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Aug. 17, 2009
Copyright © Las Vegas Review-Journal

Military enlist in real estate

By HUBBLE SMITH
LAS VEGAS REVIEW-JOURNAL

The number of homes purchased in Nevada by military personnel using VA loans funded by USAA jumped 360 percent this year and refinancings are up 250 percent, the San Antonio-based financial services company reported.

Across the country, home purchases backed by the U.S. Department of Veterans Affairs increased by more than 100 percent. Active-duty military, retirees and reservists are taking advantage of a perceived buyer’s market, with some becoming homeowners for the first time, USAA financial planner Joseph Montanaro said.

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    • Some pockets of the country such as Nevada, northern Virginia and San Diego are seeing dramatically higher increases than others, he said.

    “Is it a good time to buy? Clearly, a lot of people are answering, 'Yes,’” Montanaro said. “Interest rates are historically low, home prices have taken a beating and so it’s much more attractive.”

    Another incentive is the first-time home buyer tax credit of $8,000, which ends Dec. 1, he said.

    Gary Adkin has been approved for a $250,000 loan by the VA and has spent several months looking for a home, ideally a foreclosure or short-sale in the $170,000-to-$200,000 range.

    He’s made several offers, often outbid by investors with cash.

    “It’s really frustrating,” said Adkin, who served in the U.S. Navy from 1965-72. “I’m qualified, the loan’s pending. It’s just finding a house. Every time we get in escrow, something happens and it goes bad. Last time, we had a home inspection done and found out the people didn’t disclose a problem with the house.”

    VA purchases have definitely picked up after a bit of a lull, Elie Morris of Realty Executives in Las Vegas said. He counted 1,405 such home sales in the last six months.

    “It is a trend because conventional loans are almost nonexistent,” Morris said. “The only loans going through right now are (Federal Housing Administration) FHA and VA.”

    With its warm climate and relatively inexpensive housing, Las Vegas is a desirable location for lots of retirees, including some from Nellis Air Force Base, Morris said.

    USAA, founded in 1922 by a group of U.S. Army officers to self-insure themselves, reported assets of $68.3 billion in 2008 and net worth of $14.6 billion. The Fortune 500 company earned $423 million in net income in a year when most financial services posted record losses and the S&P 500 dropped by 37 percent.

    “Obviously, the VA guarantee makes lenders more willing,” Montanaro said. “On the buyer’s side, they have the advantage of no down payment, so they can keep some powder dry if they need it later.”

    He said military buyers still have to crunch the numbers. They need to evaluate any contingencies such as their employment situation, whether they’ll be moving anywhere or any change in marital status.

    Mark Stark, owner and broker of Prudential Americana, said he’s absolutely seeing an uptick in home buyers from the military.

    “It’s a great opportunity to use their VA loan,” Stark said. “Many times, they can get the first-time home buyer credit. With no money down and the lowest prices in a while and low interest, you don’t have to twist their arms.”

    Home sales have increased by 75 percent in Las Vegas through the first half of the year with more than 3,000 closings in each of the last four months, SalesTraq research firm reported.

    Stark said 38 percent of those sales are going to investors and most are cash transactions on the low end. He just sold a home last week for $22,000.

    The government needs to do more to help all home buyers, Stark said. He’d like to know why the tax credit can’t be given to everyone, not just first-time buyers.

    “That’s the biggest message. I know they’re talking about $15,000 (credit) for everyone, but they’d better come out with something,” he said.

     

    Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.

     

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    Debi wrote on August 18, 2009 07:03 PM: No Glen, Mark Stark did not run his company into bankruptcy last year, it never was in bankruptcy, but thanks for asking.


    VegasMommy wrote on August 17, 2009 10:39 PM: Fair and Balanced Fred, you are an idiot. While I am not for Obama and his socialist policies, the VA loan is a benefit for our Veterans. That includes myself. My husband and I still had to qualify, pay closing costs, find a good foreclosure etc. The VA will not finance a home that needs major work or even has a cracked window. USAA was my lender and they would not close because my garage had a tiny crack in the window, it had to be fixed. This is not part of the socialist agenda. This is the government saying thank you to all of us who served proudly. Veterans deserve everything we get. We actually did something for this country unlike those who sits on their butts at home saying "why me" and waiting for all of the government handouts they can get.


    HELP the veterans wrote on August 17, 2009 08:59 PM: VA loans are tax breaks military personnel have EARNED, so are school loans.

    They still have to jump through hoops,like state residency to qualify for in-state tuition immediately after discharge, (why make a veteran wait a year to establish residency, if accepted to an educational institution?)

    Why can't veterans in business and education help other veterans?


    Glenn wrote on August 17, 2009 08:20 PM: Hello didn't Mark Stark run his company in bankruptcy last year?
    My home was purchased using a VA loan. The second time that I have used this benefit.


    Fair and Balanced Fred wrote on August 17, 2009 07:54 PM: VA subsidized loans are SOCIALISM!

    We need to stop our MARXIST military personnel NOW!

    END THE OBAMA SOCIALISM!

    Go to a town hall near you and SCREAM YOUR HEAD OFF FOR AMERICA!


    curious wrote on August 17, 2009 06:10 PM: While we see on a daily basis town hall meetings to haggle over the health insurance fiasco, the underwater situation of many homeowners is being totally ignored. Regardless of what people think, there is a huge population (certainly more than subprime) of quality borrowers with good income and credit scores who have been removed from the market due to underwater homes. Ironic isn't it that we have all these programs to bail out people who shouldn't have bought homes in the first place while throwing a blanket over those who can and would stimulate the economy if they didn't have such a poor equity position. Glad to see veterans get this opportunity but we have to consider that each distressed sale further destroys equity in the entire neighborhood. And this is good for whom?


    fastforward the video to 19 minutes wrote on August 17, 2009 05:56 PM: http://video.google.com/videoplay?docid=7065205277695921912&ei=zvqJSo6WNY6GqQO-_5SbDQ&q=zeigeist+addendum&hl=en


    nobody has any money, so stop the phony real estate hype wrote on August 17, 2009 05:55 PM:

    give it a rest.
    no body is applying for loans.
    regardless of the phony hype.

    fast forward this video to 19 minutes and be shocked at the truth