Internationals, Now is The Time!
© 2009
Eric Fernwood - All rights reserved
Congratulations!
Waiting a was an excellent move. Homes fell on average
(more about this later) of 30% in 2008. However, when
I talk to some of my Canadian and European clients,
they lament about how they should have bought when
their currency was stronger against the US dollar.
Some tell me that they think it is too late to buy.
Not so.
I have a different
view. I look at buying power instead of currency exchange
rates. For example, if you purchased an “average” single family home in Las Vegas a year ago, you would
have had to pay about $250,000USD for what you can
buy today for $170,000USD. Or, to put this in perspective
of buying power, if you bought that home in January
of 2008 when the Canadian dollar was at $.94USD,
you would have paid approximately $265,000CAN for
that property. Today, even with the exchange rate
at about $.8, you would pay $170,000USD/$.8CAN =
$209,500CAN. That is a savings of $56,000CAN!!! Below
are some comparisons.
 What about
the future of the Las Vegas market? Will prices continue
to fall? Should you wait? In my opinion, it depends
on the price of home and the area in which you want
to buy. I believe that if you are considering buying
a $400,000USD or higher priced home in the US, then
it will continue to decline in value and you might
be better off waiting. However, that is not the case
for homes priced less than $250,000USD. Why? I will
explain but it is not a short answer; reality
is rarely concise.
First, averages
are very misleading; no one buys an “average” home.
You buy a specific home in a specific subdivision in
a specific area. Averages for an entire city do not
apply to any specific property. For example, would
you be happy living in a climate with an average temperature
of 20C? Suppose I told you that the daily high was
200C and the nightly low was -160C. The average is
20C but I do not think you would like living in such
a climate; even Saskatoon in the winter would be a
LOT better. Averages are very misleading without additional
inforamtion.
So,
while I believe that most homes in Las Vegas
will likely decrease further (depending
on the area and the price range) homes priced
less than $250,000USD in good areas will decrease
less and in some areas, they are now selling
for about 102% of asking price. Why? Many first
time buyers and investors are entering the
market. In fact, the combination of first time
buyers and investors has pushed the sales volume of
homes to almost record highs. See the chart below.Even
in November, psychologically the worst
period of the crash, sales only dipped.
If you are
an investor, then this is the perfect time. Even with
all the homes going onto the market and a glut of low
priced apartments east of the strip, rents are rising
accross Las Vegas as shown below. And, as the economy
recovers, this trend will continue since realitively
few new properties are entering the market. So, with
record low prices and rising rental rates, this is
an investors dream.
Another factor to throw into the confusion: possible
actions by the US Federal government. There is a lot
of talk about lending policy changes that could dramatically
alter the housing market. If this occurs, and president
Obama was partially elected based on a commitment to
do just this, the market could rapidly change and your
chance of buying a very low priced property in the
US could be gone.
Bottom
line - now is the best time to buy a property
in Las Vegas! Call me today to discuss your real estate needs. You will be glad you did.
Eric Fernwood
702-358-8884
EricFernwood@Gmail.com
|
