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Inflation Going Into April

It’s the end of March and we are starting to see a lot of movement happening in the financial sector. The Federal Reserve is raising rates as the CPI (Consumer Price Index) data states we were at a 7.9% inflation rate in February. This number is believed by many economists to be an inaccurate measurement as they do not factor in housing costs which in many parts of Las Vegas are up 35% YoY in rent increase. You can see it all around us just inflating until it’s ready to pop. Below is the latest charts from the Bureau Of Labor Statistics:

 

My prediction is that housing will remain sustainable until the moving parts are settling down. Many people have resorted to moving in with friends or family to afford the increasing housing prices. Investors and cash buyers are also capitalizing on  these wild swings and taking profits wherever they can find them. Vegas economy really depends on the tourism industry and the time to take a vacation has never been better for those that have been mostly indoors during the pandemic.

I believe that if there is any catalyst to making the housing market take a hit, it would most likely be employment. If Las Vegas tourism industry takes on lower revenues, you can expect employment and wages lost to be a huge culprit for affecting home prices. At the end of the day, houses are only worth what people are ABLE to pay. This takes me to my final point that could affect home values…

Interest rates. Why are these so important to keep track of? Well for buyers, if the rates jump 0.5%, that gives them 10% less buying power. In a cash-strong market this wouldn’t be a big deal for sellers. The problem is, investors already know what buyers can buy after they buy so their cash offers will drop as well. I made sure that our “buy” portion of our website has accurate and live data so you can track these numbers and homes available in real time. Timing is almost impossible in the stock market, but in real estate you usually have strong indicators to tell you when the peak and dips will be. The three main factors you need to look at are: Total Inventory, Price, and Days On Market.

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