Sponsor of the Month – Summerlin

logo-summerlinTRAIN AND TOUR

From the elevated ridges along the base of Red Rock Canyon National Conservation Area to the cascading slopes of the Spring Mountains, Summerlin, the Las Vegas valley’s premier master-planned community, is currently selling homes priced from the high $200,000s to $2.5 million. More than 60 floor plans with thousands of design options are offered by nine builders to accommodate a variety of lifestyles. These include single-family homes in single- and two-story floor plans, townhomes, semi-custom designs and custom home sites.

Finding out about Summerlin’s newest neighborhoods and amenities is as easy as sending a text message. On your smart phone or tablet, the free Summerlin new home finding app features an easy to use search tool that provides detailed floor plans, prices, photos, videos and maps. A direct connect feature easily links you to on-site builder sales reps. Summerlin.com provides a more detailed look at the community and offers the same easy to use search tool in addition to downloadable maps and brochures.

Realtors who already sell or want to cut their teeth in the Summerlin new homes market can attend a free orientation seminar held quarterly at TPC Summerlin. The Summerlin Realtor Orientation Class provides valuable information about the community pertinent to prospective Summerlin residents. Attend the next session on Thursday, June 4, and get the scoop on future developments in Downtown Summerlin, age qualified neighborhoods and more! Just register today by clicking on the “Realtor” tab at Summerlin.com.

So what’s selling in Summerlin now?

In the south, just across the street from Bishop Gorman High School in The Mesa village are three new neighborhoods. Cielo by Woodside Homes features ten single-level and two-story floor plans in three distinct styles that range from approximately 2,100 to 3,478 square feet. Elegant design elements include lofts accenting high-volume ceilings, unique outdoor living spaces and great views. Monte Bello, by Richmond American Homes features nine floor plans as large as 4,200 square feet with up to six bedrooms and three-bay garages. One section of the neighborhood features only single-level homes. Summerlin’s only currently selling townhome community is Vista Dulce by Toll Brothers. The gated, upscale neighborhood offers three, two-story luxury designs ranging from 1,580 to 1,889 square feet. These homes include full driveways, private backyards and a neighborhood pool and state-of-the-art fitness center. Homes in The Mesa village start from the high $200,000s to the low $500,000s, and models are open.

North of Charleston Boulevard is The Paseos village, showcasing nine neighborhoods by six builders. These single-level and two-story homes offer a variety of features, including up to seven bedrooms, roof-top decks and unique courtyard and backyard lounge and play spaces. Catalina by Lennar has fewer than a dozen homes remaining in just three of the five original floor plans. The largest floor plan at 3,285 square feet offers four bedrooms, four baths and a large loggia. Neighboring Esperanza, also by Lennar is also nearing sellout. Its four floor plans range from 3,242 to 3,864 square feet and offer unique options including one split-level home with a private guest suite. The very popular Santaluz neighborhood by Toll Brothers has just two homes left. These upscale single-story homes are available for quick move-in and are priced to sell. Nearby Montecito, also by Toll, offers three single-level floor plans up to 2,974 square feet with 10-foot high ceilings and three or four bedrooms. Belmonte by Woodside Homes offers three, two-story floor plans ranging from 3,202 to 3,934 square feet and includes standout features like foyers, 20-foot ceiling heights and multi-generational suites. Segovia by Pulte Homes offers three floor plans ranging from 2,776 to 3,364 square feet with cozy design elements including dual-side and rear loggias, a den and owners’ retreat within the master suite. Tevare by KB Home has five floor plans including one single-level home design. At up to 2,625 square feet, these homes offer built-to-order options for home customization. Capistrano by Ryland Homes offers four floor plans ranging from 2,557 to 3,000 square feet with standout options including rooftop decks and a pool in the front courtyard. The newest neighborhood in The Paseos, Altura by Toll Brothers, offers four stunning floor plans ranging from 3,844 to 4,237 square feet and features a first floor bedroom with full bath. Homes in The Paseos start from the low $300,000s to the mid $600,000s.

