Second Bubble Far From Bursting

 

 

Las Vegas home prices continue to rise, outpacing all other metro areas nationwide.  In fact, residential home prices gained an unbelievable 2% in February alone, the largest single month gain since May of 2006.  Economists attribute the gains to continued low inventory in the valley, historically low mortgage interest rates, and improving employment numbers.

In an odd twist of fate, improving home prices might actually help add to housing inventory as homeowners who have wanted to sell, but have been underwater on their homes, find price points at which it makes sense to finally put their homes on the market. It remains to be seen if this potential increase in inventory will slake demand and push prices down again in the ultra-hot Las Vegas housing market. Many homeowners are also expressing confusion as to whether current market conditions are right for listing their home. Many are just beginning to reach the absolute minimum price levels at which they could list their home and not take a significant loss on the transaction.  Many have been waiting years for this moment.  But then they pause to wonder if prices are going to continue to escalate at their current rate.  If so, why not wait a few months before listing their property?  Perhaps they could actually make money on the transaction?

It is very difficult to spot absolute market peaks, perhaps even more difficult than spotting bottoms. While I have said for months that I don’t believe that the oft-mentioned “shadow inventory” will ever make an appearance here in Las Vegas, I do believe that current market conditions are unstable, unpredictable, and being driven by more than just hard economic data. That being said, I can’t tell you if this is the perfect time to sell your Las Vegas home or not.  What I can tell you is that this may be the perfect time to refinance.  Home prices are attractive, and refinance rates are at all-time lows.  There really seems to be no better time to initiate either a rate and term refinance or a cash out refi...especially if you are going to use that cash to re-invest in Las Vegas properties.  It might seem hard to believe in this extremely hot market, but we are still finding great investment deals for our clients.  If you are interested either in Las Vegas real estate investing, or in a great referral for your refinance deals (I have a wonderful broker I’ve used for years), give me a call.  I’d be happy to chat.