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Leverage used with home appreciation values win win win
Equity win win win
Mortgage interest deduction win win win
Liquidity and flexibility win win win
Need a new appliance. 18 months same as cash financing everywhere. $10 grand reserve will just about cover any other major expense roof HVAC ect . If your ready to buy and committed. Renting is a waste of your hard earned money spent on housing.
But IF the housing market tanks again (and none of us has a crystal ball to know for sure which way it could go) then it could be a loosing situation, especially if someone is in a situation where they need to quickly sell and are forced to take a loss. Everything is cyclical and there’s no way the seller’s market will last forever. The strong seller’s market is at least three years strong now - two years ago I sold my house in the northeast for the price I wanted in one day without a realtor. Based on comps, that house has gone up a healthy/normal 5%-7% in the two years since we sold it. If the seller’s market cools off sooner rather than later and sellers are more willing to negotiate then the difference could easily cover what I paid in rent versus buying now where the giddy sellers have the upper hand. In the meantime, I have put my extra money to use in other ways, including purchasing an investment property back east last year that fell in our laps and was offered to us at 20% below market value and now there are long-term tenants who take good care of the place residing in it.
Part of the reason prices are going up everywhere is due to reduced supply. In markets such as the Bay Area, NY-metro area and Boston supply will remain limited since there is little land available for new construction, but new housing developments are popping up everywhere in Vegas.
At the bottom of this page, there are links to old threads from the mid-2000’s debating overvalued housing. I clicked a few - they were mostly about Florida but it’s pretty amusing and Florida’s market is quite similar to the Vegas market (retirees, people moving for tax advantages and a tourist based economy).
Last edited by Cubicle Dweller; 06-23-2018 at 07:33 AM..
Looks like the Vegas c-d forum only goes back to 2007, but found this walk down memory lane: Are prices dropping for houses?
I thought prices started dropping in 2008, but this thread seemed to indicate the bubble was deflating back in early 2007 - apparently the recession officially started in December 2007 but it kicked into high gear in Sept 2008 with the Lehman collapse.
I saw today that the “prefect” house that just hit the market yesterday already has a contingent offer (granted it seemed to have that WOW factor) and one of the houses where the seller rejected my offer is now contingent. Yet I’m sleeping better at night renting in Vegas while still being able to take advantage of the tax breaks and putting my money in other investments. If I knew I’d be staying in Vegas for at least 8 years I’d take the plunge with less hesitation. What can I say - I’m a bear / nervous nellie/ Chicken Little right now until I see some normal stabilization in the housing market.
As for the Raiders, someone pointed out to me that the NASCAR track was supposed to have the same impact... If the Raiders don’t make the playoffs then that’s only 8 games a year. The area I’m looking at in Summerlin is very strict when it comes to Airbnb and to me that is a good thing. I’d rather not have the Airbnb income option versus dealing with transients traipsing throught my residential neighborhood and partying. That being the case, short-term rentals for income likely won’t be an option.
Last edited by Cubicle Dweller; 06-23-2018 at 09:55 AM..
...The risk of buying now, then 2-3 years from now we have to relocate but the market drops so we’re stuck taking a big loss and it takes 8 months to sell isn’t appealing.
Quote:
Originally Posted by Cubicle Dweller
On the real estate thread, a realtor recommended running the price of an average home versus average income in Vegas and that puts the market at about 20% overvalued which is in line with what the naysayer pundits are saying.
The average home price vs. average income is certainly a starting point.
At the same time, many homebuyers also sell appreciated stock (equities) to partially finance the purchase of the home, and using average income misses that effect. In addition, there is the so-called "wealth effect" where people see the balance of their 401k statements and investment statements go up and feel like buying more house.
We haven't yet seen the full effect of the changes to the corporate tax system reflected in the level of the stock market. The first order approximation of the price of equities is the risk-adjusted present value of its future stream of earnings; and all indications look pretty good right now. If I'm right, the stock market will be higher in a couple of years than it is right now, and its appreciation will be higher than that of the local housing market.
But then again, the last time I tried to forecast housing prices was in the early 1980s when I looked out at Silicon Valley and said to myself, "This valley will be the home of a huge number of unemployed engineers whose jobs have been outsourced/offshored to Asia and hence the price of real estate will fall." So I didn't buy. And I couldn't have been more wrong - yes, ultimately jobs were exported to Asia, but the price of real estate has gone through the roof. So I'm far from an accurate pundit when it comes to these things.
Ultimately, I think timing the market successfully is a very difficult thing to do successfully. You're as likely to get it right as to get it wrong. The best thing to do is look at the demographic variables -- birth rates, death rates, the net of immigration over emigration, etc and compare those to housing starts and local builder's statements of intent regarding housing starts and then roll the dice.
The question is, as Clint Eastwood famously asked, "Do you feel lucky?"
Ultimately, I think timing the market successfully is a very difficult thing to do successfully. You're as likely to get it right as to get it wrong. The best thing to do is look at the demographic variables -- birth rates, death rates, the net of immigration over emigration, etc and compare those to housing starts and local builder's statements of intent regarding housing starts and then roll the dice.
The question is, as Clint Eastwood famously asked, "Do you feel lucky?"
Yep - that’s just it. Can’t time the market and a lot of the time it just comes down to dumb luck. I guess my gut says I don’t feel lucky right now and that pretty much sums up my several tl;dr posts from the last few days
Last edited by Cubicle Dweller; 06-23-2018 at 10:33 AM..
Or, you could look at the whole thing as buying a home, because you have to live somewhere. If you make money at it, good for you. But if not, you haven't been paying the mortgage for someone else with your rent check.
Yes, it's an old fashioned way of looking at it, but it's a lot less to worry about that way...
