This is my prediction of what the Las Vegas and Summerlin Real Estate markets are going to go through over the next 12 to 24 months that make this the absolute best time to buy an owner occupied residence. The real estate market will strengthen, demand will increase, inventory will be reduced and prices will rise. These changes will happen quickly and may last for only about one year before new challenges, such as rising interest rates, will impact our real estate market. This may not sound all that enlightening but allow me to explain how I see this transformation progressing, how long it will last and how we can all take advantage of the window of opportunity that will exist for only a short period of time.
Now is the best time for an owner occupied residential home buyer to purchase a home. The next two months are historically the slowest months of the year for residential real estate transactions. The inventory (or selection of available homes) is high, there is very little traffic of people viewing homes, people that do sell at this time of year are serious about selling their homes, mortgage interest rates are low and bank owned properties are selling faster.
Beyond this seasonal short term scenario we will begin to see another period of change that will last for approximately 9-18 months. The first sign of this change will come from the perception of the owner occupied buyer(s) that are looking for single family homes to live in for the next 3 years or more. They will understand that even if they purchase now and the real estate market (or value of their home) goes down, it will be a short time frame and the gain they will see over the next three years or more of owning their home will more than offset the short term slip in value. They will begin to understand that the media is grouping many types of buyers together and portraying a slightly twisted version of the state of the Las Vegas and Summerlin Real Estate markets. It is true, this is not the best time for an investor to be buying (for various reasons) but it is a good time for the owner occupied buyer(s).
There is and has been a pent up demand for owner occupied residential real estate in Las Vegas. The primarily reason is because we have a great economy so people are still moving to Las Vegas in the same great numbers but are hesitant to purchase homes because of what they hear and read so they are waiting. Once they come to their own opinion of what to believe and that it may not necessarily be in their best interest to wait or rent, that the owner occupied residential real estate market is not as negative as they have been lead to believe and they realize that the Las Vegas and Summerlin real estate markets are getting better, they will make their move to purchase a home. Once they begin to purchase homes, the number of people that will buy homes will be in much greater numbers than those buying homes in a more normalized market and the inventory will be reduced in a very dramatic fashion over a very short period of time. As the inventory of available homes is reduced then prices will begin to stabilize then rise. Once this happens all the current homeowners, who are serious about selling and have wanted to and been patiently waiting to purchase homes, will slowly come into the market over a period of time as it changes, further strengthening our residential real estate market.
Add to this that the Federal Reserve Board has recently been reducing interest rates, that indirectly affect the mortgage market, and may even continue to do so over the short term. They are concerned, in the short run, about the national real estate market as well as the mortgage and/or financial markets. It is my opinion that the Federal Reserve Board is really more concerned about inflation. The economy is heating up and as it continues to heat up there will be more pressure on them to raise interest rates to avoid inflationary fears especially nearing a presidential election. This tells me that the interest rates we have right now could be the best we are going to see for some time.
In the past Las Vegas has traditionally been less affected by the national economic environment than other states. We tend to be delayed in going into slower economic times and faster in coming out of them. Because of the growth of our economy, I see Las Vegas rebounding faster from the slow housing market than the remainder of the country, possibly as early as the beginning of 2008. As the remainder of the country rebounds near the end of 2008, the national economy will begin to heat up at approximately the same time as the presidential election. The Federal Reserve Board will do the best they can to avoid any inflationary fears. This will cause the Federal Reserve Board to look closely at raising interest rates to slow the economy just as the national real estate market is rebounding. This could result in an increase in mortgage interest rates.
With this being said, Las Vegas will have a period of about 6-9 months of good residential home buying opportunities with good mortgage interest rates before the national economy sees our same real estate turn. Las Vegas will see home inventories come down, residential home sales increase and home prices start to rise. About the same time the national real estate market is starting to recover, and the Las Vegas real estate market begins heating up mortgage interest rates could begin to rise causing challenges for owner occupied buyers.
For these reasons I see this time as the best time, within the foreseeable future, for a home owner to purchase residential real estate in Las Vegas. For an owner occupied buyer to wait to purchase a home in this type of environment, that could and likely will change very quickly, is like trying to time the bottom of the stock market. It is very difficult if not impossible to accomplish.
Let’s see what happens.
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Posted by Joe Laliberte 
Las Vegas & Summerlin Real Estate 