It’s not a secret that we’ve been battling a shortage of homes here in Southern Nevada for a number of years now and in typical “Sales 101” fashion the lack of supply has driven up home prices. With rental costs increasing and mortgage interest rates remaining near historic lows, more and more people are looking into buying a home. The problem that they’re finding is that the prices may have increased past their buying power.
A recent Las Vegas Review-Journal Article confirmed that from the beginning of 2017 to the end of 2017 the median house price has increased by 14% to $267,900. With the continued low inventory there does not seem to be an end in site.
If you’re considering Buying a home in 2018 contact us today at (702) 501-8726! Don’t let home prices go past your budget and miss out on the American Dream!
If you haven’t already heard, it’s a Seller’s Market that’s HOT HOT HOT right now! With the right representation (yours truly) it seems as though listings are going into contract within 48 hours after hitting the market. We continue to have a shortage of inventory and the demand is outpacing the supply.
The photo for this blog is from one of our latest listings. We had 10 offers in less than 24 hours and almost immediately opened escrow!
We’ve found that a properly priced home is seeing multiple offers that could actually drive the price up. That strategy has helped us avoid overpricing the home causing it to sit on the market longer than expected. A house that sits on the market causes some Buyers to ask, “What’s wrong with it that it’s been on the market (blank) days?” …and they’re absolutely right. If the house needs some TLC, you’ll need to properly price it. If it’s absolutely turnkey, you’ll need to properly price it. If it’s somewhere in the middle, you’ll need to properly price it.
Let us help you with coming up with a proper pricing and maximize the profit when selling your home. Contact us anytime. (702) 501-8726 or firstname.lastname@example.org
Recently I met with Mike Cornachio, Branch Manager and Loan Officer with local lender Castle & Cooke Mortgage, and discussed some tips in getting a home loan. We covered a variety of items (credit requirements, job requirements, timeline, etc.) and we decided to film a little Q & A segment to help Buyers out there with the process of applying for a home loan.
Mike has helped numerous clients of mine in the past and not only does he have access to some of the best interest rates around, his fees are some of the lowest offered!
Lately I’ve noticed a number of advertised websites that are offering the convenience of selling your home with one click of a mouse on your computer. These websites (Offerpad, Opendoor, Zillow Instant Offers, etc.) are stating that they’ll offer a competitive sales price for your home and are able to close on your property within days. The problem…..their “competitive offer” is up to 20% less than market value! Their intentions are to pay less than market value and either flip the property for a profit or to underpay for your home and rent it out increasing their rate of return on their investment.
In this Seller’s market where we’re challenged with the lack of inventory, why oh why would anyone be willing to take less than market value?!?! Not only that but the additional service charge from a couple of these companies is anywhere from 6%-12%! Please stick with a local REALTOR® when considering to sell your home. We know the market, we know values, and we have your best interest in mind.
Contact me for a free no-obligation property profile so I can show you what your house would sell for in this market.
Here’s a quick video I did when I use an example of some of our in contract listings that got 20% by not using one of those services.
I had a few minutes this past week to catch up on some recorded TV shows. Within minutes, I witnessed a bit of product placement in one show. Normally I wouldn’t mind… we’ve all seen the occasional Pizza Hut Box, Pepsi Product, Coors Light Bottle in the background of a TV show, etc. But this was for Zillow! To make it worse, they even included dialogue for Zillow in the scene!!
Immediately my focus shifted from enjoying the show to thinking about how incredibly inaccurate much of Zillow’s data is.
I’m a REALTOR® and some might think Zillow makes my job easier… but it actually makes it harder. Understand that their property “Zestimate” is just an estimate created by a computer algorithm… an estimate that they themselves have stated can be off by approximately 9%… not Locally, but Nationally!
Actual studies have been done on this margin of error and they’ve found that Zillow’s prices can be off by as much 42% in some local areas:
That’s nearly half a home’s value or double a home’s value depending on which side of the transaction you’re on!!!
We know that their system is designed to simply compile and analyze “sold home” data in a certain area over an extended period of time in order to come up with their estimates. But it’s not taking into consideration other very important points that a REALTOR would. Buyers are often given bad Zestimates and end up thinking they can get a terrific home at an unrealistic price way below the current neighborhood median. Sellers are given an amount that far exceeds the recently sold comparable properties.
