- Inventory Issues
It is well known that there is a record shortage of inventory in Las Vegas. This shortage of homes available for sale has created an increase in prices with bidding wars across the Las Vegas valley. Several companies are moving to Las Vegas in addition to the major league sports team and general population increase. This has made the shortage of homes available frustrating for many home buyers. There are roughly 5,100 single family homes on the market, which is much lower than the same time last year. However; interest rates remain at a record low and maintain the affordability of buying a home.
- No Down Payment and Stated Income Loans are Back!
Several loan programs today are making it less expensive to buy a home than paying the move-in costs for a rental. Rentals require first month’s rent, sometimes last month’s rent, pet and cleaning deposit, along with the standard security deposit. In some cases rent can also be more expensive monthly compared to a mortgage for an equivalent sized home. For several years, FHA has required a 3.5% down payment to purchase a home. Today, there are new FHA programs that only require a 0.5% down payment or less to purchase a home. For example, a buyer can purchase a home for a price of $200,000 and have only a $1,000 down payment. Also, stated income loans are now available which provide alternatives for self-employed buyers looking to purchase a property, however, these types of loans require a higher down payment.
- Location, Location, Location!
This is known to be the number one rule in real estate. It is repeated three times to emphasize its importance and has been said to be the mantra of real estate professionals. Despite the repetition, this fundamental rule frequently gets overlooked by many buyers. It is important to remember the golden rule because location is permanent. You can change the cosmetics or even the full structure of a home, but you can’t change the location. From an investment standpoint, buying the best house on a bad block is not the way to go. The value will not increase as rapidly as it does in other areas, nor will the interest of potential buyers. When the time comes, selling the home might prove to be a challenge.
- Sellers Cashing In
The increase of prices has now allowed many homeowners to have equity in their homes, therefore, sellers are cashing in by selling investment properties or upgrading to a larger home to live in. Only a few years ago, short sales and foreclosures dominated the resale home market. Today, 95% of the homes on the resale market are “traditional” sales which gives buyers more options and flexibility rather than only dealing with a bank. The remainder of homes available are comprised of 3% short sales and 2% foreclosures.
- Incentives Available for New Homes
Several new home communities have reduced their prices in the hopes of staying competitive with the resale market. Builders are offering major incentives to buyers in the form of upgrades and lender credits for closing costs. Real estate professionals typically navigate buyers through different new home options and communities along with showing resale homes. Resale homes dominate the market due to their low prices, however, new homes offer the unique appeal of building your home to your liking. Buyers and sellers should explore all available options with their real estate professional in order to make the best decision for them.