In addition to magnificent custom homesites, The Ridges features two upscale neighborhoods: Sterling Ridge by William Lyon Homes and Boulder Ridge by Christopher Homes. These upscale homes offer customizable floor plan options and a variety of luxurious upgrades. Sterling Ridge’s six floor plans start in the high $800,000s. Boulder Ridge’s four floor plans start just under $2 million. The Azure custom home neighborhood offers lots from one-quarter to three-quarters of an acre, priced from the low $300,000s to $1 million-plus.

Coming soon to Summerlin’s newest and southernmost village, The Cliffs, is Regency by Toll Brothers, the first age qualified neighborhood in Summerlin in 15 years!

Visit Summerlin.com for the latest on community developments, amenities and major events.

Builder of the Month – Warminton Residential

logo-warmington-residentialWarmington Residential is set to launch five new neighborhoods in Southern Nevada this year.

I am so pleased to announce my association with Warmington Residential, one of Nevada’s most respected homebuilders with a nearly 20 year history in the Las Vegas area. This month, I joined the Nevada team (Warmington Residential has three divisions and is headquartered in Southern California) as Sales Manager, and I am thrilled! There is so much going on and Warmington is hitting the market hard this year with the introduction of five brand new neighborhoods in Southern Nevada.

This includes Desert Ridge, a neighborhood in Mesquite offering single-level living near the Oasis Golf Club, which is currently celebrating its grand opening; as well as four neighborhoods in the Southwest. These include Westbury and Ridgehaven, opening in a few weeks; and Rockpointe and Vistaview, which will open in the fall. Prices for these homes begin from the high $200,000’s.

Among these five new neighborhoods, Warmington Residential offers buyers so many choices. In all, there will be 19 floor plans, opportunities for single-level (Desert Ridge) and two-story living, detached and semi-attached floor plans, two to seven bedrooms, casitas, up to about 3,226 square feet, and an array of great locations from which buyers may choose. It’s hard to image that in the coming weeks and months, Warmington Residential won’t have something for every type of buyer.

This builder has a long history of partnering with Realtors® and Warmington Residential will continue to welcome, support and pay commissions to its Realtor® clients. If you have not done so already, I recommend that you visit HomesByWarmington.com/REPros and register to become a Preferred Real Estate Professional. When you do, you will enjoy the unique convenience of registering and managing your clients online, and you will be kept “in the know” about the communities you are your clients are interested in.

I am looking forward to a great year, continuing to debut an array of exciting new neighborhoods throughout Southern Nevada, and working with you!

Please feel free to contact me at (702) 326-0320 or email [email protected] if I can be of service to you. And be sure to visit Warmington Residential’s award-winning web site at HomesByWarmington.com to learn more about the company and all of its new home neighborhoods. Here’s to a great year,

Chris Chaney
Sales Manager
Warmington Residential | Nevada Division

Legal Ease, vol4

logo-black-lobelloCourt Annexed Arbitration and Attorney Fees

In the event you find yourself in a lawsuit less than $50,000.00, you will be forced to participate in the Court Annexed Arbitration program. In other words, you must arbitrate by a court appointed arbitrator prior to being able to have your matter heard before a judge. In the event you are unhappy with the outcome of arbitration, you may then ask for a De Novo review of your case before a judge, as long as you participated in the arbitration in good faith[1]. A De Novo review gives you the chance to have your case completely reheard by the court, but your result must be better than you received at arbitration in order to be a prevailing party and obtain attorney’s fees and costs[2].

Are you entitled to your attorney fees and costs in arbitration?

The short answer is maybe and some. If you are suing pursuant to written agreement, and that agreement states that the prevailing party is entitled to reasonable attorney fees and costs, the prevailing party can be awarded attorney fees at the discretion of the arbitrator as to what is reasonable (same as a court).   However, if you are suing under some other principal, such as an oral contract or negligence, you are limited to a maximum recovery of $3000.00 in attorney fees[3]. Your costs, however, are recoverable subject to arbitrator review and approval.[4]

What constitutes a recovery and prevailing party for purposes of recovering attorney fees and costs?

