March 2022 | Jeff Howard's Las Vegas Area Real Estate blog

End in sight to the housing shortage? Yes, but experts can’t agree on when…

Real estate investment, Real estate value

I constantly get asked when I think that housing prices will go down, or at least slow down… based on the laws of supply and demand, that will happen when the supply (inventory) increases substantially, the demand decreases substantially, or both.

Here’s an excerpt from a recent article I read; “While 38 percent of experts polled by Zillow recently believe 2024 will be the year inventory returns to 2019 levels, 36 percent pegged 2023 as the year. The remainder believe we’ll have to wait until 2025.”

If you want to read the whole article, go here; https://markets.businessinsider.com/news/stocks/first-time-buyers-inventory-expected-to-rebound-in-2024-1031304612

And keep in mind, in Las Vegas in 2019, inventory levels were much higher than they are now, but they were still low enough to be considered a seller’s market.

Let me explain the way we measure first;

An absorption rate is a mathematical representation of the supply vs the demand; take the number of units available for sale today, and you divide that number by the number of units sold in the past 30 days, and you get your absorption rate.

Example: if there are 8,000 homes available for sale in a particular area and 2,000 sold in the past 30 days, your absorption rate would be 4 months – because if not one new house came on the market and houses magically sold at the exact same rate, it would take 4 months for those 8,000 houses to get sold

The National Association of Realtors says that a balanced market is 4-6 months of inventory (historically, houses in a balanced market appreciate 3%-4% per year);

a number bigger than 6 is a buyer’s market and the bigger it gets the more the buyers are in charge and the slower prices increase (maybe they decrease if that number gets big enough);

a number lower than 4 is a seller’s market and the smaller it gets, the faster prices increase.

Las Vegas has less than 1 month of inventory right (0.6 months today) now and has consistently been less than 1 month since February 2021 with a brief 4 days in August 2021, where it crept over 1 month, but still less than 1.1 months.

How can you have less than 1 month of inventory for that long? Well, when a house hits the market, if it is priced correctly, it will have an accepted offer in just 7-15 days under current conditions, however, it typically takes another 20 or so days to close escrow and transfer ownership to the buyer…

As long as the absorption rate stays below 2, housing prices are going to continue increasing rapidly, and between 2 and 4, still increasing, just slower.

Do you want my opinion? Well, you’re gonna get it. At least in the Las Vegas valley, there is no way we get back to 3 months of inventory before 2024. Of course, I don’t have a crystal ball anymore (it fell in my bathroom and shattered into a million pieces last month), but that is what I believe.

Do you have a need for commercial / industrial / retail buildings or land? Are you ready to buy or sell a home? Do you want a guaranteed cash offer? We can help you with all of that… just call us at 702 SELL NOW or click on this link to my website http://www.702SellNow.com

Choose to have an amazing day….Jeff

COVID is abating and spring is here, Time to deep clean your home

Things are beginning to look like normal again. No mandatory masks and the kids are . back in school. It’s time to really deep clean the house!

The COVID-19 pandemic has kept us in our homes (and others out) for over two years, you can see clutter in every part of your abode and now that we are all getting out more, your home needs to be thoroughly cleaned and disinfected. Also there must be a lot of dirt under your furniture.

Professional home cleaners state that they have been cleaning homes during the past two years for people that allow them to come in and clean. Now it’s even busier now that people are comfortable having these professionals in their homes.

Whether you live in a large or small home your home should be professionally cleaned from time to time, since we get constant dust blowing and hard water buildup. Many professional cleaner say heavy duty cleaning should be done once a month. However, if you pick up after yourself and family members and dust regularly plus clean up after dinner, having a professional company come every other month will make your life much easier.

When you have the cleaning firms come that is the time for a deep clean, which entails everything from top to bottom and includes air vents, doors, baseboards, windows (tracks and sills) and cleaning inside all appliances and drawers.

Also you should have your carpets and rugs cleaned professionally twice a year. The rug cleaners will move your furniture and you will be shocked to see the dirt build up even though you vacuum often.

This is also a good time to de-clutter too. Stuff has gathered over the past two years, and a good house cleaning can’t begin with piles of paper, clothes, and books on the floor, in the closet and elsewhere. If the item you are looking at hasn’t been used in the last year or two – consider getting rid of it. You can pack up these things and donate it to your favorite charity.

And since you’re moving furniture and clearing away items to really dust and clean them you might think about rearranging. The idea is to be creative while cleaning the home that will give it a fresh new look.

Need some references for carpet cleaners or professional cleaning service – No Problem just contact me, Jeff Vegas, your Realtor for life. I can give you names of good, safe and reliable companies for these services.

Choose to have an amazing day….Jeff

Benefits of Homeownership

Owning your own home has so many benefits when compared to renting. Some benefits are intangible and some are very tangible. Below are some things to consider on the road to homeownership.

Tax advantages: you probably know the mortgage interest deduction has essentially been eliminated for many, but taxpayers who have additional itemized deductions may still be able to take advantage of it. And property taxes are still deductible within limits. Homeowners who sell can also take advantage of the capital gain exclusion, up to $250,000 for an individual or $500,000 for a married couple, provided they’ve lived in their home for two of the past five years.

Equity loans: the rates on home equity loans are typically much lower than credit card rates (and often the interest is deductible). The ability to take out an equity loan is still a definite benefit to homeownership.

Leverage: Where else can you obtain appreciation on 100% of an investment when you have only paid for a small percentage of it? Imagine you’re deciding between financing a home and placing $20,000 in the bank. Banks may return 2% interest on your investment (2% × $20,000 = $400 per year). But if you use $20,000 as a down payment on a $400,000 home, and housing prices rise just 2%, you’ve just increased your return by $8,000 (2% × $400,000). Doesn’t that sound better?

Stability: In addition to stable housing payments (principal and interest on a fixed-rate mortgage remains the same amount for the life of the loan), you will not have to worry about being asked to leave by a landlord who decides to convert apartments to condos, for instance. Or the current landlord sells to a new landlord who wants to move his mother in at the end of your lease. It’s a fact that homeowners tend to remain in place longer than renters. So it’s possible to build relationships with neighbors and feel the appreciation of community as well.

Hedge against inflation: The principal and interest of a fixed-rate mortgage don’t change over 30 years, and your real estate taxes, homeowners insurance and homeowners association dues typically increase slower rental price increases, and a 4% to 6% rent increase per year isn’t unheard of in a normal market. (Of course many renters have seen much sharper increases recently.)

Pride of ownership: this has been a part of the American Dream forever. Owning one’s own home and maintaining and improving it provides a feeling of security, a built-in savings plan (equity), and a sense of success. Real estate you own can be passed on to your heirs; your rental can’t. Plus pets aren’t an issue (as long as you follow local codes). Have you ever had trouble getting a rental that would accept Fifi? It happens!

Choose to have an amazing day….Jeff