Mortgage rates are falling fast, thanks to the Federal Open Market Committee's statement increasing support for the mortgage market. U.S. central bankers announced plans yesterday to buy as much as $300 billion of long-term Treasuries, and to more than double mortgage-debt purchases to $1.45 trillion, in an effort to lower home-loan and other interest rates. The statement from the FOMC stated that its main rate would remain at almost zero, quite possibly for an “extended” time. The rate for a 30-year fixed was just under 4.7% this morning and is likely to fall a bit further. Some newsmakers opined that rates could fall to 4.5%.

While this is good news for homebuyers who are buying right now, this poses two potential problems for homebuyers who are still stalling on their decision to purchase.

When the economy begins to rebound, the sudden influx of money is expected to lead to inflation. Anyone who remembers the double-digit interest rates in the 1980's may want to think twice about waiting in hopes that housing prices will drop further. There are already many REOs on the market that you can buy for less than the cost to build; at this point, these can be purchased with really low-cost financing.

Another problem which will likely worsen is already causing headaches for my buyers. As rates drop, the mortgage lenders are flooded with requests to refinance. Already the lenders I work with are busy with refis, including "short refis," and buyers — who generally get preferential treatment due to escrow deadlines - are waiting an extra four or five days for loan approvals.

I've had to request extensions to the close of escrow date for three buyers this month due to lender delays. Not only will these three buyers need to pay more interest up front if these close after the last day of the month, but they may very well incur "per diem" charges of $50 to $100 per day — the fee charged by the bank when the buyer fails to close on time due to no fault of the seller.

If you have a home in escrow, be sure that your lender is going to be able to close in a timely manner. I am e-mailing or phoning my buyers' mortgage officers every day advocating for a timely close. When yours is one mortgage application in a stack of applications, make sure your Realtor is looking out for you and is in constant contact with your lender and the title company. And if you aren't going to be able to close on time, make sure it's the seller's fault!

Everyone and their uncle wanted to buy a Las Vegas home in August. As I said, I suddenly developed the Midas Touch. I am just beginning to get caught up as escrows close before the end of the month.

Gui bought another house, and if you've been with me since I started this blog, you'll remember Gui. This one was as difficult as the last – but I still love this guy. Folks, keep in mind that a cash offer is a cash offer. At the beginning of the year we were writing cash offers and converting these to financing, but lenders are really getting ticked off if you try this now. I did convert one from cash to financing last week, but the seller would not agree to this on Gui's; he had to bring cash to closing or lose this deal.

In an unusual twist, Pete and Dominique became LVA fans through the real estate page instead of the other way around. After seeing the opportunities in Las Vegas, this couple traveled here from Winnipeg last week and headed home big winners. (I change the names to protect confidentiality; this lovely client said she always wanted to be called Dominique!) After making offers on 5 properties, their "highest and best" offer, on the condo they wanted most, was accepted at $74,100. They were thrilled, but it got much better. The listing agent didn't get the increased offer back to the seller on time, and this lucky couple bought their condo for $61,600: the original offer. They returned home from Las Vegas feeling like they'd won a $13,000 jackpot.

Mortgage rates are bouncing around today. If you are waiting to lock a loan, I highly recommend you contact your mortgage agent quickly. If you need a referral to a mortgage agent, please feel free to contact me.

For my Canadian readers: Yes, that's us you saw on Global TV BC's "Viva Las Vegas" weekend story on Canadians investing in Las Vegas homes. Several wrote to tell me they recognized Ron. Unfortunately, the reporter didn't mention either Top10RealEstateValues.com or LasVegasAdvisor.com.

I’ve noticed a bit of a phenomenon that suggests to me that prices are beginning to stabilize in certain areas. Overall, prices are still dropping while sales are rising. However, we may be reaching the bottom in specific developments.

In December, I sold a nearly-new 3,100 sq. ft. REO to a client in the southwest area for $380,000. This was a great buy, but prices dropped again early this year, and a few more houses came on the market at a lower price. Today, I can’t find this model listed for anywhere close to this price. The most recent sales are $400,000 and above.

I have a client trying to buy a similar home in good condition for $375,000, but the bank countered at $415,000 and is standing firm. We’ve countered the counter at $385,000, and I’m working to educate the listing agent on why the bank should accept our price. We’ll see who wins. Unfortunately for his seller, the agent is taking it personally, as though it’s his home. He’d be doing his seller a favor by sending over the comps, but I can’t seem to get him to understand that.

