Las Vegas Real Estate News

Californians Still Finding Value In Las Vegas

Californians are still leaving the Golden State and tha's still driving the housing market in Las Vegas, but at a more reasonable pace.

In the past few years, the Las Vegas market has been recovering its home prices at a breakneck pace. This has been caused by a huge number of factors: a solid economy nationally and locally, a very low bottom after the housing crisis, and a California exodus due to the high cost of living in the Golden State, among others.

Home prices continue rise versus last year, but at a more moderate pace. In fact, price growth has reached a more historic and sustainable level.

Californians Still Finding Value In Las Vegas

The Greater Las Vegas Association of Realtors (GLVAR) reports that home prices in August of 2019 were $10,000 higher over the year before ($305,000 versus $295,000).

"Local home prices are still appreciating compared to last year at this time, but at a rate more in line with historic averages," GLVAR President Janet Carpenter told Fox 5 KVVU-TV.

For Californians, that is an extremely low price. In Los Angeles, $305,000 is less than half the city-wide home price average. In San Francisco, the median home price hit $1.7 million! San Diego's home is the lowest of the three and homes prices are over $570,000.

Despite the influx of Californians, the number of homes on the market also increased over the last year. For buyers, that means that there are more choices and a better opportunity to get exactly what they want. For sellers, this means that, while homes might sell a bit more slowly, they are still selling and home prices are holding on well.

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Wondering How Your Home Should Be Priced?

Many real estate agents will help you price your home. That's great. Very often, they'll do a great job, but you should double check it yourself.

Here are the five things to look for when you're pricing your house:

1. Recent sales data - Even data that's a year old can be useless. In many parts of the country, prices have been going up faster than 0.5% per month. Try to look for the most recent sales and pricing data you can find. Much of it's online.
2. Location - The closer to your house that you can find sales, the more likely that you'll find the right price. Sometimes it's hard to find the exact prices and values close to home, but do your best. When it comes to location, you're also looking at trends. If there are a lot of families shopping, they might love that you live on a quiet block or near a playground.
3. Upgrades and cool features - If your home has an upgraded kitchen or even a new roof, it can increase the value of your home quickly. Look for those upgrades that you put in that might not be obvious, like a new furnace or an updated back deck.
4. Style - The layout of your house is a major factor in how much it's worth. When you're comparing other houses to build a price, look for houses that are similar. Not just the number of bedrooms, but also the overall design.
5. How they were sold - Look at how other homes in the area were sold. If they were sold on short sale or a foreclosure, the price will be lower than a normal home sale. You can simply remove those houses from your comparison list.

Wondering How Your Home Should Be Priced?

Once you've found homes that meet these criteria, you're ready to look at every price. Consider the intangibles, like being close to the school.

Use your estimate to compare to your realtor's estimate. You'll know if they're close and ask questions if you have concerns.

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Southern Nevada Leads With Year Over Year Price Increase

Las Vegas saw the largest annual increase in home prices of 20 major metropolitan areas in the US, according to the S&P CoreLogic Case-Shiller index released in late July by S&P Dow Jones Indices.

The S&P CoreLogic Case-Shiller 20-City Composite Home Price NSA Index seeks to measure the value of residential real estate in 20 major U.S. metropolitan areas: Atlanta, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa and Washington, D.C.1

Home prices in Southern Nevada increased by 6.4 percent year-over-year (as of May 2019). The national home price increase was only 3.4 %.

One important fact from the report is that the growth in home prices has slowed over the past few months. This might mean an overall slowing home prices and softening of the home market for the rest of 2019 and 2020.

A similar report from the year before (August 2018 over August 2017) showed a 14% increase year over year. This year's increase is less than half of last year's.

Southern Nevada Leads With Year Over Year Price Increase

"Thwarted by climbing prices for years, buyers are no longer willing to pay any price. There were too few homes on the market and buyers were unable to find houses that fit both their needs and their budgets, so they took a breather," Matthew Speakman, an economist with Zillow, said in a statement in July.

Analysts almost universally agree that the slowing in home prices is due to buyers' unwillingness to pay extremely high prices for homes the way that everyone did in 2007. There's a reluctance to participate in a market that is massively over-inflated and not likely to allow buyers to recover their investment.

