As seen on A&E’s hit TV show Flipping Vegas, Gady Medrano is no stranger to the challenges of the ever-changing real estate market. With more than a decade of real estate experience with both residential and commercial properties, Gady truly has seen it all. Our local realty reality celebrity explains some hot topics of interest for the Las Vegas real estate market.
Several loan programs today are making it less expensive to buy a home than paying the move-in costs for a rental. Rentals require first month’s rent, sometimes last month’s rent, pet and cleaning deposit, along with the standard security deposit. In some cases rent can also be more expensive monthly compared to a mortgage for an equivalent sized home. For several years, FHA has required a 3.5% down payment to purchase a home. Today, there are new FHA programs that only require a 0.5% down payment or less to purchase a home. For example, a buyer can purchase a home for a price of $200,000 and have only a $1,000 down payment. Also, stated income loans are now available which provide alternatives for self-employed buyers looking to purchase a property, however, these types of loans require a higher down payment.
This is known to be the number one rule in real estate. It is repeated three times to emphasize its importance and has been said to be the mantra of real estate professionals. Despite the repetition, this fundamental rule frequently gets overlooked by many buyers. It is important to remember the golden rule because location is permanent. You can change the cosmetics or even the full structure of a home, but you can’t change the location. From an investment standpoint, buying the best house on a bad block is not the way to go. The value will not increase as rapidly as it does in other areas, nor will the interest of potential buyers. When the time comes, selling the home might prove to be a challenge.
At the start of 2013, new laws affected the housing market which caused a lack of inventory. The shortage of homes available for sale created an increase in prices with bidding wars across the valley. The state of the market was a cause of concern for most. Soaring increase in price can potentially be problematic because it is typically not stainable. During the second half of 2013 more houses started coming on the market, which helped to balance the level of supply and demand. Now inventory levels have been slowly increasing. There are roughly 7,900 single family homes on the market, which is more than double the inventory than at the beginning of 2013, where only 3,400 homes were available. This has now increased the average time a listing is on the market to 60 days. However, homes remain affordable as the medium price for a single family home is $185,000.
The increase of prices in 2013 has now allowed many homeowners to have equity in their homes, therefore, sellers are cashing in by selling investment properties or upgrading to a larger home to live in. Only a few years ago, short sales and foreclosures dominated the resale home market. Today, 76% of the homes on the resale market are “traditional” sales which gives buyers more options and flexibility rather than only dealing with a bank. The remainder of homes available are comprised of 15% short sales and 9% foreclosures.
Several new home communities have reduced their prices in the hopes of staying competitive with the resale market. Builders are offering major incentives to buyers in the form of upgrades and lender credits for closing costs. Real estate professionals typically navigate buyers through different new home options and communities along with showing resale homes. Resale homes dominate the market due to their low prices, however, new homes offer the unique appeal of building your home to your liking. Buyers and sellers should explore all available options with their real estate professional in order to make the best decision for them.
For more questions or real estate tips, you can contact Gady Medrano at 1-800-759-1348 and www.GadyRealEstate.com