Graham Team Real Estate

Graham Team Housing Market Update • 4th Quarter 2024 Headlines Lie - Surprising? Not Really! The internet and news articles love to grab your attention with flashy headlines. Over the last 12 months, I've received calls from clients asking what I thought about this or that report and in almost every case, the main headline turned out to be the exact opposite of the truth, or completely unrelated to the figures or quotes in the article. The lesson here is to always read the article properly before getting carried away with headlines, as painful as that might be for many of us. I naively used to believe that while words may lie, numbers do not – but the analysis and reporting of these figures is at best intentionally misleading. That being said, here are the actual raw stats for 2024 so you can make your own informed decisions. Last year (2024) ended on a positive note for residential real estate, with three out of four key factors performing well. Homeowners experienced a 5.6% appreciation on average for single-family homes and 7.4% for condos. We sold 23,180 single-family homes in 2024, which was 189 more than in 2023. Although relatively flat, it’s still on the positive side. New home listings rose by 4,008, an increase of 14% year-over-year. This 14% increase and the relatively flat trend for units sold bring us to another key factor– the amount of available inventory, which increased to 2.7 months. This is great if you’re buying a home as you have more options, but an adverse factor if you’re trying to sell. December 2024 Housing Market Snapshot   In our 3rd quarter market update, we discussed how mortgage rates aren’t necessarily a bad condition for the real estate market. In the first week of 2025, a stronger-than-expected jobs report was published, which revealed strong job growth with no accompanying increase in wage inflation. Strong employment figures are good for the overall economy as people need jobs to be able to purchase homes. However, the financial market doesn’t like surprises and when unexpected figures rattle the market, we tend to see rates rise. We ended 2024 with a low 6% rate for mortgages, but recently (January 13-17) saw a rise to 7%. This rate is expected to settle down and remain in the low to mid-range for the 1st quarter of 2025, but the odds of the Federal Reserve cutting rates in the coming months have shifted to highly unlikely. https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fixed The opposite is also true because an increase in mortgage rates can hurt the housing market. With Nevada being a swing state, you could barely turn on the radio, TV, podcast, or open social media without being bombarded with headlines about the US housing market crisis during the build-up to the presidential election. Home affordability is in a critical state. With mortgage rates remaining in the 6-7% range and house prices rising every year, many families are simply priced out of buying a home. The number of Southern Nevadan households that can afford the median home price of $479,900 in Las Vegas is less than 33%. A 15% deficit currently runs between median income and median home price. This reduced number of homebuyers affects the home market with either increased lengths of time to sell or eventually median home prices if incomes don’t rise to match. Affordability is currently the most significant factor affecting the Southern Nevada housing market. With rates in the 6-7% range, a median price of $475,000, and a typical 5% down payment, the required household income to qualify for the monthly payment is $134,000. Official data for 2024 income levels is not yet available, but a reliable forecast shows median household income currently at $78,538, which is a sizeable disparity. In states such as California, New York, and Hawaii, affordability has not hindered the resale of homes, so in comparison to neighboring states Southern Nevada is still an affordable option. The key matrix for the Southern Nevada housing market over the 3rd quarter of 2024: Median Home Price: $475,000 ⬆ YOY* 7.59% | ⬇ down 1% from 3rd Qtr Homes Sold (4th Qtr ): 4,945 ⬆ YOY (.01%) | ⬇ down 14% from 3rd Qtr (homes are typically lower in the 4th qtr.) Inventory (3rd Qtr ): ⬆ YOY 8% | ⬇ down 10% from 3rd Qtr Mortgage Rate: ⬆ YOY 30 basis points % on rate | ⬆ from 3rd Qtr 40 basis points % on rate *YOY = year-over-year Five-Year Look at the Housing Market: Seeing all green is not a good thing – the increase in months of inventory means it takes longer for the average home to sell. In December 2023 57.65% of homes sold in under 30 days. Whereas, in 2024, the number decreased to 50%. The real positive for homeowners is the percentage of equity gained in the last five years, based on the median sales price equity gain of $162,010, which is an average of $32,402 a year.   