Las Vegas Community News and Blog

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

Oct. 7, 2019

62% of Buyers Are Wrong About Down Payment Needs

62% of Buyers Are Wrong About Down Payment Needs

62% of Buyers Are Wrong About Down Payment Needs | MyKCM

According to the ‘2019 Home Buyer Report conducted by Nerdwallet, many first-time buyers still believe they need a 20% down payment to buy a home in today’s market:

“More than 6 in 10 (62%) Americans believe you must put at least 20% down in order to purchase a home.”

When potential homebuyers think they need a 20% down payment to enter the market, they also tend to think they’ll have to wait several years (in some markets) to come up with the necessary funds to buy their dream homes. The report continues to say,

“The truth: 32% of current U.S. homeowners put 5% or less down on their home, according to census data.” (as shown below):

62% of Buyers Are Wrong About Down Payment Needs | MyKCMThe lack of knowledge about the home-buying process is unfortunately keeping many motivated buyers on the sidelines.

Bottom Line

Don’t let a lack of understanding keep you and your family out of the housing market. Let’s get together to discuss your options today.

Posted in Trends
Sept. 24, 2019

Home Prices In Every Range

Home Prices Increase in Every Price Range

Home Prices Increase in Every Price Range | MyKCM

CoreLogic’s Home Price Index (HPI) Report revealed,

National home prices increased 3.6% year over year in July 2019 and are forecast to increase 5.4% from July 2019 to July 2020.

They also analyzed four individual home-price tiers, showing the increase in each.

Here’s the breakdown:

Home Prices Increase in Every Price Range | MyKCM To clarify the methodology, CoreLogic explains,

“The four price tiers are based on the median sale price and are as follows: homes priced at 75% or less of the median (low price), homes priced between 75% and 100% of the median (low-to-middle price), homes priced between 100% and 125% of the median (middle-to-moderate price) and homes priced greater than 125% of the median (high price).”

What does this mean if you’re selling?

Price appreciation can differ depending on your price range. If you’re a homeowner thinking of selling, let’s get together to find out how much your home is increasing in value, so you can price it competitively for today’s market.

Posted in Trends
Aug. 30, 2019

iBuyers: What Is the “Cost of Convenience” When Selling Your Home?

iBuyers: What Is the “Cost of Convenience” When Selling Your Home?

When thinking about selling their house, homeowners have many options. A relatively new option is using an “iBuyer.” What is an iBuyer?

According to Jovio, the definition is:

“A company or investor that uses Automated Valuation Models (AVMs) to make instant offers on homes. It allows sellers to close on a property quickly. Once sold, the company then turns around and resells the home for a profit.”

Today, there are many iBuyer companies such as OfferPad, Zillow Offers, Knock, Opendoor, and Perch. Even some more traditional companies offer the same or similar services (ex. Keller Williams, Redfin, Realogy). Ivy Zelman reported in her ‘Z’ Report that some traditional brokers are partnering with some of the larger iBuyers too:

“Keller Williams announced a partnership with Offerpad, aligning the largest franchise-based brokerage brand in the U.S. with the five-year-old iBuyer. The move follows Realogy’s partnership with Home Partners of America last year as an established brokerage player more directly providing an iBuyer alternative…

Likewise, in early July, Redfin and Opendoor announced a partnership, starting in Phoenix and Atlanta – aligning interests of the 13-year old, tech-enabled and value-focused brokerage with the largest and longest-standing iBuyer. Outside of these larger scale alliances, Zillow’s strategy has been to work with local brokerages as partners on a market-by-market basis.”

Does it make sense to sell your home to an iBuyer?

It depends. Collateral Analytics recently released a study which revealed the advantages and disadvantages of using an iBuyer. According to the study, if the homeowner is looking for the convenience of a quick sale with less uncertainty, using an iBuyer may make sense.

“iBuyers offer quicker closings for sellers who would like to avoid the uncertainty of knowing when and if their home will sell. For motivated sellers who want a predictable sale date and need to move, perhaps a long distance from the current location, there is no question that iBuyers have provided a welcome alternative to traditional brokerage.”

The study, however, also showed there is a cost for that convenience. Collateral Analytics explained:

“Traditional brokers fees generally range from 5% to 7% of the sales price…In addition to this cost, buyers typically pay some closing costs including lender related charges in the range of 1% to 3%.”

In contrast:

“iBuyers charge sellers a ‘convenience fee’ of 6% to 9.5%, some also charge the seller for fees typically paid by buyers at closing adding another 1% or more. Most iBuyers will inspect the home, assess a generous home repair allowance and negotiate a (an additional) credit to handle such repairs…Overall the total direct costs, ignoring repair credits, will run 7% to 10% for an iBuyer, versus the typical 5% to 9% combined seller and buyer costs with a traditional broker. Yet, that is not the end of the story or comparison.”

