When Will Home Prices Finally Ease?
The dream of homeownership remains a cornerstone of financial security, but for many, rising home prices have put that dream out of reach. The question on many people’s minds is: when will home prices finally start to ease up? While it’s tempting to hope for a sudden crash in prices, experts suggest that’s unlikely. Instead, any meaningful reduction in prices will require a combination of key economic and market factors aligning over time. The Core of the Issue: Supply vs. DemandThe housing market is fundamentally shaped by the forces of supply and demand. For prices to come down, the number of homes available for sale needs to meet or exceed the number of buyers looking to purchase. Unfortunately, the United States is facing a housing shortage of historic proportions. Estimates suggest the country is several million homes short of what’s needed to balance the market. This imbalance keeps competition fierce among buyers, driving prices up even when other economic conditions might suggest otherwise. How Did We Get Here?The roots of today’s housing shortage go back more than a decade. After the 2008 housing crisis, homebuilders pulled back significantly on new construction. The crisis not only reduced demand temporarily but also caused widespread caution in the construction industry. As a result, the number of new homes built each year lagged far behind the pace of household formation. Even as the economy recovered, construction remained sluggish. Rising costs for labor, materials, and land made it more expensive for builders to develop new homes, particularly in the affordable housing segment. By the time builders started ramping up production in recent years, the gap between supply and demand was already enormous. What Needs to Happen for Prices to Decline?Bringing home prices down isn’t an overnight process—it requires addressing the core factors driving the imbalance: Increasing Housing SupplyFor prices to stabilize or decline, more homes need to be available for purchase. This can happen through new construction, existing homeowners listing their properties, or a combination of both. However, building more homes is a slow and complex process. Builders are still catching up from years of underproduction, and challenges like zoning restrictions, high construction costs, and labor shortages continue to slow progress. Easing Buyer DemandIf fewer people are actively looking to buy, competition for homes will decrease, and prices will stabilize. Rising mortgage rates are one factor that could temper demand, as higher rates make monthly payments less affordable for buyers. Additionally, economic conditions, such as slower wage growth or an increase in unemployment, could reduce the number of active buyers in the market. Government InterventionPolicy changes could play a significant role in addressing the housing crisis. For example, incentives for affordable housing development, relaxed zoning laws to allow for higher-density housing, and tax breaks for builders focused on entry-level homes could all help boost supply. Why Prices Aren’t Likely to CrashWhile the idea of a housing market crash might seem appealing to buyers waiting for lower prices, the current market conditions make this scenario unlikely. Crashes typically occur when there’s an oversupply of homes relative to demand, as was the case during the 2008 crisis. Today, the opposite is true—demand far outstrips supply, which serves as a buffer against steep price declines. What Does the Future Hold?Most experts agree that while home prices may not drop dramatically, the pace of price increases is likely to slow over the coming years. Some markets with higher inventory levels or lower demand may see slight price declines, but this won’t be the norm nationwide. Instead, price growth is expected to become more modest, providing some relief for buyers. Local Market VariationsIt’s important to remember that real estate markets are highly localized. What happens nationally may not reflect the conditions in your area. For example, markets with significant new construction or a slowing economy may see more noticeable price adjustments. In contrast, areas with strong job growth and limited housing inventory will likely continue to see rising prices. The Bottom LineEasing home prices requires addressing the supply-demand imbalance that’s been years in the making. This will take time, coordinated efforts, and changes in both market behavior and public policy. While prices may not crash, buyers can expect slower growth rates and more opportunities to enter the market as conditions gradually improve. To understand what’s happening in your specific market, it’s crucial to work with a local real estate expert. They can provide insights into inventory levels, demand trends, and opportunities that fit your budget and goals. Start Your Home Search Here
Discover the Best Neighborhoods to Invest in Las Vegas Real Estate – 2025
A stunning aerial view of the Las Vegas Valley, highlighting the city’s unique blend of urban and natural landscapes Las Vegas isn’t just the entertainment capital of the world; it’s also one of the most dynamic real estate markets in the country. With its growing population, strong economy, and vibrant culture, the city offers exceptional opportunities for property investors. Whether you’re seeking rental income, long-term appreciation, or the perfect place to grow your portfolio, Las Vegas has it all. In this blog, we’ll explore the top neighborhoods offering the best opportunities for investors in 2024 and provide tips to help you make the most of your real estate journey. Why Invest in Las Vegas Real Estate? The Perfect Market for Growth and Returns Las Vegas remains a top destination for investors for several key reasons: Booming Population: With thousands of new residents relocating annually, the demand for housing continues to rise.High Rental Demand: As a tourism hub, Las Vegas attracts temporary workers and newcomers seeking rental properties, making it ideal for investors.Tax-Friendly Policies: Nevada’s lack of state income tax adds to the appeal, boosting the profitability of your investment. The numbers speak for themselves. In 2024, median home prices have shown consistent growth, and rental vacancy rates remain below the national average, signaling strong returns for those entering the market. Top Neighborhoods to Watch 1. Southwest Las Vegas The Southwest region is booming, thanks to ongoing developments and proximity to the Las Vegas Strip. This area offers a blend of new-build homes, modern condos, and upscale townhomes, attracting families and professionals alike. With increasing infrastructure, including new schools and shopping centers, property values are steadily appreciating.Pro Tip: Look for properties near major developments, such as the Raiders Practice Facility, to capitalize on future growth. 