Factors Converge to Make Now the Right Time to Purchase Your New Condominium Home
Is this a good time to purchase a home? “Ultimately, the decision to purchase a new home depends on your personal situation, but current conditions present an opportune time for purchasing a new home or making the switch from renting to owning,” said Dino Schulatz, vice president, The Federal Savings Bank.
“The present Las Vegas real estate market provides buyers with the opportunity to purchase at values that are still beneath 2008 prices,” Schulatz added. “This coupled with a stable economic forecast for Las Vegas – made even stronger by the continued expansion of a robust technology industry sector; business optimism for stable growth and lending guidelines that protect market integrity makes Las Vegas real estate a good investment.”
From a financial perspective, homeownership remains one of the best ways to accumulate both housing and non-housing wealth, says a recent Urban Land Institute (ULI) research paper, noting that studies show homeowners have a net worth that is 44-times greater than that of a renter.
Citing such factors as tax advantages despite limits resulting from the tax reform bill; greater financial flexibility due to built-in ‘default’ savings with mortgage amortization, and home appreciation; ULI’s research concludes that homeownership not only serves as a hedge against inflation but will always be better than renting for wealth creation.
Consider these factors that are converging to make now an opportune time to buy a home or condo:
- The Southern Nevada real estate market has returned to “normalcy” – and while the numbers show general growth, it can be sustained going forward, according to an August 2019 Greater Las Vegas Association of Realtors’ (GLVAR) report.
- After cutting rates by 25 basis points in July, the Federal Reserve cut interest rates for the second time this year on Sept. 23 by an additional 25 basis points to a new target range of 1.75% to 2%.
- While the Federal Reserve does not have any direct control over mortgage rates, their policies do influence investor demand within stock and bond markets. And shifting demand in those markets can affect home loan rates.
- Mortgage rates have fallen by over a full percentage point since Q4 of 2018, settling at near-historic lows. As of the week of September 9, 2019, the average rate on a 30-year-fixed-rate mortgage was 3.56 percent. A year ago, it stood at 4.6 percent according to mortgage buyer Freddie Mac. This is good news for buyers looking to get more for their money.
- Sam Khater, chief economist with Freddie Mac notes: “consumer sentiment remains buoyed by a strong labor market and low rates that will continue to drive home sales into the fall” while Greg McBride, chief financial analyst at Bankrate referencing lower interest rates on the heels of the Fed’s rate cut, was quoted in a CNBC article: “this represents the single greatest saving opportunity for consumers.”
Homeownership remains one of the best ways to accumulate both housing and non-housing wealth, says a recent Urban Land Institute (ULI) research paper, noting that studies show homeowners have a net worth that is 44-times greater than that of a renter.
Citing such factors as tax advantages despite limits resulting from the tax reform bill; greater financial flexibility due to built-in ‘default’ savings with mortgage amortization, and home appreciation; ULI’s research concludes that homeownership not only serves as a hedge against inflation, but will always be better than renting for wealth creation.
While Las Vegas is still considered affordable in relation to other major metropolitan areas, there is no debating that home prices are on the rise. The latest S&P CoreLogic Case-Shiller index reports Las Vegas prices were up 5.5 percent year-over-year in June, compared with 3.1 percent nationwide. While the GLVAR reports July Las Vegas numbers at a 5.4 percent year-to-year rise in condominium prices and single-family homes at a 3.5 percent rise.
Despite rising home prices, Las Vegas remains attractive to those seeking to put down roots. Long considered a premier destination for vacationers, the city is also now a top destination for homeownership thanks to a strong job market, population growth and the evolving professional sports industry as well as its world-famous entertainment and dining scene.
But perhaps most importantly, at this point in time, buyers are finding Las Vegas’ real estate market a good bet because of its “normalcy.” As Thomas Blanchard, president-elect of the GLVAR put it in a KSNV-TV interview: “From the real estate point of view, we’re seeing a normal healthy stable market.”
