Buying a house in 2021 is like a roller coaster. There’s limited supply across all markets and when you’re trying to buy in Las Vegas in particular, you’re going to be up against some determined buyers. This is particularly true if the buyer is offering cash right off the bat.
Be that as it may, it’s not all an uphill battle. Today’s low mortgage rates could help first-time buyers or low-income buyers find a new home… or will it? Homelight’s summer/fall 2021 survey pulls back the proverbial curtains on the future of home buying in Sin City. Let’s take a look at their predictions.
Market movement will increase
Mortgage rates are a huge driving force behind the housing market. Buyers are taking advantage of those low rates because you could save tens of thousands of dollars based on interest rate alone! But like all good things, rates aren’t going to stay this low forever. 30.4% of surveyed realtors believe that once interest rates hit 4%, buyer activity will slow. Others are a little more optimistic and believe buyers will stay active until rates hit 4.5% or 5%.
Unfortunately, mortgage rates are a moot point in Las Vegas because cash buyers wield all of the power. Cash buyers tend to be investors and not entry-level buyers (or the Average Joe) who often need to take out a mortgage.
Homeowners looking to downsize could benefit
Current homeowners are taking notice of this surge in activity and those who have been toying around with the idea of downsizing are pulling the trigger. 60.5% of realtors say that empty nesters are taking advantage of the higher home prices to make a decent profit.
It isn’t just empty nesters who are looking to sell. Homeowners whose jobs are embracing a hybrid work week (where they can work from home part time, if not full-time) are taking this opportunity to relocate to other areas since there’s no longer a need to commute to the office.
Sellers catch a case of FOMO
Homeowners in general are paying close attention to the housing market and feel like they’re missing out if they don’t sell now while the market is hot. Home prices have increased significantly over the past year – 21.6% to be exact. Why, houses have increased by $10,000 between May and June 2021!
When homeowners see how much their home is worth, it’s not too surprising that they’d sell and invest their profits elsewhere. Even new homeowners are hopping on the selling train. They’re selling their home, pocketing the profits and renting until housing prices go down. That may not be a bad idea for singles or couples with no children, as a one-bedroom apartment is around $1,067, still a 7% increase over last year.
Las Vegas’ housing market could balance out going forward
First-time buyers are experiencing a rough time trying to buy and with investors snatching up listings to turn into rentals or resell at a higher price… It doesn’t seem like it’s going to let up – at least throughout the rest of 2021. And, as businesses reopen and prices continue to surge, the demand for housing isn’t likely to slow.
A low housing inventory could be a problem for buyers because supply isn’t being replenished fast enough and houses are being bought at near breakneck speeds. However, since home prices are predicted to rise by another 10 to 12% over the next year, FOMO could cause more would-be sellers to list their homes – some for a nice profit!