Why Now is a Great Time to Buy a Las Vegas Home

Currently, it’s cheaper to buy then rent even when taxes and insurance costs are factored in. This is a very unusual time. This situation only happens after a market crash following a bubble. When things return to normal, the process is generally chaotic.

The last decade saw prices rise to a point that was far beyond being affordable. Returning to normal was inevitable in the long run. After a bubble pops, things generally don’t just return to normal and stop. A correction is usually opposite in proportion to the bubble that it corrects. Now, prices have fallen below the long term trend line.

Having said that, you should not expect a fast recovery. Even though it is finally a good time to buy, there should be no rush. Another historical fact is that recoveries following a massive boom and bust cycle will take many years. One more important point is that there is no guarantee that prices will not fall further.

This is does not mean that you should wait with the sole purpose of timing the bottom. Like investing in the stock market, timing the perfect buying opportunity is next to impossible. Goldman Sacs predicts that prices will fall nationally a bit further and bottom out in 2013.

If you’re buying for investment reasons, be sure to make a good positive cash flow. In addition, don’t forget to factor in vacancy loss when calculating your investment’s potential. In Las Vegas especially, vacancy rates are very high as many homes are sitting empty. You can use our cash flow analysis calculatorto avoid the most commonly overlooked expenses.

Another reason why buying now makes sense it that interest rates are near record lows. This will not last forever because government deficits and money printing will eventually overwhelm the financial system. If you can lock in a low fixed interest rate, it is likely you’ll pay off your new home with very cheap dollars over the next 30 years.

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