Is Now The Right Time To Buy?
If you are wondering whether or not now is the right time to get a home in Las Vegas, the answer is not black and white. Experts say that the housing market in Sin City is “on fire.” That means that sales continue to surge, regardless of external factors such as inflation rates. The market supply is low, but demand is high, which means that more people are looking for places to buy or rent than there are places available. The demand for housing in Las Vegas skyrocketed during the COVID-19 pandemic in 2020. Today, a mortgage lender will agree that home sales in the Las Vegas area are the highest in nearly 15 years.
Average Price of Homes
While home prices have been rising in Las Vegas for more than a decade, they recently hit a record high in April 2022. Home prices have continued to rise since 2020. In April 2022, the average price of a single-family home was $475,000. That is a 3.3% increase from the same time in 2021, and it is a 26.7% increase from April 2020. Along with being more expensive, homes are also selling faster. About 87.2% of homes were on the market for 30 days or less in 2022, compared with 81.5% of homes staying on the market for a month or less in the year before.
In addition to the regular housing market, prospective homeowners in Las Vegas may also be eyeing the Luxury Market. Like the regular housing market, the Luxury Market has also experienced notable growth in the past few years. As of April 2022, there were 197 homes for sale in Las Vegas with a price point of at least $1 million. That number is up from March 2022, when there were about 173 homes for sale, specifically on the Luxury Market. In February 2022, a mortgage lender will tell you the median home sale price for homes on the Luxury Market was $1.4 million.
Although home prices are rising at rapid rates, experts say the upward trend won’t last forever. The market, they say, is relatively close to a tipping point. Eventually, home prices will even out and make buying a home more accessible to more people. Some studies show that Las Vegas is in the top 10 when it comes to overvalued markets in the US. Markets that are overvalued means that homes in that vicinity sell for about 42% more than their long-term pricing trend. One disadvantage for home buyers and investors in the current Las Vegas market is that investing in an overpriced market brings the risk of getting stuck in the market for a long time before seeing any returns on their real estate investments. Furthermore, with its higher prices, the current market is actually more of an advantage for seasoned homeowners than newer homeowners.
Nevertheless, people are afraid of missing out on the opportunity to buy and sell a home. Therefore, homes that are placed on the market are snatched up quickly. That trend is expected to continue through the end of 2022. Adding to the higher prices and housing demand is the fact that population growth is expected to rise steadily as well. The population rate in Las Vegas is projected to grow by 1.51% from 2020 through 2025. At the same time, the median price for a home will increase by 1.46%. The increasing influx of people and a constant demand for housing means that there will continue to be less supply for housing shortly than there is demand.
In Southern Nevada, which includes Las Vegas, the housing supply is 0.8 months. That figure is lower than the supply level considered necessary to sustain a real estate market. The months’ worth of supply available in a market is generally a good indication of whether the market favors buyers or sellers. Usually, a market that has less than a six-month supply of homes is considered a market that favors sellers. If a market has more than six months’ worth of homes, on the other hand, it is said to have a surplus of homes, which also means it is a market that favors buyers.
Along with the price of homes, the price of rentals in Las Vegas is increasing as well. Although unemployment rates are pretty high, rental vacancies are scarce. In fact, this year, they are at near-record-low rates. In December 2021, Las Vegas was ranked as one of the fastest-growing metro areas in the country. For investors, that is a good sign, as it also means that there will be a growing demand in the foreseeable future for rentals. By 2021, the average rental price exceeded $1,631. That continues a trend of the median rental price increasing by 20.8% on a year-to-year basis. Even within the last month, the cost of a studio apartment in Las Vegas has increased by 12%. The average price for a one-bedroom apartment increased about 4%, and the price for renting a two-bedroom apartment increased to $1,600, which is a 3% increase. Mortgage rates have also risen, along with housing prices. Still, you can always consult a mortgage lender or shop around to get prices from several different lenders before taking out a mortgage and settling on one lender.
The Future Forecast
Like many prospective homeowners, you might be wondering what the pros and cons are of buying a house in Las Vegas now compared to waiting another year. Some experts say that the answer depends on short-term and longer-term real estate investments. Short-term investors may have better luck investing in real estate now. The market is continuing on a trend of steady upward growth despite the lagging economy, which includes rising sales and high home prices. A loan officer in Las Vegas can help you figure out the current market and decide if now is a good time to buy.
Another reason people are hesitant to buy a home now is that they are afraid of home price increases during a recession. However, home prices have remained consistent since the 1960s, mainly because interest rates fall during a recession. Even if you are nervous about getting your next home right now, a good mortgage company in Las Vegas can help you find a suitable loan that works for your budget and your housing needs.