If you have a provision in your written agreement, and you either are awarded money or successfully defend a lawsuit, you are generally considered the prevailing party and are entitled to an award of fees as stated and provided in that agreement.[5]

If you do not have a written agreement, you may make an offer of judgment (no matter the claim amount). If you are successful at arbitration, and prevail for more than you offered, you may be awarded your attorney fees and costs[6], however, under the arbitration rules you are limited to $3000.00[7]. Your costs are only limited by review of the arbitrator (same as with court).[8]

If you do not have a written agreement, and your recovery is less than $20,000.00 and you are the prevailing party at arbitration you may recover your attorney fees, by statute[9], but again, pursuant to the arbitration rules, your attorney’s fees are limited to $3000.00[10]. Your costs are only limited by review of the arbitrator (same as with court).[11]

What constitutes a recovery of less than $20,000.00 for the purposes of the statute?[12]

This is the tricky part. If you are a defendant wherein the plaintiff loses and the arbitrator finds in your favor but does not award you a dime of actual recovery, is that less than $20,000.00? Common sense would say yes, however, the courts do not agree[13]. For the purposes of the statute, the Supreme Court of Nevada has reasoned that the wording and application of the statute would only consider an actual monetary award to constitute a recovery of less than $20,000.00[14]. Likewise, if you have a counterclaim, and the arbitrator finds in your favor, but fails to award any actual dollar amount, it is possible that you would be unable to recover attorney fees, under the statute, for the same reason.

Exception:

The sole exception to recovery under the statute, to which a recovery amount is not attached, is the determination by the court (or arbitrator) that the lawsuit was brought or maintained without reasonable grounds or for harassment purposes[15]. The courts (and arbitrators) are supposed to construe this statute liberally in favor of awarding attorney’s fees, however, the limits of arbitration would appear to still exist[16].

The bottom Line:

Without a written agreement stating that the prevailing party is entitled to attorney’s fees and costs, the prevailing party’s recovery may be limited to costs only and each party may be responsible for their own attorney fees. At the most, without a written agreement, under the court annexed arbitration program a prevailing party is entitled to a maximum attorney’s fees award of $3000.00, if the proper steps are taken. This should be taken into account when deciding to bring a law suit that is valued less than $50,000.00, and is subject to the court annexed arbitration program.


 

[1] NAR 22(A)

[2] See, NAR 20(B)(2)(a) wherein award must exceed 20 percent of arbitrator’s award if claim is less than $20,000, and NAR 20(B)(2)(b) wherein award must exceed 10 percent of arbitrator’s award if claim is greater than $20,000, in order for the non-requesting De Novo party to obtain attorney’s fees and costs. The prevailing party is entitled to attorney’s fees, however, if successful at a De Novo trial, subject to reasonableness as determined by the court. See, NAR 20(B)(1).

[3] NAR 16(E)

[4] See NRS 18.020

[5] See NAR 16(E), an offer of judgment could affect who is determined to be the prevailing party.

[6] See, NAR 16(D)

[7] See, NAR 16(E)

[8] See, NRS 18.020

[9] See, NRS 18.010(2)(a)

[10] NAR 16(E)

[11] See, NRS 18.020

[12] NRS 18.010(2)(a) allows for attorney fees when the prevailing party has not recovered more than $20,000.

[13] See, Smith v. Crown Financial Services of America, 111 Nev. 277, 286, 890 P.2d 769, 775 (1995)

[14] See also, Thomas v. The City of North Las Vegas, 122 Nev. 82, 86, 127 P.3d 1057. 1060 (2006)

[15] See, NRS 18.010 (2)(b) Without regard to the recovery sought, when the court finds that the claim, counterclaim, cross-claim or third-party complaint or defense of the opposing party was brought or maintained without reasonable ground or to harass the prevailing party. The court shall liberally construe the provisions of this paragraph in favor of awarding attorney’s fees in all appropriate situations. It is the intent of the Legislature that the court award attorney’s fees pursuant to this paragraph and impose sanctions pursuant to Rule 11 of the Nevada Rules of Civil Procedure in all appropriate situations to punish for and deter frivolous or vexatious claims and defenses because such claims and defenses overburden limited judicial resources, hinder the timely resolution of meritorious claims and increase the costs of engaging in business and providing professional services to the public. (in pertinent part)

[16] NAR 16(E)

Word On The Street, vol4

logo-glvarGLVAR reports local home sales spring forward

LAS VEGAS – The Greater Las Vegas Association of REALTORS® (GLVAR) reported Wednesday that Southern Nevada home sales surged in March while prices remained stable.