Simply put, Zillow’s info is a mess.
Zillow doesn’t factor in an individual home’s features that can make it more desirable to a Buyer. While not every upgrade or remodel can add value, many can make the home more attractive, which means that it becomes more “sellable”.
There’s a reason why certified home appraisers can’t just look at a property’s Zestimate on Zillow, give it a stamp of approval, and send it to a Lender to be used for a home loan. The Zestimate is not Gospel, yet much of the public incorrectly treats it as such.
Please don’t get me wrong, I’m all for ease/convenience. Nothing is easier than going on your computer or phone and ordering that Pizza Hut Pizza and Pepsi from an app. But I just don’t think incorrect real estate information is very valuable…. certainly not when researching buying or selling a Las Vegas or Henderson, NV home.
Saying goodbye to a successful 2013 will be tough but Kandis and I are gearing up for an even better 2014!
There are a few real estate changes taking effect on 1/1/2014 that will impact both Buyers and Sellers so everyone should be aware of them.
The first is with regards to the Federal Housing Administration (FHA) maximum loan amount decreasing from $417,000 to $287,500. The typical FHA borrower might include a first time home buyer, those looking for a down payment as low as 3.5%, buyers with a higher debt/income ratio or anyone with credit challenges. Luckily while this reduction is substantial, $287,000 still buys a lot of house in Southern Nevada considering that the median housing price as of today is only 189,000!
Keep in mind that the home doesn’t have to close by 12/31/13. It just needs to be in contract by that date in order for the loan limit to be up to the previous cap of $417K. The FHA will provide your lender with a “case number” that will follow the transaction to assure that the loan max will be grandfathered. Otherwise these buyers will have to settle with a maximum borrowing amount of $287,500 which could adjust their buying power. I’m advising my sellers to be aware of the change if they’re considering an FHA buyer for their home come the new year. As long as we’re in contract before that 1/1/14 all parties will be fine.
The second change is that the Mortgage Debt Relief Act will not be renewed for 2014. When it was instituted in 2007, it allowed those Sellers in a short sale situation from having to pay income tax on the waived deficiency difference from their loan amount to the selling amount of their home (up to $2,000,000.00). For example if the homeowner owes $300,000 on their loan but short sells it for $180,000 in 2014, that $120,000 difference will now be treated as “1099 income” and will be taxable at the end of the year. We are still able to have the deficiency of the loan waived assuring you that your Mortgage Company will not come after you for the difference!
As a Real Estate Agent who specializes in short sale transactions, I found that the Mortgage Debt Relief Act was a nice feature in the process but by no means dictated the decision of whether or not to short sell one’s home. If there is a financial hardship and you’re unable to make your ongoing Mortgage Payment, a short sale is still one of your best options in avoiding a foreclosure. Just as before I will recommend that you always consult with a CPA about any tax ramifications.
While neither one of these changes will be catastrophic they may impact your future real estate goals or plans. As REALTORS®, we want to position our clients to take advantage of all situations as they present themselves.
Happy Holidays and we’re looking forward to helping you, your friends, family, co-workers, etc. in 2014!
The process of buying real estate in Las Vegas or Henderson, NV can be a big challenge, especially if you’ve never done it before. Even 2nd-time buyers can easily run into problems.
There are many required steps and lots of laws, regulations, documents, signatures, etc. The negotiation process alone can be overwhelming to the uninitiated. Confusion and frustration can set in if you’re not careful!
Finding good help from a local expert is a must. A knowledgeable real estate agent can make the home buying process smooth and even enjoyable.
We’ve put together a short guide with a few of the best tips for buying your next Vegas valley home. It can help save you time, money, and frustration… click here to view it now!
Up until recently, the fact that interest rates continued to be at record lows meant nothing if you didn’t have an accepted offer. Cash was definitely king as investors came to our valley and bought up everything they could to gain a steady monthly rental income. Hedge Funds and Private Equity Firms would pay $5k, $10k, even $15k ABOVE asking pricejust to secure a home. As much as financed buyers would have loved to get an accepted offer and move forward with their dream home, they just couldn’t compete based on appraisal contingencies.