2. Summerlin Known for its master-planned communities and high-end amenities, Summerlin is a premier choice for luxury investment. Properties in this area often come with top-tier schools, world-class shopping, and an active lifestyle centered around parks and trails. While prices are higher, the steady appreciation and affluent tenant pool make Summerlin a smart long-term investment. 3. Henderson Henderson offers a suburban feel with plenty of family-friendly amenities, lower crime rates, and proximity to outdoor attractions like Lake Las Vegas. Green Valley Ranch, in particular, stands out for its blend of single-family homes and high demand from families and retirees. Investors can find excellent opportunities for rental properties or long-term holds in this growing community. 4. Downtown Las Vegas Downtown Las Vegas is experiencing a renaissance, with urban redevelopment and mixed-use projects transforming the area. Affordable condos and short-term rental properties thrive here, making it a hot spot for investors seeking high yields. However, it’s important to assess ongoing development risks and choose properties in revitalized sections. 5. North Las Vegas If affordability and growth potential are your priorities, North Las Vegas is worth considering. With lower entry price points and high rental demand, this area appeals to first-time investors and those looking to diversify. Infrastructure improvements and city initiatives are driving its upward trajectory, making it a neighborhood to watch closely. Tips for Choosing the Right Neighborhood When deciding where to invest, keep these factors in mind: Define Your Goals: Are you aiming for rental income, quick flips, or long-term appreciation? Your strategy should align with the neighborhood.Study Amenities: Look for areas with desirable features like schools, parks, and shopping centers to attract tenants and boost property value.Research Market Trends: Analyze past price trends, growth potential, and rental yields to ensure a profitable investment.Work with Experts: A local real estate professional can help you identify opportunities and navigate the competitive Las Vegas market. Take the Next Step in Your Real Estate Journey Las Vegas offers a wealth of opportunities for savvy investors, from the luxury enclaves of Summerlin to the revitalized streets of Downtown. Whether you’re just starting out or looking to expand your portfolio, the key to success lies in choosing the right neighborhood. Are you ready to take the leap? Let’s find the perfect property to achieve your investment goals. Contact us today to learn more! Contact Us
Why Today’s Housing Inventory Proves the Market Isn’t Headed for a Crash
Whether or not you owned a home in 2008, you likely remember the housing crash that took place back then. And news about an economic slowdown happening today may bring all those concerns back to the surface. While those feelings are understandable, data can help reassure you the situation today is nothing like it was in 2008. One of the key reasons why the market won’t crash this time is the current undersupply of inventory. Housing supply comes from three key places: Current homeowners putting their homes up for saleNewly built homes coming onto the marketDistressed properties (short sales or foreclosures) For the market to crash, you’d have to make a case for an oversupply of inventory headed to the market, and the numbers just don’t support that. So, here’s a deeper look at where inventory is coming from today to help prove why the housing market isn’t headed for a crash. Current Homeowners Putting Their Homes Up for Sale Even though housing supply is increasing this year, there’s still a limited number of existing homes available. The graph below helps illustrate this point. Based on the latest weekly data, inventory is up 27.8% compared to the same week last year (shown in blue). But compared to the same week in 2019 (shown in the larger red bar), it’s still down by 42.6%. So, what does this mean? Inventory is still historically low. There simply aren’t enough homes on the market to cause prices to crash. There would need to be a flood of people getting ready to sell their houses in order to tip the scales toward a buyers’ market. And that level of activity simply isn’t there. Newly Built Homes Coming onto the Market There’s also a lot of talk about what’s happening with newly built homes today, and that may make you wonder if we’re overbuilding. But home builders are actually slowing down their production right now. Ali Wolf, Chief Economist at Zonda, notes: “It has become a very competitive market for builders where they are trying to offload any standing inventory.” To avoid repeating the overbuilding that happened leading up to the housing crisis, builders are reacting to higher mortgage rates and softening buyer demand by slowing down their work. It’s a sign they’re being intentional about not overbuilding homes like they did during the bubble. And according to the latest data from the U.S. Census, at today’s current pace, we’re headed to build a seasonally adjusted annual rate of about 1.4 million homes this year. While this will add more inventory to the market, it’s not on pace to create an oversupply because builders today are more cautious than the last time when they built more homes than the market could absorb. Distressed Properties (Short Sales or Foreclosures) The last place inventory can come from is distressed properties, including short sales and foreclosures. Back in the housing crisis, there was a flood of foreclosures due to lending standards that allowed many people to secure a home loan they couldn’t truly afford. Today, lending standards are much tighter, resulting in more qualified buyers and far fewer foreclosures. The graph below uses data from ATTOM Data Solutions on properties with foreclosure filings to help paint the picture of how things have changed since the crash: This graph shows how in the time around the housing crash there were over one million foreclosure filings per year. As lending standards tightened since then, the activity started to decline. And in 2020 and 2021, the forbearance program was a further aid to help prevent a repeat of the wave of foreclosures we saw back around 2008. That program was a game changer, giving homeowners options for things like loan deferrals and modifications they didn’t have before. And data on the success of that program shows four out of every five homeowners coming out of forbearance are either paid in full or have worked out a repayment plan to avoid foreclosure. These are a few of the biggest reasons there won’t be a wave of foreclosures coming to the market. Bottom Line Although housing supply is growing this year, the market certainly isn’t anywhere near the inventory levels that would cause prices to drop significantly. That’s why inventory tells us the housing market won’t crash. contact us
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