Will the inflation of real estate continue to increase?

Question

I believe prices will continue to grow! More people are working from home stimulating companies gross income and cutting down cost.

Jacoby Atako · Answer

@Roi Ford

I truly doubt there will be any widespread crash in Vegas. Obviously you'd expect some sort of stabilization when people have to start getting caught up on the payments they haven't made, but prices have gone up so much they typically have enough equity to sell.  And CLEARLY there is extreme demand that doesn't seem to be fading with the mass migration from California.

I think for me I'm preparing to look for specific opportunities, but doubt they'll be on the MLS.

Eduardo Arias · Answer

@Forrest Faulconer thank you for your input, I see buyers with confidence and a economy recuperating from one the worst economic periods in recent years. Also, the average American family is probably rethinking what a comfortable living space is, therefore, the size of dwellings will definitely increase which will inevitably affect the cost of construction. But I could be wrong after all we are all learning with the blows.

Roi Ford · Answer

I personally think we are headed for a crash.  At least here in Las Vegas.  I see many of the same indicators that were in place back in 2008-2009 with a few exceptions.

The difference is that our industry (real estate) is not the cause of the crash to come, and economic conditions.  The his time around real estate is trailing what’s happening with the economy.  We have yet to experience the wave of foreclosures that are coming.

Another thing, when the last crash happened, inventory levels were very similar to what they are right now.  As of this past week, Las Vegas has about 2 weeks supply of homes on the market.  Putting us in a hyper sellers market.  This is completely unsustainable.  At some point we will crash, but....   it won’t be as dramatic as the crash in 2008.

Just my opinion.

Bill B. · Answer

why will here be any foreclosures? With prices up 10-20% everyone who bought before the pandemic should have equity  maybe even if they never made a payment  the only foreclosures I see are stubborn people who refuse to sell or make a payment  then what? Then they move in to a new home or a rental? I know people who moved right out of our their shortage in 2010 or 2011 not having made a payment in 3-4 years in to a new home purchase  you know, a fresh start, a way to help people  they ended up ahead 100 thousand or more

But, that’s the difference right? There was zero shortage of houses for sale before the crash. The inventory level was probably 10x higher? And if this crash will be only a small one compared to last time are  we talking 10%? Back to 2019-2020 levels. Or a massive 2nd worst in history 20% crash back to 2018-2019 prices?

Ps. If the “crash” doesn’t happen until next year, after pries have gone up another 10%, then the crash will be back to today’s prices. Prices have crashed more than 5% once in Las Vegas history so obviously it’s about to happen a second time. If the plan for a crash is to make people sell and leave the city to free up housing and lower prices, it’s a bad plan. Since more adults in Vegas were born in California than Nevada you also have to assume there will be zero crash in California or those people will flood here for 1/2 prices housing and zero state income tax. Along with the New Yorkers.

Maybe the last crash scarred the young people like the depression scarred our grandparents, but it’s the go to excuse for at least 15 years now. “Nobody” things prices are going to crash to 2015 levels. When prices drop 10 or 20% are any of these the “crash is coming” guys going to buy? The prices will still be higher than they coulda paid 5 years ago but maybe they’ll trick themselves and forget that? But I assume more likely they’ll be afraid prices are going to crash another 10% and wait until prices recover. And then start their the crash is coming mantra over again.

Eduardo Arias · Answer

@Forrest Faulconer hahahaha yesss 1000% agree. A townhome in a C minus neighborhood that I  was looking into only lasted 3 days on the market by the 4th day it was already under contract. I was baffled, and it was still $30K over priced. Also, the transitioning of people from major city into less populated areas is a big big factor in prices and demand. I love to see the changes in real estate it’s such an exiting industry.

Forrest Faulconer · Answer

Are more people working from home? Wish I still had that luxury, but I think the world is trying to get back to normal. We'll see. What's your correlation with inflated real estate prices? From what I see, very low inventory and low interest are inflating prices, but it all may be related.

Forrest Faulconer · Answer

It is exciting! Thanks for you post :)

Forrest Faulconer · Answer

Ya I'm definitely curious to see what the future holds, hard to compare the 08-09 crash to this because of that causal difference, but the low inventory, mortgage forbearance, and stimulus money pumping into the country is bound to lead to something.

Forrest Faulconer · Answer

Good theories, I think there is some data out there showing an influx of people moving out of densely populated into more spacious living situations, as you stated. Yet, inventory, or lack thereof, has to be the biggest factor driving demand. I got an email about a property that went active, and after three minutes it was pending. What the????

Forrest

Will the inflation of real estate continue to increase?

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