A friend of mine asked me "When do you think the right time to buy a home in Las Vegas would be?"I have been a real estate broker in Las Vegas for 26 years now and if I had a dollar for everytime I have been asked that question, I would be happily retired, sitting on a beach on my own island somewhere in the Pacific counting coconuts and watching the tide roll in and out while sipping on one of those goofy drinks with the mini umbrellas. "No really", he says, "you must know when the perfect time will be?" "Are prices going to drop more, are the interest rates going to drop more?" Should I wait until the government gives me the down payment and offers to make my monthly payments for the next five years, oh and maybe if I time it perfectly, I can get a home the day the market bottoms out and lock in my interest rate an hour before the rates start to climb again...Riiight.
Save yourself some major stress and anxiety and buy a home when you WANT to buy a home. That is, if you are financially ready, and have a legitimate reason to either move or own an investment home.
Too many would-be buyers get caught up in the "Time the market" syndrome. About ten years ago I came to the conclusion that I was not a clairvoyant and didn't know one either so I came up with a list of the signs that will usually tell you when the time is right to buy-NOT to be confused with timing the market, just paying attention to the proper indicators:
1. Home prices have dropped significantly over the past 12-36 months. Do the research YOURSELF.Just reading a few articles on the Internet does not qualify as research. If you are interested in a specific area, say the Summerlin or Green Valley area, ask a very qualified Realtor to provide you with the most recent data that would indicate the price adjustments over the last 12-24 months. Talk to qualified active appraisers about their opinion of those areas. Make sure the agent and appraiser you talk to has been very active in the market for at least the past few years, preferably more.
2. The inventory of homes available indicate that it is a buyers market. That would be at least a minimum of a 4-5 month supply. Again, your real estate professional should be able to tell you how many months supply of homes there is in the area you are looking as well as the overall market. If not, there are a few good sites that I will forward to you that are accurate and informative.
3. The interest rates to finance a home are below 7%. Yes, I said 7%! Currently they are in the 4.5% range, the lowest I have ever seen in my 26 years and the lowest overall in the last 40 years!
We have become so spoiled by the low interest rates over the past ten years (almost all below 7%) that we have come to expect the rates to stay there. And if they don't, it sends a shock wave to the market and buyers start waiting again. If the rates are below 7% and the average home price is under $170,000, that is the tipping point of where it is cheaper to buy vs. rent.
4. The tax incentives are still in place. Yes, Uncle Sam has for decades and still to this day, and hopefully for future decades, offers the incentive of the interest deduction when you purchase a home with the banks money, not to mention the writes-offs for improvements, and other expenses. Investors are entitled to excellent incentives as well. Consult your tax advisor for all the details and you should find that it is far more benificial to own than to rent when it comes to paying taxes.
Of course, there are more signs to watch such as the improvements and growth in the area, demand for the area and overall economic indicaters, but those are the most recognizable signs to watch.
And if I am properly informed, I believe all four of the above signs are now quite noticable in Las Vegas.
For my friend that asked me that question, I hope this helps.