GLVAR reported the median price of homes sold through its Multiple Listing Service during March was $205,000, unchanged from February, but up 5.1 percent from one year ago. Meanwhile, the median price of local condominiums and townhomes, including high-rise condos, sold in March was $115,000. That was up 9.5 percent from February and up 13.9 percent from one year ago.

According to GLVAR, the total number of existing local homes, condominiums and townhomes sold in March was 3,358, up from 2,452 in February and up from 3,094 one year ago. Compared to the previous month, GLVAR reported that sales were up 37.8 percent for single-family homes and up 33.7 percent for condos and townhomes. Compared to March 2014, sales were 6.7 percent higher for homes and 17.1 percent higher for all types of condos and townhomes.

“I’m glad to see that we’re selling more homes,” said 2015 GLVAR President Keith Lynam, a longtime local REALTOR®. “Home sales usually warm up with the weather each spring, but this is the biggest spring sales spike we’ve seen since the same time of year in 2006. Maybe our members and homeowners are taking our advice and asking more realistic prices for their homes.”

Lynam suggested “taking some caution to see if the uptick in sales becomes a trend or more of an aberration.”

He said this increased sales pace, combined with a continued tight supply of homes available for sale, means Southern Nevada has less than a three-month supply of available homes. A six-month supply is considered to be a balanced market, he added.

GLVAR continued to track fewer distressed sales and more traditional home sales, where lenders are not controlling the transaction. In March, 8.3 percent of all local sales were short sales – which occur when lenders allow borrowers to sell a home for less than what they owe on the mortgage. That’s down from 9.3 percent in February and from 12.9 percent one year ago. Another 9.3 percent of March sales were bank-owned, down from 9.7 percent in February and down from 11.7 percent last year.

Lynam said short sales could increase in 2015 if Congress votes to again extend the Mortgage Forgiveness Debt Relief Act of 2007. In December, Congress voted to retroactively extend the tax break it had allowed to expire at the end of 2013 to help distressed homeowners who sold properties in 2014. Unless Congress extends this act through 2015, any amount of money a bank writes off in agreeing to sell a home as part of a short sale this year may become taxable when sellers file their income taxes.

The total number of single-family homes listed for sale on GLVAR’s Multiple Listing Service in March was 13,532, up 2.6 percent from 13,188 in February, but down 3.0 percent from one year ago. GLVAR tracked a total of 3,613 condos, high-rise condos and townhomes listed for sale on its MLS in March, up 1.5 percent from 3,558 in February, but down 2.4 percent from one year ago.

By the end of March, GLVAR reported 7,257 single-family homes listed without any sort of offer. That’s down 0.8 percent from February, but up 12.2 percent from one year ago. For condos and townhomes, the 2,445 properties listed without offers in March represented a 0.8 percent increase from February and a 6.5 percent increase from one year ago.

GLVAR said 32.4 percent of all local properties sold in March were purchased with cash. That’s down from 37.4 percent in February and from 43.1 percent one year ago. It’s also well short of the February 2013 peak of 59.5 percent, suggesting that fewer investors have been buying local homes.

The median price of bank-owned homes sold in March was $163,500, up from $159,250 in February. The median price of single-family homes sold as part of a short sale in March was $165,000, the same as during February.

These GLVAR statistics include activity through the end of March 2015. GLVAR distributes such statistics each month based on data collected through its MLS, which does not necessarily account for newly constructed homes sold by local builders or for sale by owners. Other highlights include:

  • The monthly value of local real estate transactions tracked through the MLS during March increased by 39.4 percent for homes to more than $676 million. For condos, high-rise condos and townhomes, March sales totaled nearly $107 million, up 32.8 percent from February. Compared to one year ago, total sales volumes in March were up 14.9 percent for homes and up 39.3 percent for condos.
  • In March, 61.4 percent of all existing local homes and 60.9 percent of all existing condos and townhomes sold within 60 days. That compares to February, when 57.3 percent of all existing local homes and 55.6 percent of all existing condos and townhomes sold within 60 days.

