Great Time to Purchase Las Vegas Real Estate!!!

Great Time to Purchase Las Vegas Real Estate!!!

 

How can this be??  The markets are in a turmoil!  We are in the midst of a liquidity and credit crunch!  How can it be a good time to purchase real estate?

 

Last week the Dow Jones Industrial fell on Monday 207.61 points to close at 13,028.92.  On Wednesday, the DJI fell another 167.45 to close at 12,861.47  It hit a low on Thursday to close at 12,845.78, then on Friday the Feds lowered the discount rate by .50 and the market reacted positively to close at 13, 079.08...up 233 points.

 

Inflation remained neutral with wholesale inflation rates up 0.6% (0.1% was expected), but the core wholesale inflation rate (the most important indicator) rose only 0.1% (0.2% was expected).

 

Bonds rose, with the yield on the benchmark 10-year treasury note falling to 4.73% from 4.78% late Monday.  (Mortgage interest rates soften when the bond market rallies)

 

The current financial market upheaval has been fueled by defaults of mortgages primarily in the "Sub-prime" and "Alt A" markets, but has spread to the "Prime" as well as the "Commercial A" paper markets.  Globally, Central banks have injected well over $400 billion USD to keep markets in a "liquid" state.  On Friday, when the Feds lowered the discount rate, they also increased the repayment period from 1-30 days, givng banks a much needed breather to keep themsleves solvent until they can re-balance themselves.  This noticeably helped Countrywide Financial, that had widely be reported to be on the verge of bankruptsy.  It was reported by MoneyNews.com that Countrywide had tapped its entire $11 billion lines of credit to keep itself in a position to operate.  Merrill Lynch downgraded Countrywide to a "Sell".  Other financial institutions, such as Thornburg Mortgage, CitiGroup , Impac Lending are all experiencing significant revenue problems as well.

 

With all this negative news, where is the "Silver Lining"?  Even though parameters in the mortgage industry have tightened, there is still alot of good programs available for individuals who have managed their money and their credit wisely.  Interest rates are holding steady in the "Prime" markets.  We still have interest rates that are at a 20 year historic low.  It is widely expected that the Feds will cut the internal discount rate again in September.  These cuts do not affect the mortgage rates, but do affect revolving debt making it easier to pay off credit cards and other personal loans.  It also gives the banks the ability to stay more liquid thereby allowing more opportunity for lenders to work within their parameters.

 

Las Vegas has been rated to be one of the most resilient Las Vegas real estate markets, nationwide.  Historically, we have seen a resurgence in our Las Vegas real estate markets whenever "Mega-Resorts" open.  Palazzo at the Venetian, is scheduled to open toward the end of this year.  Encore at The Wynn, is scheduled to open in the early part of 2008, and Project City Center is scheduled to open in 2009, with many more projects to open such as Echelon by Boyd Gaming to name just a few.  Our economy is "Job-Driven".  We currently are in a "Buyers Market".  It is definately the time to purchase real estate.  Mortgage applications climbed for the second straight week according to Reuters.  Do we have the potential for more issues?  Definately, but with our resilient local market, in due time, our real estate inventory will drop.  When we see the re-balance of our local real estate market, real estate will be a strong investment.  Remember, you make money in real estate on the "Buy", NOT the "Sell".

 

Bob Ratliff - RE/MAX Advantage - Las Vegas, NV. - 702-807-5528 

Las Vegas Real Estate Market