 

The study went on to explain how iBuyers need to charge even more because they have additional expenses beyond that of the traditional broker. They include:

  1. Carrying costs involving significant amounts of capital – The iBuyer must pay the expenses of the house between the time they purchase it and the time they sell it to a new buyer.
  2. Safeguarding the home risks – A home with an iBuyer ‘For Sale Sign’ alerts anyone passing that the house is vacant. The study suggests that these homes could become targets for vagrants and criminals.
  3. Adverse selection risks – The study explains that since iBuyers use computer models to determine their offer, they may be unaware of certain challenges in the neighborhood that could adversely impact the value.
  4. Potential home price declines – As the survey states:

“A downturn in home prices, not forecast by the iBuyer market analysts could be devastating as they ramp up their business platforms, particularly if the cost of capital increases. At the same time, downturns are precisely when the most sellers would want this option.”

Bottom Line

After taking a thorough look at the iBuyer platform, the study concludes that using an iBuyer is more expensive for the homeowner than the traditional brokerage model, but for some sellers, it may still make sense:

“These preliminary empirical results suggest that sellers are paying not just the difference in fees of 2% to 5% more than with traditional agencies, and a generous repair allowance, but another 3% to 5% or more to compensate the iBuyer for liquidity risks and carrying costs. In all, the typical cost to a seller appears to be in the range of 13% to 15% depending on the iBuyer vendor. For some sellers, needing to move or requiring quick extraction of equity, this is certainly worthwhile, but what percentage of the market will want this service remains to be seen.”

 

 

 

 

 

 

 

 

 

Posted in Selling
Aug. 26, 2019

Experts Predict a Strong Housing Market for the Rest of 2019


We’re in the back half of the year, and with a decline in interest rates as well as home price and wage appreciation, many are wondering what the predictions are for the remainder of 2019.

 

Here’s what some of the experts have to say:

Ralph McLaughlin, Deputy Chief Economist for CoreLogic

 

“We see the cooldown flattening or even reversing course in the coming months and expect the housing market to continue coming into balance. In the meantime, buyers are likely claiming some ground from what has been seller’s territory over the past few years. If mortgage rates stay low, wages continue to grow, and inventory picks up, we can expect the U.S. housing market to further stabilize throughout the remainder of the year.”

 

Lawrence Yun, Chief Economist at NAR

 

“We expect the second half of year will be notably better than the first half in terms of home sales, mainly because of lower mortgage rates.”

 

Freddie Mac

 

“The drop in mortgage rates continues to stimulate the real estate market and the economy. Home purchase demand is up five percent from a year ago and has noticeably strengthened since the early summer months…The benefit of lower mortgage rates is not only shoring up home sales, but also providing support to homeowner balance sheets via higher monthly cash flow and steadily rising home equity.”

 

Bottom Line

The housing market will be strong for the rest of 2019. If you’d like to know more about our specific market, let’s get together to discuss what’s happening in our area.

Posted in Market Updates, Trends
Aug. 13, 2019

American Confidence in Housing at an All-Time High

Fannie Mae just released the July edition of their Home Purchase Sentiment Index (HPSI). The HPSI takes information regarding consumers’ confidence in the real estate market from Fannie Mae’s National Housing Survey and condenses it into a single number. Therefore, the HPSI reflects consumers’ current views and forward-looking expectations of housing market conditions.

 

Great News! The index reached its highest level since Fannie Mae began their survey. Breaking it down, the report revealed:

 

  • The share of Americans who say it is a good time to buy a home increased from the same time last year.
  • The share of those who say it is a good time to sell a home increased from the same time last year.
  • The share of Americans who say they are not concerned about losing their job over the next 12 months increased dramatically (16 percentage points) from the same time last year.
  • The share of Americans who say mortgage rates will go down over the next 12 months increased dramatically (24 percentage points) from the same time last year.

The day after the index was released, Freddie Mac also announced the 30-year fixed-rate mortgage rate fell to its lowest level in three years.

 

Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae explained the uptick in the index:

 

“Consumer job confidence and favorable mortgage rate expectations lifted the HPSI to a new survey high in July, despite ongoing housing supply and affordability challenges. Consumers appear to have shaken off a winter slump in sentiment amid strong income gains. Therefore, sentiment is positioned to take advantage of any supply that comes to market, particularly in the affordable category.”

 

Bottom Line

Consumers are feeling good about the real estate market. Since Americans are not worried about their jobs, see mortgage rates near an all-time low, and believe it is a good time to buy, the housing market will remain strong for the rest of the year.

 

Posted in Market Updates
July 31, 2017

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Curious about local real estate? So are we! Every month we review trends in our real estate market and consider the number of homes on the market in each price tier, the amount of time particular homes have been listed for sale, specific neighborhood trends, the median price and square footage of each home sold and so much more. We’d love to invite you to do the same!

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You can sign up here to receive your own market report, delivered as often as you like! It contains current information on pending, active and just sold properties so you can see actual homes in your neighborhood. You can review your area on a larger scale, as well, by refining your search to include properties across the city or county. As you notice price and size trends, please contact us for clarification or to have any questions answered.

We can definitely fill you in on details that are not listed on the report and help you determine the best home for you. If you are wondering if now is the time to sell, please try out our INSTANT home value tool. You’ll get an estimate on the value of your property in today’s market. Either way, we hope to hear from you soon as you get to know our neighborhoods and local real estate market better.

Posted in Market Updates