About the GLVAR

GLVAR was founded in 1947 and provides its more than 11,500 local members with education, training and political representation. The local representative of the National Association of REALTORS®, GLVAR is the largest professional organization in Southern Nevada. Each GLVAR member receives the highest level of professional training and must abide by a strict code of ethics. For more information, visit www.HomeLasVegas.com or www.LasVegasRealtor.com.

By The Numbers, vol4

HBRLogoThe housing industry is improving from its “ok” performance during most of 2014, and we have the data to prove it. In March, there were 543 new home recorded sales. The first quarter of 2015 ended with 1,378 transactions, which was an increase of 100 sales or 8 percent. It’s not a huge change, when considering some of the past (up and down) fluctuations that have almost become expected in the Las Vegas housing scene, but still a positive, upward movement of the new housing segment.

The median price of the new home recorded sales in March was $312,204. When compared to the median price of a year ago it is an increase of $26,729, or 9 percent. We have been waiting for the closing prices of the new homes to display some interesting changes, primarily due to new subdivisions that have a higher land basis. Many of the new home value ratios in the most active sub-market areas have risen in 2015. Some have been pushed upward by excellent net sales, but we think the chief reason for this is the higher cost of land and development costs. More on this later …

Even more impressive than the closings data, is the net sales and consumer traffic counts through the model homes. The next chart compares the net sales (new contract orders) and consumer traffic of the 1st quarter 2014 and 2015. We have segmented the data by sub-market area to make it even more useful. (This data chart is taken from our Quarterly Summary Report).

1ST QTR – 2014 1ST QTR – 2015
AREA NET SALES TRAFFIC NET SALES TRAFFIC
E 69 822 39 307
H 244 6409 393 8457
NLV 106 3337 154 3214
NW 398 11624 482 11234
S 30 906 37 1262
SW 548 13091 790 21229

NOTE – The above chart is part of our QUARTERLY SUMMARY REPORT. It can be purchased and downloaded at homebuildersresearch.com

Overall, the traffic increased by 26 percent from what was reported during the 1st quarter one year ago. This is where it all starts … increases in sales and production begins as a “numbers game”. More traffic = more sales. Therefore, when the traffic rises, we expect more contract orders, permits, and closings. It’s actually pretty simple; builders have to get more bodies coming through their doors to view the products.

It should follow that the net sales increased in the 1st quarter, and they did overall by 36 percent. The biggest sub-market “gainers” were the southwest area, south, and Henderson. The southwest area saw a 1st quarter year to year rise in total consumer traffic of 62 percent. Yes, there was an increase in the number of active subdivisions in the southwest area (about 50%). However, during March the traffic per project year to year surged by 52 percent. The negative part of this quick analysis would be that the net sales per project (March to March) remained the same in the southwest, at 3.8.

There is a lot of interesting information to be taken from the above chart. For example, in the northwest sub-market area the net sales increased year to year by 21 percent. However, the total traffic decreased year to year by 3 percent. The same scenario took place in North Las Vegas(NLV). Total traffic declined by 4 percent year to year, but the net sales rose by 45 percent. That is a very good sign for the NLV sub-market.

We have said many times that the housing market recovery will not be “complete” until consumers start buying more new homes in NLV. There is a good supply of undeveloped land in NLV, which is something that is missing from other parts of the Las Vegas valley. Since the “Great Recession”, there have been few builders who feel comfortable enough with the level of demand to risk opening a new community in NLV. The City of North Las Vegas is trying to attract and accommodate new subdivisions that contain fresh products and new technologies. And most important, the new construction will help their severe economic situation that has lingered by bringing new revenue sources (taxes).

GOOD NEWS ON MARCH PERMITS … we counted 781 new home March permits in the metropolitan area. That ended the 1st quarter with 1,849 permits, which is a year to year increase of 464, or 34 percent. This is a great start, and if the pace continues the new home market will surge past last year’s 6,632 sum easily surpassing 7,000 permits in 2015. But, we are not convinced the current pace will continue for all of 2015. We think many of the home builders in Las Vegas feel the same way. “Cautiously optimistic” is an overused cliché, but in our opinion it is very appropriate in this scenario.

