Lake Tahoe Housing Market

The Nevada real estate market is experiencing a major shift. The median sale price decreased by 9.06% in April 2023 year-on-year, and the number of homes sold dropped by 32.4%. New buyers are starting to enter the market as mortgage rates are stabilizing, currently at 6.79%.

While the housing market in Nevada is showing signs of warming up, it is still threatened by a possible rise in interest rates and a housing market recession.

Will the Housing Market Crash in Nevada?

Several economists believe the housing market will slow down in 2023, but not crash. As the mortgage rates are stabilizing now after the recent bank crisis, more buyers feel confident to enter the housing market.

Let’s look at why most experts believe that the housing market in Nevada is not going to crash.

5 Reasons Why the Housing Market is Unlikely to Crash

1. Low Months of Supply: As per May 2023 data, only 2.6 months’ supply is available. This scarcity of inventory explains why many buyers need to bid over the listing price. According to the law of supply-demand, it is predicted that home prices will remain stable for now.
2. Low Newly Constructed Housing Supply: The supply of newly constructed houses has yet to return to pre-2007 levels. Also, there’s no way for homebuyers to buy land, get regulatory approval, and increase the supply quickly.
3. New Buyers Entering the Market: There’s a strong demand for homes across various demographics. Millennials and Hispanics are in their prime buying years. As a result, there’s still a limited amount of inventory available.
4. Strict Lending Standards: There were several cases of liar loans in 2007 where anyone could get a mortgage without a credit check. Today, mortgage lenders in Nevada place high standards on borrowers, and most home buyers are required to have an excellent credit score.
5. Fewer Foreclosures: A majority of homeowners own significant equity in their homes. The personal balance sheets of homeowners are much stronger today than they were 15 years ago. As a result, the threat of rising foreclosures in Nevada is low.

Is 2023 a Buyer’s Market or a Seller’s Market?

2023 is unusual compared to previous housing market trends. That’s why, it’s difficult to gauge whether it is a seller’s or a buyer’s market.

Due to relatively high mortgage rates, buyers entering the market are few. Likewise, low inventory and a reduced number of listings indicate sellers’ reluctance to sell.

In the wake of Silicon Valley Bank’s fall, daily average mortgage rates fell from 7% to 6.5%. Likewise, home prices across the nation fell by 1.8% over the span of a weekend, which saw a sudden spike of 7% in mortgage applications.

After Fed’s recent announcement, the average weekly mortgage rates increased from 6.57% to 6.79%. Further, mortgage purchase applications grew by 17% in February-March.

Should I Sell My NV Home Now or Wait?

10% of homeowners believe that now is a good time to sell a home. Home prices are still at record highs, but some experts predict that many markets will decline by 5% to 10%.

If you are in a market where home prices are still high, this might be a good time to sell a house in Nevada. You can sell your house in the following circumstances:

• Before the Mortgage Rates Touch Record Highs: Mortgage rates may touch 7.8% in the coming year as the Fed tries to control inflation. Compared to 1971, the present rate could reach an average of 8% for a 30-year fixed mortgage. As interest rates are still low, many prospective buyers may enter the market now rather than later.
• You Need to Upsize or Downsize: Significant changes in family dynamics may require you to sell your property and move to a different one.
• You Need to Relocate: If you’ve got a new job or have decided to retire, or relocate to a new state, there is no way around selling. The best time to sell a house is when you’re ready to move.

Should I Buy a Home Now or Wait?

According to statistics, 77% of people think that now is a bad time to buy a house in Nevada. This is mainly because of the relatively high mortgage rates in the past few weeks, which allow only a few buyers with strong financial conditions to enter the market.

If you’re planning to buy now, plan your finances well and make sure you have 5 to 6 months of savings after you put your down payment.