Vegas are having a difficult time getting financing. As banks have run out of money they have tightened their lending qualifications and are sitting on their cash in case they need it to fund ongoing operations – they are getting very/very finicky in terms of who they want to lend money to.
That’s particularly true for “jumbo” loans — loans that exceed $417,000 — and loans for condo-hotels and for foreign nationals seeking to buy property. Although we are working with many foreign nationals and are finding that we can get financing for them, although a larger down payment is the order of the day to close a Las Vegas real estate deal.
For potential buyers with good credit who can afford a big down payment, conditions eased somewhat a few weeks ago when the federal government announced it would take over the failing mortgage lenders Fannie Mae and Freddie Mac. This has also driven down mortgage rates, which has been a good thing for the overall Las Vegas real estate market.
What is good credit these days in our chaotic Las Vegas real estate market and where has the needle moved to on the credit wheel? The definition of “good credit,” has risen from a credit score of 650 to 720. This reflects a health increase in a matter of 6-12 months.
So where does this leave us? Well here in late September the picture is a bit murky! Economists are our local business leaders are telling us the proposed Government Bailout should help by creating a more dynamic lending market, as banks offload some of their bad securities to the government.
This will in turn free up some of the bank’s capital that can be put to good use in the marketplace by extending loans to consumers who want to buy Las Vegas Real Estate.