Core Factors of the Housing Market Mortgage Rates: Every single mortgage analyst missed the mark in their 2024 forecasts, from Fannie Mae predicting 5.7% to the National Mortgage Association speculating 5.8%. The closest was Realtor.com’s 6.3% forecast. Coming out of such a high inflationary period, none of the usual forecast modules are working, and you may be best off planning on rates staying in the 6% to 7% range for 2025. Affordability: Household income levels need to rise to the same levels that home prices and other staples have over the last four years. Until that occurs, we will be facing a housing affordability crisis. We don’t expect to see home prices falling any time soon. Rental Market The median rent for a single-family home has dropped slightly by $90 a month, with median lease rates now standing at $2,100 for a +/- 1,835 sf home. The median price per square foot is $1.18, with new homes or updated homes still obtaining a premium. The days-on-market for a rental home is now 34. Graham Team's 2025 Forecast Sales Prices: Mild appreciation in the 2-3% range Interest Rates: Fluctuating between 6% and 7% for most of the year Foreclosures: Flat Inventory: Hovering around 3 months Rental Rates to Flatten: Maintaining the median price of $1.15 to $1.20 Buyer Opportunities Moderate Selection: We expect inventory to remain within the 2-3 month range for the first half of 2025 Be Prepared: For all those who were waiting for the election to be over and thought prices would drop – guess what? The election period is over, and prices have remained steady. Out-of-Pocket Expenses Very few over-appraisal value offers. Sellers are willing to contribute to the buyer’s closing costs & buyer’s agent representation commission. Sellers are willing to accept offers with loan programs for down payment assistance. We have closed several homes with these programs over the last few months. Neutral Terms Repair requests will be more evenly considered now. Buyers can think about the homes they tour and decide on the best one for them, with no pressure to make a same-day decision. Competing with fewer multiple offers. Longer close of escrow (COE) periods. If you are on a lease and need time to coordinate the end of your lease term closer to the COE, we have successfully negotiated longer dates, which reduces costs and gives you more time, relieving stress. Affordability: Never buy more home than you can afford. Never be house-poor. Financial Advisors and Mortgage lenders recommend that 25-35% of your gross monthly income be put towards your home mortgage payment (Principal, Interest, Tax, Insurance = PITI). For those who have the income to qualify and provide it fits their family’s budget, buying ahead of the wave of buyers may offer the best deal. Many of our lender partners offer their clients a one-time rate adjustment within 3-to-5 years, which can give you an advantage at today’s home prices and then a reset when mortgage rates drop. Never speculate about rates dropping; however, only purchase a home that fits your budget. New Home Option: We expect new home builders to be offering some financing incentives in the 1st quarter of 2025. We keep track of all current incentives and releases, so we have real-time information for our buyers. Renting: Still Expensive If you rent a home for $2,200 for 3 years, you just paid your landlord $79,200 with no equity, no gain. Go Smaller Than You Thought: Take the first step to building your net worth with homeownership, but purchase a home smaller than the one you’re renting. This will set you up for success and financial strength to purchase the home you ultimately desire. Seller Opportunities Get Rid of the Ugly or Negative: When we have lived in a home for years, we tend to not see it through the same lens as buyers. With more inventory available, we’ve seen a significant difference in offers when a seller has addressed their home’s ugly or negative aspects or, even better, added a WOW factor. Please make sure you speak with a real estate advisor before spending your hard-earned dollars, however, as you could be focused on the wrong aspect(s). Our Advice: Make those necessary repairs and maintenance items. Review the market comparably and be realistic with your home’s current value. Marketing your home is extremely important, and having a high-quality online presence is crucial. Have patience. It will take longer to sell. Fifty percent of homes sold in 30 days; we expect to see that number stay relatively flat. Buyer terms: Expect home buyers to ask for closing cost credits, contributions toward their agent commission, and reasonable repairs. We are seeing a lot more seller-occupied homes on the market. Have a showing schedule that accommodates the most amount of buyer traffic, resulting in more and better offers. Post-occupancy for our sellers: We can negotiate terms that allow the seller to remain in the home for up to 60 days (sometimes longer, depending on the buyer’s mortgage), which allows our sellers to make stronger offers on their home purchases. It also takes the stress out of worrying about a contingency deadline on their new home. Questions about this report? Contact us: Graham Team Real Estate • (702) 930-9551 • Team@grahamteamnv.com 3007 W Horizon Ridge Pkwy, Ste. 210, Henderson, NV 89052  