There was a very notable increase in the number of recorded resales in March. We sorted through 3,856 transactions, 1,014 more than we counted in February. That is an amazing one month change. The first quarter ended with 9,217 recorded sales, which is a year to year increase of 1,165 closings, or 14 percent. This is a very good sign. If the pace continues for a few months it would be a big help to the new home segment.

The local housing market needs to have more consumers looking to upgrade to a new home with equity dollars in their pockets. Judging from the anecdotes from active realtors, there are many baby boomers looking at Las Vegas (and other parts of the southwest) as potential destinations. Whether it is for downsizing or upsizing for retirement, wanting to be closer to their grandkids, getting to a warmer climate, or getting away from the many issues and taxes of California, Las Vegas is a great option for the maturing baby boomers.

The new consumers are great, but we will also need to see a larger number of locals moving up and purchasing new homes before a feeling of “normalcy” returns.

The median price of the resale closings (all product types) in March was $180,000. The resale median for all product types is trending upward nicely. The March median was $3,000 higher than February, which was $2,000 more than the January. The March $180,000 median was also $9,000 more than it was one year ago, a year to year rise of 5.3 percent.

When we segment the March resale closings by product, there were 3,229 single family transactions. Their median price was $192,000.

The condominium segment also had a very good month. Resale condo recorded sales have been running 425 – 525 per month for the past 6 months. In March there were 627 resale condo closings, a very strong increase. The median price of the condo transactions was $102,500, a month to month increase of about $3,000.

The inventory of existing single family (SFR) listings without a contingent offer continues to be very consistent, which is a little surprising. We were told by economists that the supply would slowly rise as more homes emerged from being underwater and the local jobs market improved. However, the next graph displays that it hasn’t happed yet. The last 4 months the inventory of SFR without offers has been flat. The “other side of this coin” would be that a continued tight supply of listings should result in better price appreciation, which benefits homeowners, and the new home segment.

The condo listings without offers have also been very flat, exhibiting small up and down monthly movements. At the end of March there were 1,844 condo listings without offers.

**********

An interesting tidbit we have noted lately are some testimonies at recent hearings during the current 78th Nevada legislature for bills affecting the housing market that suggested lenders and investors have greatly increased the number of foreclosure actions. We checked the data, and found that the Notice of Defaults (NOD’s) doesn’t seem to indicate this. In fact, the number of NOD’s has been fairly flat for at least 6 months. According to First American Title Company, In March there were 911 NOD’s filed, and that put the total for the past 6 months at 4,640. This translates to 773 per month, hardly what we would term as “a great deal more foreclosures being processed”. Before the laws were changed in the prior 2 legislative sessions, the average number of monthly NOD’s was typically 1,500 – 3,000 per month. Just because some “notable person(s)” who is lobbying for a new Bill offers their opinion, or statistics to support their argument, it certainly doesn’t make it a fact. We heard the same kind of “questionable statistics” being tossed around the state legislature during the hearings for AB 284, AB 300, and SB321, and statements of “the new laws would have no ill effects on the housing market or local and state economies.” We’ll let History be the judge of those statements.

**********

ON FRIDAY, MAY 29TH, we will be hosting our next LAS VEGAS HOUSING OUTLOOK

CONFERENCE. Once again, it will be at the Conference Center at the Springs Preserve. We will be presenting a detailed analysis of the current Las Vegas housing market, and how it has evolved from 2014 to where we are in the 2nd quarter of 2015. We will offer our new and resale projections for this year and going into the next couple of years. Market share of builders, master plans, sub-market areas, home prices, and other housing related topics will be addressed.

We also plan to discuss the status of pieces of legislation that are being considered at the 2015 Nevada Legislative Session (78) that might affect the housing industry. These updates will be provided by the Southern Nevada Home Builders Association and other groups. There will also be a panel of local housing professionals and others who will be available for questions and answers for about one hour. This panel will be selected based on the recent “hot topics” which anybody involved in the local housing industry will want to know.

The Housing Outlook Conference will start at 7:30 with a continental breakfast and networking. The program starts at 8:30, and will run until 10:30. You can register for this event at our web site, homebuildersresearch.com. The cost is $40, or if you are a member of the Southern Nevada Home Builders Association, it will be discounted to $35 per attendee.