This sluggishness is even more marked in other markets. New York, LA, San Diego, and San Francisco only saw a 2%, while Seattle, a perennial hotspot, saw a drop of 1.2%. For Seattle, that a massive drop from last year's 12.6% increases.

There is a move by home buyers to go from purchasing a single family home to a townhouse or a condo. This can provide them with all the same creature comforts with lower costs and often more support from the building's management.

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Which Room Should You Stage

Home staging is the art of designing a home to sell. It’s usually done by an interior designer who has studied the most effective way to make a house look great for potential buyers.

So what is the one room you should stage if you only stage one room? The living room.

Why the living room? Often, the living room is closest to the entrance. It’s also usually the largest room in the house. This is the place to set the stage for visitors and potential buyers.

Which Room Should You Stage

How should you stage the living room?

1. Open up the space - Take some furniture out and make the room feel larger. Often, you have too much crammed into that room. Open the room up and make it a lot easier to walk around - even if you think your furniture is a perfect fit.

2. Use neutral colors - Keeping the color scheme neutral will help to give the buyer a palette that they paint their own ideas onto. This can allow them to fantasize about their own colors and furniture in that space.

3. Be impersonal - Take out family photos and other things that are very personal. If you have art that might be considered risqué or controversial, it should come out as well.

4. Make a focal point in the room - If there’s a natural focal point, like a fireplace or an entertainment center, make it the focal point of all the furniture. Everything in the room should draw your eye that direction.

5. Accessorize well - Using throw pillows and lap blankets, you can give the room a photographic feel. Just focus and don’t go crazy, but those throw pillows that no one really uses can make a room look fabulous.

6. Make minor repairs - If there are nail holes and other spots on the walls that can be repaired, do that. It will only take a few minutes and you can paint over those spots, reducing the “lived in” look.

7. Throw rugs for accent - Using throw rugs to add color and style to a room, especially of the carpeting is drab, can be great and inexpensive. Look for a neutral pattern that complements the furniture.

8. Clean the windows - The fastest way to make a house look great is to clean the windows. Sparkling windows are a great way to let in more light and make everything much prettier in the living room.

Staging just your living room (and, of course, cleaning the house) will take you a long way to selling your house quickly.

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Will Student Loans Keep You From Buying A House?

"Every $1,000 in student loan debt delays homeownership by about 2.5 months, but it doesn't prevent homeownership entirely. In fact, by the time college grads reach their 30s, those with student loan debt have a homeownership rate nearly identical to those who didn't take out loans." - The Federal Reserve

The truth is that everyone, especially the younger generation, has student loan debt. The average student has about $40,000 in student loan debt. Since so many people have that debt, it levels the playing field for everyone.

There has been a slowdown in home sales to younger buyers, but those buyers are now finding themselves able to pay for a mortgage and a home.

Lower mortgage interest rates can help as well. These interest rates are so low that payment can drop by hundreds versus the rates that the student's parent paid for a similar mortgage.

In 2020, the largest number of Millennials will turn 30, a traditional turning point age for home ownership. Many have been paying on their student loan debts for 6 or 8 years already. That will allow them to have a settled credit rating and easily get a mortgage.

Many Millennials have prioritized paying off their student loan debts over almost every other consideration. Many will have their debt paid off in the next few years.

Will Student Loans Keep You From Buying A House?

What to do if you have student loan debt

If you have a lot of student loan debt, there are a few things you can do to make it easier to get a mortgage:

  • Always pay your debt. Never let your student loan debts go into default. There are a large number of payment plans that you can choose from.
  • Consolidate your loans. It can be difficult to keep track of ten different loans from ten different lenders. The likelihood that you're going to miss a payment increases exponentially.
  • Set up autopay. This will allow you to set it and forget it. That should make paying your debt easier and shows a long record of on-time payments on your credit report.
  • Go easy with credit cards. Simply put, credit cards are very expensive money, often four or five times the rate of student loans. Pay off credit cards before you worry about paying off your student loan debt.
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Water Street, Henderson Continues To Grow

The Henderson redevelopment advisory commission approved a notice of intent to sell some land to a development group. That group plans to build a six-floor building near the intersection of Water Street and Atlantic Avenue, right across the street from the future Vegas Golden Knights community ice arena.

