fbpx Should I Wait For ‘The Crash' To Buy A Home In Las Vegas? - Las Vegas Real Estate

Many buyers got priced out, or emotionally exhausted trying to purchase a home this year & will continue renting instead. This specifically impacted 1st time buyers, who hadn’t realized appreciation in a home they’d previously purchased. It can be exhausting, writing offers & not getting one accepted. My clients who don’t have a large ‘over appraisal’ budget, or 20% down have been able to purchase beautiful homes. (You only need a minimum of 3% down by the way.) Right now in Fall of 2021, it’s even easier as much of your competition just signed a 1+ year lease, rates are still low, & you have a game plan that’s been proven in the most demanding market below.

A lot of it has come down to a few things. 1. A willingness to keep trying (we wrote an average of 6 well-informed, competitive offers in the height of demand). 2. Move quickly! Even if you can’t be there with them, have your agent do an interactive video walkthrough the DAY a ideal home goes to market. 3. Be prepared! Don’t just prepare to see the home, prepare to buy it if it’s right. Get pre-approved for financing if not planning to buy in cash. Check your credit, bank accounts, & sit down with your REALTOR to review costs to close. 4. Work with an agent who knows what the home will appraise for. (My study of appraisals netted ‘21 buyers up to $10,000 of equity at closing even during the buying frenzy this summer!)

I’m hearing from some buyers who could purchase, that they want to wait for the next 2008-style crash. I understand hesitation if you’re shopping near the top of your budget & hoping for a windfall price reduction. We don’t believe it’s coming & here’s why buying while you can may be the best financial decision for your future.

Reasons 2021’s Appreciation Should Not Lead to 2008 – 2.0

  • In 2008 we had an overabundance of homes for sale. Supply & demand eventually caught up with hype & loose lending practices that no longer occur.
  • In the 2010’s we’ve had cautious builders underbuilding. Builders produced about 1/2 of new construction starts per 1 Million people in the 2010’s vs decades past. Not only the 2000’s, but also the 1990’s, 1980’s, & even the 1970’s according to this article from Business Insider.
  • Estimates say it will take 4-5 years for builders to catch up with millennial demand. (Supply lagging behind demand for another 1/2 decade)
  • Many moving from high state-tax areas (like California) to Las Vegas’ no state-tax environment can see savings that more than cover their yearly mortgage
  • 18-24% appreciation seen in many neighborhoods throughout Las Vegas does seem historically high. Many think it’s a surge awaiting correction But, you also need to remember that reported inflation percentages don’t seem anywhere near so much. However, the FED’s M2 money supply increased from year’s start 2020 ($15.24 Trillion) to September 2020’s $18.72 Trillion. To me this presents an interesting correlation to our minimum appreciation of about 18%.
  • If you’re seeing the jump in prices as astronomical, you’re probably still thinking of those dollar’s worth in 2019 valuations. While the price tag on a home is certainly larger, tell me you haven’t seen 18-24% increases on grocery items.
  • While there will always be variations in real estate valuations, historically they’ve beat out inflation over even the medium term.
  • The FED is likely going to need to raise interest rates soon. Lenders will start issuing loans with higher monthly payments when this occurs.
  • The 18-24% appreciation years are probably behind us. What we’ll likely see is 4-5 years of more standard appreciation of 3-5% while you wait for 2008 to (not) return. At $2,000/month (before annual rent increases) you’re looking at $24,000/year to rent. That’s $120,000/5 years before we’re even projected to have supply/demand stability. If you rent those years you’ll be left with no equity to show for it.
  • I believe you SHOULD buy for the reasons above if you can. If you have questions about your specific situation, I’m always happy to hear from you. I don’t hard sell my clients. I firmly believe in doing what is best for each individual. My business grows when my clients get what they really need. Have a look here at what’s being said about my performance.