On January 2nd I gave you my 2019 Predictions from a Cloudy Crystal Ball. It appears I was pretty close on most of my predictions so far for this year. With the summer upon us, I felt there was a need for some updates to give you the best information I can on the current housing market in Vintage Vegas.
The market for Vintage homes is still great. We don’t have people lining up bidding up a limited inventory of homes like we did last year so prices are settling down to a reasonable rate of appreciation now. Buyers now have choices and are looking for just the right home for them at the right price. I personally have a dozen buyers on my list and not one of them are in a hurry to pay too much for a house they don’t really want to just settle for.
In the whole valley, there is currently about 3.5 months of inventory to choose from. The perfect market would be six months inventory but this is the best we’ve seen it in over a decade. The 89104 Vintage area has just two months inventory yet the 89169 (Paradise Palms) area has four months of inventory. The McNeil/Westleigh area, 89102 has six months or more inventory at the moment.
Values are not coming down but sellers are having to be more realistic on their pricing. Last summer you could price your house at most anything and get multiple offers because of the short supply of houses on the market. Those days are over. Yes, that is what I said at the start of the year and it is still true. While there is more inventory right now there are a lot of houses that are just way overpriced for our current market. There are Thirty homes for sale in the Paradise Palms area right now and Eighteen of them are overpriced for what they are. Too many people are seeing the “Great” houses that sold for high prices in that area and think they can get the same prices when their house is not of the same high caliber. The market does not work that way and the buyers are holding back because of it. I’ve had a few clients that I just could not list their homes in good conscience because of what they felt their homes were worth. They found other agents willing to list them. Those houses sat on the market for months with no offers or low ball offers. In time they lowered the prices and when they finally got to the price I told them months ago the houses have finally sold. In the 89104 area houses are selling in a matter of days when they are priced right. With only a two months inventory in this area, there is no reason a house should be on the market for three or four months unless it is overpriced for its current condition. While it is my job to get a seller the most we can for their home I don’t feel I’m doing them a service by putting their house on the market when I know there is no way we are going to get anything close to what they’re asking. I slip up and do it once in a while for a good client and it never works out for either of us in the long run.
There has been a lot of news lately about Southern Nevada home appreciation lagging. You have to understand that those articles are about the average for the whole valley. There are areas of the valley that are still appreciating at a higher than the national averages. The higher end market is flat. They are seeing no appreciation year over year and some of them are even dropping a bit. Houses over $350,000 or more are seeing the least year over year appreciation at the moment. Paradise Palms only saw a 2% increases year over year for the month of May. The 89104 area saw an increase of 8% year over year for May. I study the market weekly and do my best to know what areas are doing what so I can advise both sellers and buyers of what is really happening so they don’t have to work with “news” that is just general and not a good reflection of what is happening in the Vintage areas.
Because of reports by the Federal Reserve when I wrote my last market report — I was wrong. The Feds had predicted two more rate increases in 2019 and they backed off of both of them. Mortgage rates have dropped for the last seven weeks and are now the lowest they’ve been in two years. Mortgage applications are up 40% and refinancing is up 20% right now due to these low rates. Because of the current rates you can buy a home 10% higher priced than you could at this time last year with the same payment.
Nothing has changed there since my last report. People are still moving to Las Vegas and even more building projects have been announced. Seems there is no slowdown in sight at the moment.
There is not a day that goes by that I don’t see someone yelling “BUBBLE, BUBBLE” yet they don’t provide any information that would show a bubble is coming. Even during recessions, housing prices have increased an average of 3% in history. Housing prices do not cause bubbles. I wrote about this subject in depth in September so I won’t labor on it here. Check out what my experience and research show by CLICKING HERE.
Before the housing crash, there were about Fifteen Thousand Real Estate Agents in the Las Vegas Valley. During the crash that dropped down to about Seven Thousand Agents. The part timers and people just looking to make fast, easy money dropped out. Once again everyone is becoming an agent. Last reported count there is about Sixteen Thousand Real Estate Agents in the Valley. Many are just part-time but a lot of full-time people looking to jump into this market. There is nothing wrong with new agents. We were all new at one point.
The problem we are seeing though is they will list any house at any price. They are not doing the sellers, buyers, the market (or themselves) any favors doing this though. When it comes to the Vintage homes they don’t have the experience to know why two houses on the same street can have a 35% to 50% price difference. Only experience will do that. I get called often when someone has used an agent from out of the area to buy a Vintage home asking if I can now help them with problems they are finding in the home after they’ve bought it. If you don’t have the experience with Vintage homes you don’t know what to look for or how to handle possible problems. There are other agents that work with Vintage homes that get the same calls as I do. It is easy to sell homes in new areas. They are new, not much wrong with them and they are cookie cutter so they are all the same. That is not the case with Vintage homes. You need to know what you’re doing to best serve your sellers and buyers if you want to deal with Vintage homes.
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