Category: Real Estate Tips and Advice

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Where Are Mortgage Interest Rates Headed In 2019?

Where Are Mortgage Interest Rates Headed In 2019? | Simplifying The Market

The interest rate you pay on your home mortgage has a direct impact on your monthly payment; the higher the rate, the greater the payment will be. That is why it is important to know where rates are headed when deciding to start your home search.

Below is a chart created using Freddie Mac’s U.S. Economic & Housing Marketing Outlook. As you can see, interest rates are projected to increase steadily over the course of the next year.

Where Are Mortgage Interest Rates Headed In 2019? | Simplifying The Market

How Will This Impact Your Mortgage Payment?

Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.

According to CoreLogic’s latest Home Price Index, national home prices have appreciated 6.2% from this time last year and are predicted to be 5.1% higher next year.

If both the predictions of home price and interest rate increases become a reality, families would wind up paying considerably more for their next homes.

Bottom Line

Even a small increase in interest rate can impact your family’s wealth, so don’t wait until next year! Let’s get together to evaluate your ability to purchase your dream home now.

Is the Real Estate Market Finally Getting Back to Normal?

Is the Real Estate Market Finally Getting Back to Normal? | Simplifying The Market

The housing market has been anything but normal for the last eleven years. In a normal real estate market, home prices appreciate 3.7% annually. Below, however, are the price swings since 2007 according to the latest Home Price Expectation Survey:

After the bubble burst in June 2007, values depreciated 6.1% annually until February 2012. From March 2012 to today, the market has been recovering with values appreciating 6.2% annually.

These wild swings in values were caused by abnormal ratios between the available supply of inventory and buyer demand in the market. In a normal market, there would be a 6-month supply of housing inventory.

When the market hit its peak in 2007, homeowners and builders were trying to take advantage of a market that was fueled by an “irrational exuberance.”

Inventory levels grew to 7+ months. With that many homes available for sale, there weren’t enough buyers to satisfy the number of homeowners/builders trying to sell, so prices began to fall.

Then, foreclosures came to market. We eventually hit 11 months inventory which caused prices to crash until early 2012. By that time, inventory levels had fallen to 6.2 months and the market began its recovery.

Over the last five years, inventory levels have remained well below the 6-month supply needed for prices to continue to level off. As a result, home prices have increased over that time at percentages well above the appreciation levels seen in a more normal market. 

That was the past. What about the future?

We currently have about 4.5-months inventory. This means prices should continue to appreciate at above-normal levels which most experts believe will happen for the next year. However, two things have just occurred that are pointing to the fact that we may be returning to a more normal market.

1. Listing Supply is Increasing

Both existing and new construction inventory is on the rise. The latest Existing Home Sales Report from the National Association of Realtors revealed that inventory has increased over the last two months after thirty-seven consecutive months of declining inventory. At the same time, building permits are also increasing which means more new construction is about to come to market. 

2. Buyer Demand is Softening

Ivy Zelman, who is widely respected as an industry expert, reported in her latest ‘Z’ Report:

 “While we continue to expect a resumption of growth in resale transactions on the back of easing inventory in 2019 and 2020, our real-time view into the market through our Real Estate Broker Survey does suggest that buyers have grown more discerning of late and a level of “pause” has taken hold in many large housing markets.

Indicative of this, our broker contacts rated buyer demand at 69 on a 0- 100 scale, still above average but down from 74 last year and representing the largest year-over-year decline in the two-year history of our survey.”

With supply increasing and demand waning, we may soon be back to a more normal real estate market. We will no longer be in a buyers’ market (like 2007-February 2012) or a sellers’ market (like March 2012- Today).

Prices won’t appreciate at the levels we’ve seen recently, nor will they depreciate. It will be a balanced market where prices remain steady, where buyers will be better able to afford a home, and where sellers will more easily be able to move-up or move-down to a home that better suits their current lifestyles.

Bottom Line

Returning to a normal market is a good thing. However, after the zaniness of the last eleven years, it might feel strange. If you are going 85 miles per hour on a road with a 60 MPH speed limit and you see a police car ahead, you’re going to slow down quickly. But, after going 85 MPH, 60 MPH will feel like you’re crawling. It is the normal speed limit, yet, it will feel strange.

That’s what is about to happen in real estate. The housing market is not falling apart. We are just returning to a more normal market which, in the long run, will be much healthier for you whether you are a buyer or a seller.

Go slow? Hell no! Las Vegas Real Estate remains HOT in June 2018

The chart above indicates the number of resale single family homes DECLINED 10% from June 2017, however prices rose 13% over the previous June. But that is a small part of the story. Inventory of all homes in the valley is a VERY tight 1.4 months (traditionally, a 6 month supply is considered normal). Worse yet, if you are a buyer looking for a home below the MEDIAN PRICE of $293,000, you have only a 20-day supply. And worst of all, those looking for $250,000 and below, you have only a 15-day supply! That means you must act quickly Multiple offers are the norm in this price range and GOOD HOUSES are sold in a matter of 3-4 days!

Why is the Las Vegas housing market so hot? Compared to the median price of $850,000 a San Francisco Bay Area home, our $293,000 median for resale homes is a steal. Our $370,000 median price for NEW homes is a bargain as well. Yet, when you PAY over a million dollars for a home here, you can end up with a newer, OR NEW, highly upgraded home with a pool, not a clapped out 1960’s era home with easy acces to a one hour commute to work!

Our inventory is low because we who live here love the city and valley and do not want to move. The lack of a personal income tax and low property taxes make this an affordable city with great roadways, low congestion and a fabulous mix of retail, culture (yes, don’t snicker), sports, outdoor life, bicycle and hiking trails and restaurants. My wife and I just drove 3 hours to Brian Head, Utah, to spend a weekend hiking and ATV’ing though the mountains, complaining only about the chilly evening temperatures. Easy drive, wonderful weekend, easy drive up and an easy drive home. No bridge tolls, no 10-20 mph bumper to bumper traffic!

A recent article written by Eli Segall (July 10, 2019) in our Las Vegas Review Journal pointed out that four of the master planned communities in the Las Vegas Valley rank in the top twenty communities nationwide in the number of NEW HOMES sold! Those are Summerlin and Skye Pointe in Las Vegas, Inspirada and Cadence in Henderson. Each of these communities is reporting huge double digit gains over the previous year. I highly recommend you get a copy of that newspaper and give it a read.

Summit Properties real estate agents are busy! In fact, our listings are going under contract so0 quickly, we frequently have only one current listing available! Check us out at . Our agents are also managing to help their buyers win in multiple offer situations, often without being the highest price offered. We are also PROTECTING our bvuyers from exposing themselves to the dangers of “overbuying”, such as committing to pay an obscene amount over the appraised price. We use the appraisal to protect our buyers. We lived through 2006 and 2007!

So if you want to escape California and Las Vegas is a possibility, contact us through our website. We are here to assist and support you in your move to Henderson, North Las Vegas or Las Vegas.






Summit Properties

9670 W Tropicana Ave #115  Las Vegas, NV   89147                   

Summit Properties - Las Vegas Real Estate Agents