The bulk of the building will be dedicated to 120 apartments. 15,000 square feet will be given to retail and restaurants and a similar amount of space to office space.

All of this is part of the city's efforts to rehabilitate Water Street and revitalize the entire area. The ultimate goal is to create an entertainment hub in downtown Henderson and attract people who enjoy an urban environment.

Water Street, Henderson Continues To Grow

"So anybody that wants to give up the suburbia or the suburban lifestyle and move back to the heart of the city and enjoy a walkable community, that's who we're looking for," Tom Wucherer, a founding member of Strada LV, told the Las Vegas Review-Journal.

The city will be paid about $400,000 for the land from the developers. Strada LV will also pay $30,000 to demolish the Chinese restaurant that sits vacant at that spot right now.

This project, and others that the city is working on with other developers, will be part of the revitalized downtown, making the heart of Henderson a must-visit spot for locals and visitors alike. The move for many suburbanites to more densely packed areas is simply to reduce transportation costs and keep everything they need close at hand.

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Baby Boomers Are No Longer The Largest Generation

Millennials are now the largest living generation. Enough have hit adulthood as the Baby Boomer generation has lost enough members that Millennials are now the largest group.

That means that they are also the biggest consumer market, especially for first-time home purchases. Home builders are starting to recognize that there needs to be more small, first-time homes on the market.

Of course, since about the 1970s, there has been a trend to build big houses with the McMansion craze becoming ubiquitous in the 2000's where it seemed that every home sold was a monstrous space with over 3,000 square feet. The problem is that those homes are rarely within reach of the first-time home buyer.

Recently, when mortgage rates rose to over 5%, the housing market ground to a near halt. Now that those rates are backs in the 3's and 4's, there are homebuyers on the market.

"Normally the first-time homebuyer group leads the pack in a housing recovery, and the move-up group fills in later," said Jeff Mezger, CEO of KB Home told Forbes Magazine. "This time around, it was flipped; the millennials delayed buying for a decade, and the industry was fed by the move-up segment. Now, we're finally starting to see a normal housing recovery."

The article goes on to point out that 55% of new homes sales delivered by KB Homes were to first-time home buyers.

Baby Boomers Are No Longer The Largest Generation

Millennials have delayed purchases of a new home for marriage, their career to settle down, and more. This generation and the next younger one, Generation Z, are very gun shy after watching the mess that was created with the housing bubble burst in 2008. They don't see homes as the best and only important investment, as their parents and their grandparents did.

What does this mean for first-time home buyers?

It means that first-time home buyers can look forward to having homes built that will meet their specific needs - smaller and less expensive. That's a change where most first-time homes have been small, older homes built before and shortly after World War II.

What does this mean for sellers?

If your home is smaller, it's probably going to sell faster than larger homes. Work with your real estate agent to stage the house well and get it ready for Millennials shoppers who might love things like wifi and smart locks.

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Housing Market Hasn't Been This Stable In Years

"We're running out of synonyms for stable. Local home prices are appreciating, but at a more gradual rate than they have been in many years." GLVAR President Janet Carpenter said in a statement. "As we've been saying for months, the local housing market hasn't been this stable in nearly 20 years."

What brings that stability?

  • The overall housing market has cooled down over the past few months. Inventory has increased slightly, but it's keeping pace with demand. Both builders and city licensing authorities have been cautious not to go too far with overbuilding.
  • Median sales prices are down in July, 0.3 percent compared to June, but 4.5 percent up from the previous year. This shows a mild softening, but nothing to worry about.
  • At the end of July, there were 7,808 houses for sale. That's down 0.1 percent from June, but 63.1 percent higher than the same time last year. This indicates that the inventory is stable and that it's holding its own against home purchases.
  • Single-family home prices have reached a tipping point beyond which there's a movement away from houses to condos and townhouses. House prices are probably going to lower a little or stay the same and continue to feed the demand at just the right level.
  • Buyers aren't just grabbing anything they can find. They're taking their time and looking for the perfect house. This is because the prices of the houses are high enough to no longer make a house a simple flipping opportunity, but something buyers will need to hang onto for years to recoup their investments.

