12/09/2024
Dont wait to buy its likely to be more expensive and less options if the rates even go down.
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Many people fail to conceptualize the difference between nominal value and real value when it comes to home values.
We've experienced a 21.2% rate of cumulative inflation since 2020.
Your purchasing power and the value of your dollar have dropped by 21.2% in four years.
If you purchased a home in 2020 for $500,000 and your nominal / market value today is $606,000, your *REAL* value gain is....$0.
If you bought a home in 2014 for $300,000, if that home JUST paced inflation, in 2044 it'd be worth $651,376.
Home values historically have risen at around 5.5% YoY over the last 30 years, outpacing prior historical inflation by 3-3.5%
If that pace maintains and you purchased a home in 2014 for $300,000, then by 2054, yes, that home would be worth $1,495,185.
That said, I don't know that home values will outpace inflation forever. That isn't sustainable. We're due an adjustment and correction. But I'm still struggling to see that happen any time in the near future. It could, but it's tough to see how here in Las Vegas. I'd personally welcome a 15-20% decline in values, as affordability is at all-time lows. More participation in the marketplace is better for everyone on the macro level. But outside of a tremendous amount of oversupply and deflationary event, it's hard to see how that actually happens here.
Owning real estate has been a tremendous hedge against inflation in the past, but interestingly enough in the last few quarters here, prices are barely pacing inflation, thus in real value terms, they are declining, though nominal values still appear to be increasing on their face.
Las Vegas is seeing an influx of between 1,200-1,500 residents per WEEK moving to our city, and we just do not have the supply to keep up with demand right now. There's hope that these 50,000 acres of BLM land the governor has petitioned to be released for SFR and mixed-use development can help add a lot of needed inventory, and that could soften prices a bit 5-6 years down the road, but at the end of the day, we have an undersupply of homes and an over demand of people wanting to own homes in Las Vegas.
The real truth is, no one has a crystal ball as to what happens 10, 20, or 30 years from now or more importantly...even just 6-12 months from now, and if they claim they do, you should find another agent.