Good morning dear readers and welcome back to kenbaxter.com! I am Ken Baxter of Las Vegas and today is Friday, January 30th, 2015. As you know, earlier this month we celebrated the triumphant achievements of legendary civil rights leader, Dr. Martin Luther King, Jr. A revolutionary and powerful force in the movement to overcome segregation and inequality among the citizens of America, Dr. King was also an eloquent speaker, giving us many insightful and motivational proclamations that still ring true nearly fifty years after his passing. One of his most inspirational quotes, and a personal favorite – “If you can’t fly then run, if you can’t run then walk, if you can’t walk then crawl, but whatever you do, you have to keep moving forward.” With this message of motivation, Dr. King tells us that no matter our circumstance or the burdens we bear, we must always look forward to a bright, successful future and let nothing stand in the way of the path to greatness!
And what a great new year we are looking forward to right here at PMA in Las Vegas, Nevada! New reports from several key news sources indicate that this year will be mostly a seller’s market here in the western states of Nevada, California, and Arizona, with Las Vegas highlighted as a top 25 city in predicted sales activity, outperforming national averages!
There is good news for buyers too! With mortgage rates hitting record lows at the end of 2014 and new construction increasing, now might be the right time for you to buy, or even build, that dream home you have been waiting for! Just a couple weeks ago, 30-year fixed mortgage rates hit a low of 3.8%, and in December, new home building was up 4.4%.
In fact, our new home building company, Liberty Homes, has a beautiful, luxuriously appointed model home available and ready for move-in! Liberty Estates, located in peaceful Northwest Las Vegas, near Ann Road and Fort Apache, can be reached at 702-966-4480. Call today and make an appointment to have our agents welcome you to your new home!
Now let’s take a look at the top five predictions for the National housing market in 2015 (based on Realtor.com’s latest housing report):
Millennials will drive household formations: Both population and households grew at a slightly higher pace in 2014 and this trend will continue in 2015 with modest improvement. Households headed by millennials will see significant growth as a reflection of economic gains. Millennials will also drive two-thirds of household formations over the next five years. The expected addition of nearly 2.75 million jobs this year and increased household formation will be the two key factors driving first-time buyer sales.
2. Existing home sales will increase 8%: Existing home sales will grow as more buyers enter the market, motivated by a clear belief that both rates and prices will continue to rise. The increase in home sales year-over-year will be similar to 2012, but this time the composition of properties sold will be traditional sales with minimal levels of distressed properties. Millennials will account for 65 percent of first-time home buyer sales in 2015!
3. Home prices will gain 4-5%: Low inventory levels and demand driven by improved employment opportunities will push home prices up in 2015, but the growth rate will be slow. While first-time home buyers have many economic factors working in their favor, increasing home prices will make it more difficult to get into high priced markets. As a result, first-time home buyer activity is expected to concentrate in markets with strong employment and affordability.
4. Mortgage rates will end the year at 5%: Mortgage rates will increase in the middle of 2015, as the Federal Reserve increases its target rate by at least 50 basis points before the end of the year. Increases will be modest, and thirty year fixed rate mortgages will reach 5 percent by the end of 2015. One year adjustable rate mortgages (ARMs) will rise minimally. Lower ARM interest rates will influence an uptick in buyer interest for adjustable and hybrid mortgages. While still at historic lows, rate increases will affect housing affordability for first-timers trying to break into the housing market and will be another factor pushing them to less expensive markets.
5. Home affordability will decrease 5-10%: Affordability will decline in 2015, based on home price appreciation and increasing mortgage interest rates. This decline will be somewhat offset by increasing incomes.
So what could hold back growth in the New Year? Tight credit requirements, limited mortgage availability, and a smaller supply of available inventory this year could lead to slower sales. In addition, record numbers of renters and slower than average new home starts may also be contributing factors.
Here in Las Vegas, PMA is optimistic that the market will continue the path to recovery in 2015, as foreclosure rates slide here in Nevada. Late 2014 reports indicate foreclosures were down nearly 38% from 2013, according to RealtyTrac. Even though growth rates are slow, as they are nationally, we are still doing better than during the recession, when prices plunged, construction dried up, foreclosures swept through the valley, and the vast majority of homeowners with mortgages were underwater.
Despite the wariness of forecaster’s predictions, PMA will continue to follow in Dr. King’s footsteps and will remain driven and determined to “keep moving forward” in our path to success! My team is working on many very promising new projects and investments over the coming months and will look forward to bringing you all the latest details as they become available. Keep checking back on www.PMARealtyLV.com and www.KenBaxter.com to keep up with our latest developments. We look forward to seeing you there and here’s to a successful 2015!
With very best wishes,
Ken “Rocket Man” Baxter
Photo: Ken Baxter, Broker/Owner, PMA Realty LLC
Created by: Ken Baxter
Blog Written by: Jennifer Acevedo as told by Ken Baxter