LAS VEGAS HOME SALES COULD TREND UP DOWN OR SIDEWAYS
As we enter the spring selling season, it’s only natural to look for clues about what to expect for Las Vegas home sales. Normally, one of the principal barometers comes from the National Association of REALTORS®. Their Pending Home Sales Index is a national compendium of hard data that can be useful for predicting home sales in Las Vegas. It is both “forward-looking” (an indicator of future activity) and part of a long-standing and continuous sample-gathering procedure. When you take a wide sample of the same data for the better part of a decade (the PHSI has been recorded monthly for nine years now), you can chart the results, note when similar patterns repeat or diverge, and infer meaningful results. Further, when an acknowledged authority like NAR’s Chief Economist Dr. Lawrence Yun provides commentary in plain English that any Las Vegas homeowner can easily understand, the monthly published reports comprise perhaps the best basis there is to project how our own Las Vegas market is likely to fare. Last week’s release of the Pending Home Sales Index and commentary was every bit as authoritative as we have come to expect—backed up by the same rigorously collected data from across the country. As a tool for projecting how upcoming Las Vegas home sales are likely to fare, however, it’s fair to say its usefulness is…uh…less than usual. It’s fair to say that because it is possible to read the entire 700-word document and emerge without a clue as to what you just read. It is, in a word, confusing. But in case it’s just me who is confused—and you are a typical Las Vegas homeowner who would appreciate information about how active our market is likely to be in the next few months—I think I should share a boiled-down version of the report’s key takeaways. The Report’s headline is “Pending Home Sales Cool Down in January” (January’s data is the most recent). From this, we can gather that home sales activity is trending downward. Then, from the first paragraph: “…pending home sales…remained slightly higher than a year ago.” From this, we can gather that home sales activity is trending upward. There follows an explanation of the first idea (home sales trending lower): it was partly to blame because of bad weather in January. A little later, there is a buoyant observation about the second idea (home sales trending higher): “Sales are now 11.0% higher than a year ago—the largest year-over-year gain since July 2013!” (exclamation point added by me, which seems appropriate, given that this is such good news). More good news for Las Vegas homeowners readying to sell their homes dealt with prices: “Last month’s price increase was the largest since April and marks the 47th consecutive month of year-over-year gains!!” (I added the two exclamation points). This, however, was also miserable news: “Home prices ascending…are not healthy” because household incomes didn’t rise as fast. But good news would make that much less of a factor because fixed-rate mortgage rates were really wonderful: “declining to 3.87%, the lowest since October 2015!!!” (exclamation points—oh, you know). Because sales cooled down in January for the highest year-over-year gain in years, I think the report tells Las Vegas homeowners that they might well expect a hot-cold/falling-rising market! Or perhaps prudent homeowners should just forget about this report, get their homes ready to list, and call me…I promise not to share what’s in next month’s report!
