Hello. Welcome to Todd Miller TV. An update from March of 2013 here in the Las Vegas real estate market. I do this every month and I pull the same numbers every month and the numbers haven’t changed. So if you want to see the numbers, you can look at the 2013 or January or February or December of last year.
But in general what I want to talk about today is the trend and what it means. OK. So here’s the trend. The trend is that home prices are starting to go up and they have been for most of last year. Well what’s really interesting that we’re seeing is the appraisals are not coming in, meaning that people go under contract on the price. The appraisal is coming in less and specifically what that means to a person is that it’s still a cash type market, meaning if you have cash, you don’t care about an appraisal or you’re going to get one anyway and then whatever.
It’s really only if you’re getting a loan because you’re trying to leverage it and then it becomes an issue but here’s what’s really interesting. We’re seeing most of the time the buyer comes in with extra cash and we’re seeing most of the time the sellers not agreeing to reduce to appraised value. So say they agree to a price of here. Appraisal comes in here.
They’re either coming all the way up or they’re meeting in the middle but they’re almost never going, “OK, we will just sell it for appraised value unless it’s very close,” and the seller believes he’s getting a very good deal.
So what does that mean for you? This is what it means. It means if you’re going to buy in this market, having three and a half percent for your FHA down payment is probably not enough. You probably plan on more money. Now this is what you have to get out of your head, that you’ve overpaid for the house or you’re having to just throw extra money at it.
The price is the price. Just because a bank won’t loan you that money doesn’t mean you’re paying more for the house. That’s the thing people can’t get over. They view that appraisal as the government stamp of value and it’s not. It’s just an opinion from some appraiser who’s working independently and some bank hired him. Some lender hired him.
So just keep that in mind, that if you want to buy and you want to be competitive, that that is the strategy and that that is something that your agent is going to have to negotiate, something that we negotiate almost everyday after we get under contract and the way you’re going to win is by having the cash.
So that if it doesn’t exactly meet the appraisal but you’re still trying to leverage yourself, that you’re using as little of your own cash as possible.
The good news about that is that your loan amount is less. So instead of getting a loan for 97,000, your loan is only maybe 90,000 or whatever. So you’re paying down the loan faster. You’re going to pay it off sooner and it’s going to be great. So there’s always a silver lining. Anyway, I thought I would share that with you. That’s my market update for March 2013 in Las Vegas. Have a great day.
Las Vegas Real Estate Market Update