Housing Market Hasn't Been This Stable In Years

This stable housing market is important for buyers and sellers.

Buyers - Prices will be predictable and there is a steady flow of homes onto the market, both new and preowned. This is the perfect time to relax and take your time.

Sellers - Selling a home can be simple since you know the prices around you are going to remain about the same. If you need to sell fast, you can sell for a little less than your competition and your house will be significantly more attractive. This prevents you from having to guess what the homes in the city will be worth; they will be relatively stable at around the same price for a few months.

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Las Vegas Still Affordable, Despite Rent Increases

The median rent price in Las Vegas increased more than any other metro area in the US in the past year, according to a report published by the website Zillow.

Nonetheless, the rental market is still considered affordable.

The median rental price for all rentals, according to the report, was $1,435, a full 10% increase from June of 2018. This is still lower than rents in other parts of the country and inline with average incomes.

A one-bedroom apartment lists at a median price of $1,475 according to Zillow.

One factor that is keeping the rental rates in Las Vegas in check, despite the increase, is that there is a significant supply of apartments coming online.

"If they're reporting the median rent at $1,400, that's 100% inaccurate. Las Vegas is not anywhere near that. What I can say about the Las Vegas market is that there isn't really a concern about supply because we're releasing so many units," Susy Vasquez, executive director for the Nevada State Apartment Association, told the Las Vegas Sun.

Vasquez told the Sun that the median rental price is closer to $1,000, although no data was provided to support that information.

Las Vegas Still Affordable, Despite Rent Increases

She pointed out that occupancy rates in Clark County remain around 95%, a number that's healthy, but isn't full occupancy, working to keep rates low.

The next highest increase in rental rates happened in Phoenix at 8%.

The demand for apartments is driven by millennials, many of whom have opted not to buy homes after seeing the damage to their parents and grandparents during the housing crisis in the late 2000's.

In spite of the increase, the overall rates in Las Vegas remain lower than places like Seattle and San Francisco, where rates are among the highest in the world.

"We're still a top contender for affordability when compared to similar metropolitan markets," Vasquez said. "Whether it's apartments or homes, we can't build fast enough right now in Las Vegas. We still haven't recovered from when we stopped building from 2008 to around 2012."

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More And More Gen Z Are Buying Houses

Generation Z, or Gen Z, is made of those who were born in 1995 or after. Though they might seem young, they are smarter and have more resources than any generation before them.

This has led to an increasing number of Gen Z'ers to start looking at buying a home. According to TransUnion, the credit tracking company, mortgages were the biggest growth market for credit among this generation with 112 percent growth year over year (2019 over 2018).

According to a report from Bank of America, over 50% of Gen Z'ers are already saving for a home and 59% plan to buy a home before they turn 30.

The summation of the report by TransUnion was that Gen Z are using more and more credit and a larger percentage of that credit usage is going to mortgages.

More And More Gen Z Are Buying Houses

What does this mean for home sellers?

While no generation is homogeneous, there are some things that home sellers should consider if you're thinking of selling to Generation Z.

  • They are the technology age. They might think that an old farmhouse is quaint, but home that's smart is more likely to be their style. It's great for a house to have an older appearance, but it should be wired to make technology easier. If you don't change anything, at least begin accounting for things like WiFi and USB outlets.
  • They are more environmentally conscious than their ancestors. According to every single report that gets issued, it will be Generation Z that will feel the first massive changes in the environment, from rising sea levels to heat waves. This means that they are more likely to be energy conscious. Solar panels and efficient heating and cooling are more likely to be on their list of important things.
  • They are still young. Knowing where the best clubs and concert venues are for out-of-towners will be a great benefit. Also, they will tend to be more interested in great foods and grocery stores. This might mean it will be good to know where the hottest eateries and the most interesting groceries are.

This might not interest every Generation Z'er, but it's probable that this upcoming generation will be more interested in technology than any generation before them.

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