If your Las Vegas valley house is valued below $300,000 this may be the perfect market to consider selling your house and “moving up” to your next home.
1. Low Housing Inventory
The housing inventory, the number of homes available for sale in this price range, is currently very low.
During the recession, many of these homes were bought up by large institutional investors to be used as rental properties. To make matters worse (or better if you’re a seller), this lost inventory is not being replaced by new construction. Builder’s have instead focused on higher price points in designing their new homes.
Basic economics explains the rest:
Low supply = unmet demand; unmet demand = increasing prices
We’ve recently been working with a buyer in the $250,000 – $280,000 price range. He has been pre-approved for $300,000, has great credit, and will be putting 20% as down payment. Following are summaries of his last two offers:
- Multiple offers on a home that had an asking price of $250,000. His final offer was $260,000, with an offer to pay the difference if the house did not appraise for that price. The seller accepted an offer from a cash buyer.
- He was the first offer on a house where the asking price was $275,000 – his initial offer was $280,000. We heard back in less than 24 hours that the seller had accepted another offer. I don’t know what the competing offer was, but our buyer wasn’t even given the opportunity to counter with a “highest and best” offer.
2. Rising Interest Rates
Interest rates are still near historical lows, but they are beginning to move up and are projected to be closer to 5% before the end of 2017.
Its hard to predict the full impact of higher interest rates, but its reasonable to assume that it will drive some buyers from the market, and will increase the long-term cost of purchasing your “move up” home.
3. Softer High End Markets
Depending on the price point of your “move up” house, you will likely find a “softer” market than that one which you are leaving. While by no means weak, the higher priced markets tend to have greater inventory, fewer buyers, and longer sale cycles.
Want more information on the value of your house, or what homes are available in your “move up” neighborhood, please contact us today.