Crazy Market under $400k

 Buyers trying to find a house under $400k are going to meet a lot of other buyers doing the same thing. Down around $300k it is a zoo with multiple offers over asking the norm rather than the exception. With the Clark County Median home price right near $400k that is the new "sub-median" line.

Although COVID 19 has claimed many jobs the real estate market continues to be hot. Lenders are looking closely at buyers but when things align the loan rates are very low and that mean more buyers can afford a house despite the rising prices. This puts pressure on that entry level market.

But for the first time in a fair while, new homes are available in the sub-median price range. A brand new home for under $400k? Yes, not a lot of options, but they are out there. Before you run off to that shiny new subdivision be mindful that new home sin the sub median price range will be attached housing or at best a very small house on a tiny lot. The resale market can still deliver a small house on a big lot, and for many who seek some stretching room, that is the perfect ticket.

Did you ever think you'd see the day that a 800 SF 'Kaiser Cottage' would be fetching $300k? Well that day is here some of then are and they are getting snatched right up at those lofty prices. 2.5% interest rates on 30 year fixed loans will make a market out of thin air!

Home Owners not Selling, Buyers want to Buy!

This whole COVID 19 debacle has left the real estate market surprisingly hot. It's not that there are lots of sales, because there isn't. It is simply that the typical number of summertime sellers didn't materialize this year. Many homeowners are not selling right now whether due to Corona fear or something else altogether.

Meanwhile the downturn in jobs we see as a result of the COVID pandemic has slowed the demand a little, but the supply took a bigger hit. Last summer things were cooling off leaning towards a neutral market. This summer sellers are once again in the driver's seat in top down price ranges from 150% of median to the sub-median market.

This tight resale inventory has the local builders in solid spot as many would be resale buyers are looking at new construction to meet the demand. The local builders have their own issues related to COVID and other market forces like a supply of sub contractors and potential work shut downs every time the case load pops up and the Governor gets the itch.

What a strange and wild year 2020 has been. But at least the local real estate market can benefit from a very respectable demand against a tight supply. The mortgage rates are are helping the fuel the demand as well with buyers seeing rates the likes of which have never been seen before. 

Buyer's Just Got a Big Fat Raise... sort of.

Throughout most of this crazy year we call 2020 mortgage rates have been very low, not the lowest ever, but very, very low. Well now they are the LOWEST EVER. For buyers you just got an effective raise with regards to your home buying power. I have mentioned this in previous posts over the years but a 1/2 point difference in mortgage interest rate can add up to a tremendous amount of buying power.

A $300k mortgage at 3.5% will have a principle and interest payment of $1347 per month. That same loan at 3.0% has a PI payment of just $1265. A buyer is qualified based mostly on the amount of the payment relative to income and other payments. At 3.0% interest that $1347 payment gets a loan of $319,500. That is nearly $20,000 MORE buying power. It's like you just got a big fat raise from your boss.

I have many buyers that are looking about, and now is the time to pull the trigger on these crazy low rates. I have seen well qualified borrowers getting rates on 30 year fixed mortgages in the middle twos!

Buyer's this is your moment. Go out and lock down that dream house with a historic low mortgage.