Imagine you're sitting at an auction. An item comes up for bid. You really want this item. When the auctioneer mentions the name of the item, you look around the room to see that no one was paying attention. You get this sense of adrenaline by thinking you're going to be the only bid. The auctioneer starts with "I'll be starting this bid for the item at $20. Do I hear $20"? Your hand shoots straight up towards the sky. Paddle in hand and a smile on your face. You take another glance around the room, and realize that everyone else has their paddle up. The only difference is that their opening bids start at $100,000 and their paddle is more attractive looking. That's what the housing market in Las Vegas feels like at this exact moment in 2014.
In cities like Las Vegas, San Francisco, San Diego, prices have climbed by as much as 20% or more in the past year, well above the national average of 13%, according an article posted on CNN's Money Blog earlier this morning. What this means is that home buyers, not to mention first time home buyers, are being thrown into the professional leagues of home purchasing right out of the gate. A game that used to only be played when a house was being sold at prices above $400,000. Now you have more than 90 bids, especially in the Las Vegas Housing Market, for homes being sold for under $150,000.
Why are we seeing the competitiveness in the Las Vegas Housing Market? The underlining fact is that most homes are being held onto by the home owners until the housing market improves. This means that fewer homes are available for purchase than ever before. The irony here is that now, more than anytime, is the best time to put your house up for sale.
Imagine yourself holding a garage sale. You price an item. You have two individuals dueling for the chance to own this item. All the sudden, a third and fourth individual step in increasing the competition. Now, the price for the item has risen well above
your asking price. You just hope it keeps going, until one is left standing. Well, you could have that right now in the housing market in Las Vegas. You put up your home for $210,000. Because there are only a handful of homes available, everyone is going to put in their bids. Are you going to get the price you wanted? No. You're going to get more.
If you read our last article, you would understand what is going on a bit more. In San Francisco, giant Tech companies like Google and Facebook are buying houses, left and right, and then selling them to their new hires who are relocating to SF for their new job. They are also providing a ride to work with streaming wifi and all the bells and whistles. This is causing a huge issue with the residents of San Francisco, mostly because they do not want to see their housing values depreciate because the 20 something next door knows nothing about maintaining a lawn.
Whats worse about this whole housing market situation in Las Vegas is that roughly 35% of offers on home purchases were cash. Not Credit, not a loan. Cold hard cash. And they still were outbid. So you get these cash in hand offers coming in. It's really hard for a first time home buyer, or any home buyer for that fact, to buy a home. Not their dream home. That was bought many years ago by an even wealthier individual that has had perfect credit since 1982. We're talking about a house that is just big enough and still needs some TLC to bring it up to code.
So if, you're looking to buy a home, this year, get on it. Save your pennies, and be ready for some mean girls kind of trickery to take place.