Unlock the Potential of Spring Sales: Why Early Preparation is Crucial Spring marks the peak of the real estate market, a time when buyer activity surges, ensuring faster sales and higher property values. If you're contemplating a move, leveraging this season's increased demand by listing in spring could be your best strategy. With spring fast approaching, the window to get your home market-ready is narrowing. Although a month might seem ample, it will pass swiftly, and it's crucial not to rush this vital preparation phase—especially this year. Essential Repairs Take Center Stage This Spring Currently, the market dynamics are characterized by an increased inventory of homes and highly discerning buyers. This scenario underscores the importance of dedicating time and resources to strategic repairs. Many homeowners are already ahead, engaging in significant upgrades. Carlos Martin, Director of the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, notes in the 2025 Outlook for Home Remodeling: "... homeowners are gradually increasing the scale and pace of their remodeling efforts compared to recent years." Top remodeling choices include the replacement of essentials like water heaters, HVAC systems, and flooring, with a focus on energy efficiency, as recent Census data on home improvements suggests. Setting Your Priorities While following general trends can be insightful, personalize your approach by considering what would appeal to you as a buyer. Aim for quick, impactful fixes within the available time, but don't overlook critical repairs that could deter potential buyers. Addressing major items such as an aging roof or worn-out flooring can be daunting but rewarding, particularly if they offer a high return on investment (ROI). Real estate agents are invaluable in this process, using tools like Zonda's reports to identify updates that yield the best ROI. As highlighted by Bankrate: "As a seller, being prepared and managing controllable aspects can smooth the path to a successful sale and maximize financial returns." Engaging with a real estate agent early allows you to evenly distribute the workload and secure necessary contractors without haste. Delaying these preparations risks insufficient readiness by spring, potentially diminishing your home's market appeal compared to more prepared listings. If a spring sale is in your plans, now is the time to begin addressing your home improvement list. However, before diving into this undertaking, connect with me. Together, we can determine the most effective use of your time and resources to ensure long-term benefits. Feel free to share your current home improvement list, and let’s strategize the priorities together. Also, our home improvement program, called the 10X Program, where our sellers receive more money for their home in less time. Get the same benefits as professional flippers without lifting a finger. Visit 10xmyhome.com or call 702-930-9551.  Graham Team Real Estate • (702) 930-9551 • Team@grahamteamnv.com 3007 W Horizon Ridge Pkwy, Ste. 210, Henderson, NV 89052  

3 Reasons to Purchase a Home Before Spring Arrives Navigating the housing market with current mortgage rates might seem daunting. You may wonder if it's better to wait until spring when the market blooms with more listings and potentially lower rates. However, waiting could lead to more competition, increased prices, and additional stress. Consider the advantages of securing a home now, before the spring surge. Here are three compelling reasons to buy during the winter months. 1. Reduced Competition Winter often brings a lull in the housing market, with fewer people actively searching for homes. This seasonality leads to less competition, allowing for a more relaxed and thoughtful buying experience. The National Association of Realtors (NAR) reports that homes remain on the market longer in the winter than in spring or summer. This dip in buyer activity can increase your negotiating leverage and allow for more thoughtful decision-making. The Alabama Association of Realtors notes: "The winter market offers a significant advantage in terms of reduced competition. Many buyers postpone their search until spring, leading to fewer buyers in winter. This lower demand can enhance your negotiating position, as sellers might be more receptive to offers and willing to make concessions to close a deal swiftly." 2. Enhanced Negotiating Power With properties lingering on the market, sellers become more inclined to negotiate. This can manifest as lower prices, closing cost contributions, or agreements to complete repairs. Chen Zhao, an Economist at Redfin, observes: "Buying during the off-season can mean fewer competing offers, which might enable you to negotiate a better deal." This decreased demand puts you in a favorable position to discuss terms that suit your needs, potentially making your home purchase more affordable. 3. Secure Lower Prices Before They Increase Price trends historically show that home values are often lowest in the winter months. According to NAR data, home prices were notably lower in the early part of the year, just before the spring market picks up. Bright MLS data from 2010 to 2024 indicates that January and February prices were, on average, 15% lower than during peak periods in June. Purchasing a home during this time not only potentially saves you money but also allows you to lock in prices before the usual spring increase. Home values generally appreciate, rising year over year. By buying now, you capitalize on potentially lower market prices and avert future price increases. Conclusion While spring may traditionally be viewed as the optimal time to buy, purchasing a home before the peak season can offer significant benefits like reduced competition, more room to negotiate, and the chance to secure a home at a lower price. If you're considering entering the market, now might be the perfect time to explore your options and possibly secure a great deal. Let's connect and start your home-buying journey. Read More: 2025 Housing Market Insights Graham Team Real Estate • (702) 930-9551 • Team@grahamteamnv.com 3007 W Horizon Ridge Pkwy, Ste. 210, Henderson, NV 89052