We try to hold our Las Vegas Housing Outlook Conference about every 6 months. We have waited a little longer this time because we wanted to get as much feedback and data on hand as possible regarding the outlook of what the Federal Reserve might do with the interest rates, and how much it might affect the new and resale housing sales and production moving forward in 2015 and into 2016. We also wanted to get as much information that was available on the changes that might take place at the 78th Nevada legislative session. These topics and more will be part of the basis for our near term projections. The discussions with the panelists and housing professionals in the audience are always something we look forward to.

One of the topics that will be discussed will be the upcoming Integrated Mortgage Disclosures. Have you heard of this? We can assure you lenders and title companies are very much aware of it. It was brought to our attention a couple of months ago by Mike Sweeney at Alpine Mortgage. After hearing just a few of the general changes that it would bring to the process of new and resale closings, we were stunned. The Integrated Mortgage Disclosures will take effect where a loan application is taken by a lender on or after August 1, 2015.

According to First American Title Company, the Consumer Financial Protection Bureau (CFPB), which is an entity created by the Dodd Frank Act, issued a new Truth in Lending Act (TILA) that created two new forms (each with many variations) and NEW 3 business day delivery requirements. They basically deal with loan estimates (3 business days after application), and the closing disclosure (also 3 business days before consummation.) Some of the impacts to the closing process …

  • Closings could take longer because of 3 business day review periods.
  • There will be different forms for most transactions.
  • The contact information and license number must appear on the Closing Disclosure form.
  • Clients may receive multiple Loan Estimates due to,
    • Changed circumstances – that cause the estimated charges to increase by more than the variance allowed.
    • Multiple applications for different loan products with the same lender.
    • Multiple applications with different lenders.
  • Clients may receive multiple Closing Disclosures, – some with a 3 day business day waiting period and some without, and some before closing and some after.

Anything that can delay a closing is not good, and the added “monkey wrenches” that are going to be hanging over the heads of every closing transaction could be a royal pain. The sooner the industry understands and prepares for these changes, the easier the procedures should become. We can see these new requirements could have a big effect on lenders, title companies, and builders. We will have lenders and title companies at the upcoming LV Housing Outlook on May 29th to answer all of your questions on this disturbing subject.

Check out our web site, homebuildersresearch.com for listings and samples for all of our housing reports for the Las Vegas area. We are continually adding to, adjusting, or improving them to meet the needs of the local housing industry. Or, call us at 702-645-4200.

Dennis Smith, President

View From The Top, vol4

By Nat Hodgson
Executive Director
Southern Nevada Home Builders Association
One of the often overlooked impacts of government regulations is the effect on housing affordability. Every time a local or higher level government entity issues a new regulation on the residential construction industry, it raises costs by, for example, increasing the price of permits or fees. Higher costs invariably cause higher home prices, which in turn means that an increasing number of households can’t afford to purchase a home.

The National Association of Home Builders, of which SNHBA is the local affiliate, recently released its annual “Priced Out Effect Report.” The report is based on a NAHB economic model that estimates how many households are priced out of their respective housing markets based on every $1,000 increase in the median price of a new home.

NAHB estimates that 2,044 households are priced out of the housing market for every $1,000 increase in the price of a new home in metropolitan Las Vegas, based on pricing for 2014. This is one of the reasons that SNHBA is a tireless watchdog on the issue of government regulations and fees.

Nationwide, a $1,000 increase in home prices leads to pricing out of about 206,269 households, according to the NAHB model.

Quite frequently and often unintentionally, local regulations raise construction costs and trigger housing price increases. The NAHB report highlights the overlooked effects of regulation on housing affordability. The 2014 estimates show that in relatively affordable metro areas, hundreds and sometimes thousands of households can be priced out of the new home market as a result of prices rising by $1,000.

NAHB research shows that on average, regulations imposed by government at all level account for 25 percent of the final price of new single-family home built for sale. In fact, the final price of the home to the buyers will usually go up by more than the increase in the government fee or requirement. That’s because each time construction costs increase, other costs such as commissions and financing charges automatically rise as well. Most cost increases are passed on to buyers.

The Southern Nevada Home Builders Association estimates that governmental requirements, fees and cost contribute to more than $50,000 of the price tag for a new home in metro Las Vegas. It’s a situation we monitor closely on behalf of our homebuyers.