tell you how many times I have answered the following question from Home Buyers
during the past 6 months:
"Home Prices have
really Increased during the past 12 months in the Las Vegas Valley...Is it too
late for me to get a really good deal?"
To be Frank and the
short answer, that you would expect to get from a Realtor is No!
Now! That's what I think
from my perspective, but let me layout a few frank thoughts and let you decide
for yourself. After all, it's your money and your investment. You asked and I'm
happy to share.
According to the Greater
Las Vegas Association of Realtors the median price of a single family home was
$170,000 in May of 2013. That was up nearly 33% from May of 2012 when the
median price was just South of $128,000. Although that was a big increase year
over year, you have to take the base number that we started from into
consideration. $42,000 is a drop in the bucket compared to what was lost from
2005 to 2009.
In 2005-06, when the
market crashed, the values dropped 40% on average and up to 60% in some areas
when you considered the condition of the homes. So in reality, if you look at
home prices today, we are currently sitting where home prices were in
2000-02... That's well before the housing bubble really started to accelerate
from 2003 to 2006 when the median price peaked at $315,000.
So if you're looking to
buy at 1999 prices "That's Not Going to Happen" That party
ended about 3 years ago. I have learned that if you're waiting for the bottom
of the market to buy, it has a way of sneaking by you.... Remember the saying
"Coulda, Woulda, Shoulda"?
As we all know,
hindsight is 20/20... Let's look forward and apply the same question from above
My longer answer to the
question, that you would expect to hear from a Realtor, is "I don't
think your too late to get a good buy in the Las Vegas Valley. By the same
token if you or someone you know has been waiting for the last 3 to 4 years,
now is the time to act and here's why I think the stars are aligned for some
slow and steady growth starting now:
1.Â Â Â
The National Housing Market is in a recovery along with the Las
Vegas Valley. From here going forward we will probably see year over year
increases of say 5% to 8%. How's that passbook or money market savings account
working for you? All of my investors (single and multiple property) tell me
that owning a home here is way better and I'm happy to have played a part in
2.Â Â Â
Even though we have seen a modest increase in interest rates,
4.5% is still a very low rate to borrow for a home.... Now! I know that you
could have borrowed at 3.3% back in May, but these damn ships keep sailing and
for some reason some of us don't make it to the pier on time.
3.Â Â Â
The Feds are doing an adequate job of keeping the prime interest
rate down, controlling the banks that took TARP Funds and watching the others.
They notched the rates up in June and July to slow buying down and adjust
values. This will help the all important housing market come back and
strengthen slowly. New jobs and the rest of the economy will follow because
housing sales and starts are the big driver that politicians don't want to talk
4.Â Â Â
There are, so called, experts that think we are in the midst of
another Housing Bubble. I'm not buying it! People have a right to their own
views but my definition of a Housing Bubble is when you have a lot of
properties with loans out to nearly 100% of the homes value to home buyers and
investors with no skin in the game. Some big investors really scattered when
the house of cards fell.
My sources tell me that well over 50% of the homes that have
sold since 2010 have been paid for in CASH. Think about that for a second....
That's a lot of money! Home purchases that are sold with a loan require 20%
down (with the exception of VA loans) and must be owner occupied. When you
minimize leveraged properties and tighten lending guidelines, that helps
solidify home values. Then it becomes all about supply and demand.
5.Â Â Â
The last item I want to address is Short Sales. A short sale is
when a lender agrees to sell the property for less than what is owed on it and
once approved the owner according to the law, has to move out. Even with the
large increase in home values during the past year, the Las Vegas Valley still
has many homeowners that are underwater on their mortgage I have heard numbers
of up to 65%. I can only imagine how paralyzed and stressed out these people
are. Did they go in with their eyes wide open? Maybe, but that's another
There is a new Nevada Law, currently being worked on, that will
help homeowners looking to sell their home as part of a short sale, stay in
their homes. For more info, click
here. If that law goes into effect, this will help flush some bad
loans and allow these homeowners to get their lives back together and start
feeding our economy again.
I hope I answered your
questions and was able to interject a little humor into what can be a very
stressful time for home buyers and sellers. As my husband John and I follow
what's going on around the country in real estate and after moving here nearly
11 years ago from Minneapolis, MN, we still find that Las Vegas is a Special
place to live, invest and ride out a recession.
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if I can help, please e-mail orÂ give me a call at 702-324-5390.