Over the past several years I have noticed a steady increase in housing prices generally across the board. Title company sends out updates on a map annually as to how the previous year performed by zip code.
Across the board for at least the past two years there have been steady increases in the market. As of the date of writing this article we currently see approximately 9000 homes, condos, and townhouses for sale in the Vegas valley area. Out of which approximately 400 are short sales and an additional 300 are bank owned foreclosures. This means out of the 9000 for sale 700 are distressed or about 7.8%.
In a desperate economy this number would be much higher. When I obtained my Realtor license back in August 2012 this number was much more grave and was much higher.
Here is the 2015 appreciation map shown by zip code. Depending upon the zip code there can be wide range of price changes. This map does not indicate actual price values nor does it show the appreciation rate. This is the relative price change reflecting all sales in the zip code. Thus, an inexpensive home that may have changed from $175,000 to $200,000 (12.5% increase) is compared with the same home which changed from $1,000,000 to $1,300,000 (30% increase). Thus, these two would be averaged together to get a 21.25% change if these were the only two homes sold in the zip code.
The question that most people ask me is should I buy now or buy later. Well, that is a difficult question to answer without having a crystal ball in the future. If interest rates stay competitive and low then you may want to take advantage of that today and save money in the future just because of the low interest rates.
The second concept to consider is that will housing prices keep going up? If they do at this same rate then you could expect to pay 10% or more for that same house a year from now. Thus, that $200,000 home today would be $220,000 a year from now and assuming the same interest rate would be $242,000 in two years.
With an increase in purchase price and an increase in interest rates could price you out of the market if you wait too long.
However, playing the naysayer and assuming prices don’t go up in the future you may still have to wonder about interest rates and if they will increase.
There is always uncertainty in an election year as well. Especially one after a double term presidency. Markets can fluctuate greatly waiting or expecting what a new presidency (or change of party) will do to the economy.
My suggestion for all of those who are sitting on the fence on buying should really take a close look at your credit, your income, and your buying ability. Then speak with a good lender about your buying options. If you are able to buy then get the ball rolling. If you are not able to buy because of credit or some other issue then a lease option may be your next best choice. Because in a lease option you are buying the right to buy at a later date or time.
Whichever you decide make sure you have all of your information together and in place so you can make the right decision.
And if you decide that starting on the road to home ownership is right for you then you can move forward with confidence that you are doing the right thing.
Good luck in your purchase.
Kevin A. Dunlap
Realtor, Investor, Entrepreneur
Founder of Trident Investments Group, The oldest creative real estate company in Vegas