Or, you could look at the whole thing as buying a home, because you have to live somewhere. If you make money at it, good for you. But if not, you haven't been paying the mortgage for someone else with your rent check.
Yes, it's an old fashioned way of looking at it, but it's a lot less to worry about that way...
No doubt I hear you on that point. I'm just in a situation where I might need to relocate in 2-3 years since Vegas does not have a very robust job market and the sellers market won't last forever. In the meantime, Vegas is a fun place to live.
It's unfortunate that homes are viewed more like stocks these days Foreign investors definitely treat US homes as such. It will be interesting to re-visit this thread in 2 - 3 years and see how it all panned out. The one prediction that can be made with 100% certainty is prices will have either gone up, down or plateaued.
No doubt I hear you on that point. I'm just in a situation where I might need to relocate in 2-3 years since Vegas does not have a very robust job market and the sellers market won't last forever. In the meantime, Vegas is a fun place to live.
It's unfortunate that homes are viewed more like stocks these days Foreign investors definitely treat US homes as such. It will be interesting to re-visit this thread in 2 - 3 years and see how it all panned out. The one prediction that can be made with 100% certainty is prices will have either gone up, down or plateaued.
I understand times have changed, just thought I'd offer a different way of looking at it. I'd say it's anyone's guess what's going to happen in the future. It's been a long time since we had a depression/recession as deep as we had to crawl out from, so things may not work the same as previous cycles. While it seems the feds are trying to keep inflation in check with interest rates, if it kicks off like it was in the mid to late seventies, you'll be glad to have bought...LOL Good luck with your decision...it's never an easy one.
Part of the reason prices are going up everywhere is due to reduced supply. In markets such as the Bay Area, NY-metro area and Boston supply will remain limited since there is little land available for new construction, but new housing developments are popping up everywhere in Vegas.
One thing to keep in mind though about Vegas vs cities like SF, NY, etc is that before the housing bust Vegas was one of the fastest growing cities in the US, and now the trend is back in play again. I read that last year Clark County was the 2nd fastest growing county in the US, (behind only Maricopa/Phoenix metro, which was also one of the fastest growing before). So that new construction has plenty of demand to absorb it. Also Phoenix has a lot of open desert to build out and had way more new construction than Vegas (it has twice the population), yet the prices are comparable to Vegas although they aren't exactly cheap in desirable areas like Scottsdale, Paradise Valley or Ahwatukee. Just as an example there's only 4 houses in Scottsdale for sale not under contract for under $300k. Yet you can still find lots of houses in Henderson (which is somewhat comparable to Scottsdale) for under $300k some of it new construction. So my point is that new construction alone isn't really a good predictor of home prices in general, if demand outstrips supply.
I don't knock you for not buying though, I live in California and won't buy here (still renting myself even though I make 120k a year and could afford a fixer upper or an older starter home). I just don't feel inclined to go into debt and lock myself into a dumpy house that I don't even want to live in, when I know I don't even want to stay here long term. I am much happier owning rentals in Nevada that produce income, and I can move into one later and be perfectly happy living there.
I don't like the fact that many of us seem to have to play musical chairs with regard to housing and where we live these days, but the idea of long term employment isn't what it used to be, and along with rapidly rising/falling/rising housing costs it is forcing people into doing whatever they have to do to deal with it they best they can.
The question is, what's driving the market, and what's going to change that. From what I've been hearing, the post crash professional investor (think hedge fund) influx has ended. If anything they're looking to cash out. I don't think this is speculation for speculation sake. Before the crash it was easy to get loans for that. That isn't the case now. I really don't think Vegas housing prices are being driven by Vegas salaries. If so, they'd never have gotten to these levels.
What seems to be mainly driving it at this point is people are priced out and/or cashing out of LA. So if LV is being driven by the LA market, what's driving that, and is that going to change any time soon? While Vegas is rising, so is LA. I haven't heard about the margin tightening. As long as they just go up in lockstep by percentage, they'll always be pressure on the LV market from LA.
Quote:
Originally Posted by SportyandMisty
The average home price vs. average income is certainly a starting point.
At the same time, many homebuyers also sell appreciated stock (equities) to partially finance the purchase of the home, and using average income misses that effect. In addition, there is the so-called "wealth effect" where people see the balance of their 401k statements and investment statements go up and feel like buying more house.
We haven't yet seen the full effect of the changes to the corporate tax system reflected in the level of the stock market. The first order approximation of the price of equities is the risk-adjusted present value of its future stream of earnings; and all indications look pretty good right now. If I'm right, the stock market will be higher in a couple of years than it is right now, and its appreciation will be higher than that of the local housing market.
But then again, the last time I tried to forecast housing prices was in the early 1980s when I looked out at Silicon Valley and said to myself, "This valley will be the home of a huge number of unemployed engineers whose jobs have been outsourced/offshored to Asia and hence the price of real estate will fall." So I didn't buy. And I couldn't have been more wrong - yes, ultimately jobs were exported to Asia, but the price of real estate has gone through the roof. So I'm far from an accurate pundit when it comes to these things.
Ultimately, I think timing the market successfully is a very difficult thing to do successfully. You're as likely to get it right as to get it wrong. The best thing to do is look at the demographic variables -- birth rates, death rates, the net of immigration over emigration, etc and compare those to housing starts and local builder's statements of intent regarding housing starts and then roll the dice.
The question is, as Clint Eastwood famously asked, "Do you feel lucky?"
As for me, the OP, my hope is that home prices doesn't take a dive before I sell in early 2019, lol. After that, doesn't really concern me whatever happens in Vegas hahahahaha! Californians come see me for a good deal!
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Foreign investors definitely treat US homes as such. It will be interesting to re-visit this thread in 2 - 3 years and see how it all panned out. The one prediction that can be made with 100% certainty is prices will have either gone up, down or plateaued.