Having great credit and a pre-approval letter giving notice to sellers that you have serious buying power was as useless as a bag of money in a store where everything is free. While the supply of homes became less and less, the investors continued to gobble up homes. They started at properties valued less than $100,000, then they went after homes up to $125,000, then it was $150,000. All the way up to properties listed at $200,000. There was a total disregard on their part for finding homes that would bring in a cap rate of 10% or more.
With real estate investing there’s a basic rule of thumb…. getting a home that returns a strong capitalization rate. To calculate a “cap rate”, you divide the annual gross rents by the purchase price of the home. The goal is to obtain a property that has a cap rate of at least 10%. Obviously anything greater than 10% is icing on the cake, cherry on top, a successful two-point conversion, etc.
When dealing with individual real estate investors (the “Moms and Pops”) or Small Groups, that 10% return decides whether or not to move forward with buying a specific property and/or the purchase price. Those Hedge Funds and Private Equity Firms were dealing with Millions and Millions of Dollars flexing their muscles and buying every home they could. It was like watching an episode of “Super Market Sweep”. They’re running down the “neighborhood aisles” grabbing home after home and jamming them in their cart/portfolio. This of course dwindled our inventory and caused a surge in property values this past year where some areas have seen an increase close to 40%!! Due to their actions, there was very little inventory. As I referenced in my last blog post, the supply was outweighed by the demand.
While they were successful building their portfolio of rental homes, they were spurned by the monster they created. This “Frankenstein” rental market became flooded and property values increased to a point where the cap rates were maxed at 9%, then 7% and when these groups finally decided to stop buying, some rental returns were as low as 5%! Even with the mass bulk they accumulated, that return was not going to cut-it for their investors and they stopped buying in Southern Nevada for the time being.
So what does this actually mean for our housing climate and the opportunity out there for financed buyers? It means that the individual home buyers now have a chance since they’re not competing against these Hedge Funds or Private Equity Groups. Instead of competing against potentially ten other buyers and their offers, our competition has been reduced and the market has stabilized, returning to a more “normal” housing climate… oh and by the way, as of today the interest rates are still around 4% depending on the loan type. It might actually be cheaper for you to own than to rent!
Sure the home values have increased locally but highly intelligent economists throughout our country still believe that our Southern Nevada Housing Market is undervalued. You’re able to take advantage of historically low interest rates with a low down payment, own versus rent, and make the American Dream a reality! We all strive to make a better life for our families and owning our own home is one of the most impactful actions to achieve that success.
To get started seizing the opportunity and making your dream a reality, contact us today!
Everyone knows that with sales, supply and demand helps with determining the pricing of goods. Whether you’re a vendor selling the best hotdogs on the street corner or your name is Spacely and you’re selling sprockets, the fact is that if you have more of a product than there are buyers, an increase in the product’s value can stall. On the flip side, if there is less availability of a product and too many buyers, your sales can explode allowing your prices to increase higher and higher!
These same principles apply in my field of Real Estate. Just as I noted in my last blog, after an extreme shortage of homes available here in Las Vegas (less than a one month surplus of available homes), our home inventory has nearly doubled since the beginning of summer. It’s caused many here locally to wonder if we’re heading for another “bubble” and if we can expect prices to drop. I chalk this up to an overreaction by those who are unfamiliar with the fact the prices have just temporarily stabilized after a recent flood of homes being listed for sale. This started with the slowdown of investors gobbling up homes to rent out and the combination of current homeowners deciding that the time was right to sell with the property values increasing.
Another key factor is that historically the beginning of Fall through to the Winter months is the slow time in real estate. During these seasons a lot of families have already settled in to their current residence and are not looking to relocate during the school year. However many are forced to move for a new job, outgrew their existing home, are done renting and want home ownership, etc. There is still plenty of movement happening….especially with the continuation of ridiculously low interest rates!
The recent article I read on www.vegasinc.com shares my opinion. You can read it here:
The key thing to remember is that we’re still at a National Shortage for inventory and homeowners have priced their homes accordingly because of that. It’s just instead of a home being on the market only a few weeks before getting an offer, it’s now slightly longer as long as the price is realistic and within reason. There will always be buyers and sellers. It’s just a matter of realizing who benefits from the current “supply and demand” situation.
To find out if you can take advantage of the current situation to buy or sell, contact me today to get started.