In January, another client’s offer was accepted on a 3,000 sq. ft. home in very good condition for $249,900. There were similar homes that he could have bought for $245,000 to $255,000. He closed escrow in late March. Now I’m trying to find a home for his friend, but homes similar to the model he bought are selling for at least $260,000. His friend just offered $270,000 for a similar home in good condition, but our offer was rejected for a higher offer!

The only difference in both of these situations appears to be the timing. Same models, same condition, but what was available in December and January—when almost no one was buying—is selling for more today. Too early to tell if this pattern foreshadows a trend. But I’m sensing that prices have stabilized in these 2 communities when you can’t buy the same house for the same price you could 60 days ago. More buyers, more competition…supply and demand at work.

I’ve shown houses and written offers this week for clients from Alaska, Saskatchewan, San Diego and Calgary; but no one from Las Vegas! Investors are scooping up the best deals, as are out-of-state vacation and retirement home buyers. I hate to see so many locals miss these opportunities. By the time they get that it’s time to buy, the houses will cost more.

I'm working on a blog entry addressing several important questions I've received from readers this week.

But I interrupt my research to share something important that just crossed my desk. Just over an hour ago, Countrywide notified all of its brokers that broker compensation would be capped at 4%, including yield spread premium-plus points and fees charged by the broker to the borrower.

Had lenders not allowed brokers to charge much more in the past, we'd have fewer foreclosures in the present. Many professional mortgage agents work for compensation that averages 2% to 2.5% and would not feel right about charging a client 4%. On the other hand, there are many unscrupulous mortgage brokers that will charge a client as much as they can get away with, up to the limits considered "high cost loans" under federal law.

This is good news for homebuyers. It's likely Countrywide is anticipating sweeping industry reform and is being proactive.

While I am focused on my real estate clients, I maintain my mortgage license. As a mortgage banker who couldn't sleep at night if I'd ever made 4% on a mortgage, I salute Countrywide. We all have the right to make a good living. And 2% to 3% is a damned good living.

If you read my entry on March 4, you received some insight on which direction mortgage rates might take. I shared with you Brandon Foor's comments to me on the matter of refinancing.

Those readers who followed my suggestion to get ready should have already heard from their mortgage agent today. The rate for a conforming 30-year fixed is at 5.5%. If you haven't locked your refi or purchase loan, I suggest you speak with your mortgage agent ASAP.

I predicted in a Las Vegas Review-Journal article that we were nearing the bottom of the market last November. Wow, did that shake some people up. I received emails from a number of my clients stating that they thought I was crazy, and asking how we could be nearing the bottom when prices were still dropping. Yes, prices are still dropping … but since you really only know that prices are rising after the fact, you've already missed a great opportunity if you wait for statistics that are 30 days old when you see them.

I am more confident than ever that we are at the bottom of the market in terms of sales. For the 11 months ending in October 2007, the number of sales decreased every single month. In November, sales were flat. Based on several factors, I predicted we were nearing the bottom and that, even with an expected holiday slowdown, we would begin to see sales rise early in 2008.

Sales of "resale" homes (single family residences listed on the MLS) in Las Vegas have remained flat for November, December and January. In a market that was devastated by decreasing home sales for nearly a year, flat is good. But it gets better, because pending sales are on the rise. I am going to make another bold prediction: I predict that, barring an apocalyptic event this month (such as mortgage products disappearing), February sales will be higher than January sales.

My clients already know my secret: I don't make guesses based on my feelings. Our research is real-time, not based on another firm's stats released at the end of the month. (My researcher can beat up your researcher.) So while I'm going out on a limb in predicting that February sales will be higher than January sales, I'm merely extrapolating using today's statistics.

It's simple supply-and-demand logic that once demand is rising, prices will follow. Perhaps sales will remain flat for several more months; I predict that they will continue to rise. We are seeing pending sales rising in what are traditionally the worst sales months of the year. In March or April, these sales will begin to show up in the statistics as escrows close.

In other words, the general public will be reading news stories that sales are rising soon. I work hard to keep my viewers on the cutting edge; I don't want our clients and viewers to hear about opportunities once they've passed. When prices begin to rise, I'll let my viewers know. In the meantime, I'm stating it once more: We are at the bottom in terms of sales. How long until the pendulum swings?