AVOIDING GETTING HOOKED ON LAS VEGAS REAL ESTATE TECHNOLOGY
You wouldn’t think that real estate technology could be as addictive as one of those games like Candy Crush or Angry Birds—but don’t tell that to Money magazine. They researched the subject in depth, and they found that two-thirds of recent home buyers said they were addicted to online listings! Come to think of it, who hasn’t found themselves walking away from the computer, wondering what happened to the last two hours? You shouldn’t blame all that on the real estate-connected sites, because the internet has a way of pulling you away from any task by throwing distractions at you, like the latest cat hijinks video. Don’t get me wrong: exploring today’s Las Vegas real estate scene through the web can be awfully efficient. It’s just hard to deny that it’s also easy to get hooked if you succumb to the siren’s call of instantly available, constantly updated information. Curiosity has to be the culprit. When you leave an open paper bag on the floor, any cat (not a YouTube cat; I mean a real one) will jump inside to see what’s there. The same thing happens to someone who is in the hunt for a home in Las Vegas. Once they’ve seen the way the Las Vegas real estate listings get updated, they have a hard time staying away, because something might have just changed. Better check! This could drive you crazy (although there are no documented cases of Las Vegas home shoppers who have been institutionalized for that reason). If you are on the lookout for the Las Vegas home of your dreams, unlike what the cat experiences, every once in a while you’re rewarded. Finding a new listing that meets your search parameters does feel a little like finding the toy in a Cracker Jack box…actually, a lot better than that, because Cracker Jack toys are consistently disappointing, while new listings are at least interesting. The easiest way to handle the addictive call of the Las Vegas real estate online listings is to have me let you know as soon as a qualified property enters the scene. That’s as easy as using my site’s Contact link. That way I can keep an eye on everything for you (and often come up with some extra insights, as well). The whole advance of real estate technology has created a much more informed buying public—and a significantly more sophisticated marketplace. In one poll, nearly half of those queried said that using technology helped them save money. As many as 92% said it saved time. In the same survey, 90% reported: “an overall positive experience” (but failed to reveal if that included any cat videos). The next time you are ready to zero in on the Las Vegas home of your dreams—or find yourself checking out the latest listings with an eye toward selling—do give me a call!
HOUSE FLIPPING OPPORTUNITIES ON THE RISE ACROSS US
When you think about it, it was to be expected: the pace of house flipping activity in communities all over the country almost had to quicken. The market made it all but inevitable—in places where prices are on the rise while inventories remain tight, the conditions are right. A “house flip” in Las Vegas is what you call any Las Vegas house that’s sold within a year of being purchased. House flipping happens when something unforeseen occurs that prompts a buyer to change residences more quickly than anticipated, or (much more often) when the purchase is made in the first place because the buyer sees an opportunity to make a profit. House flipping became all the rage for a while during the housing bubble of the mid-2000s, hitting a peak in 2005. Half a dozen TV series were launched that popularized the adventures of itinerant flippers, tracing their footsteps as they acquired, fixed up, then sold properties for enticingly large premiums. The best of them depicted not simply the money to be made, but also the hard work (and occasional disappointment) that accompanied the house flipping phenomenon. Then came the bursting of the ‘bubble’ and the consequential drop in enthusiasm for house flipping. RealtyTrac, the authority on U.S. housing data, also keeps tabs on the flipping statistics. This month they reported a new trend in action: an increase in the share of homes and condos flipped in 2015: 179,778, which is more than 1 in 20, and “the first annual increase in the share of homes flipped following four consecutive years of decreases.” That total means that the total number of investors who completed, at least, one flip in 2015 was at the highest level since 2007. According to RealtyTrac, the homes flipped last year yielded a national average gross profit of $55,000: “the highest for flips nationally since 2005.” Moreover, they found that the return on investment was more than 45% (up from 35% in 2005). For us Las Vegas, the question is what that might signify for Las Vegas real estate. On the one hand, there are those observers who tend to take the view that whenever house flipping takes off in earnest, it indicates that a real estate market is becoming overheated—that prices are rising too quickly. That is definitely something our Las Vegas could do without. But a slightly more convincing reading was put forward earlier this month by commentator Diana Olick on CNBC. She found that, unlike many of the earlier house flipping participants, “data indicate that flippers in 2015 continued to operate within relatively conservative margins.” That means that they typically bought homes that were not wildly underpriced, then sold them at price points close to their estimated market values. They were also not usually buying with the perilously small financial cushions that typified earlier flippers. That had also been a hallmark in the mid-2000s when the ready availability of cheap credit encouraged the practice. That’s no longer the case. All in all, it seems as if the national house flipping trend is not at all reminiscent of previous overheated (and over-hyped) conditions. Instead, the Las Vegas’s real estate market looks to be more welcoming to anyone who recognizes the sustained value of the house they are looking to buy or sell. I take a great deal of pride in helping them make it happen!
Categories
Recent Posts
