What Rising Home Prices Look Like in Photos
So we all know (unless we’ve been living under a rock) that home prices have continued to increase at a very rapid pace. We’re up roughly 20% in one year in the Las Vegas area, and in fact, our June Median sales price of $395,000 was $10,000 more than just the month before.
When we look at the price increase, we love it (as Homeowners). But we also need to think about what it means for a) those that want to become homeowners by entering the market, and b) what it means to you as someone that wants to sell and buy. The best way to do this is put it into a perspective of what a ‘typical’ home looks like now, versus what the price COULD have bought a few years back.
For this exercise, I am going to use the June, 2021 Median Sales price for a Single Family home, which was $395,000. I will then put into the blog what that price, $395,000, WOULD have bought in June 2020, June 2017, and June 2014, just to show you what the Market has done over the last 7 years.
This should be fun…
June 2021
The Median Home Price is $395,000 for Single Family homes here in Las Vegas. Searching the MLS for homes that just sold, the Typical $395,000 home had these characteristics:
3 Bedroom | 2.5 or 3 Bath
Roughly 1900 Sq Ft
Built in the 2010’s
A nice home by any means. But at over $200/sq ft, definitely less affordable than what we have seen in prior years. If the stats above don’t really do anything for you visual learners, here is what a photo of a ‘typical’ June 2021 home looks like.
Courtesy of LVR
June 2020
So in June of 2020, the Median Home Price was only $325,250, so for the extra $70k or so, you would expect to be able to get more home for that same $395,000 that we are discussing. In fact, when you look at the stats deeper, here is what a typical $395,000 home that sold in June 2020 would have looked like:
June 2020 - courtesy of LVR
So the homes, when looking at the photos, look similar right? Both 2 story both look the same, roughly at least, but here are the details that are a bit more shocking. Here are the stats on this home:
2,615 Sq Ft
4 Bedroom | 3 Bath
Built in 2015
So a year ago the same amount of money would have roughly gotten you 500-700 sq ft MORE, and an extra bedroom. This specific property also sold for $151/sq ft, a full 33% LESS per foot than the typical June 2021 home sold for!
June 2017
Going even further back, we hit the market 4 years ago, in 2017. This is where things really start to separate themselves. In June 2017, the Median Sales Price for a Single Family home was $260,000. I know, don’t kill the messenger. We are more than 50% higher than that today, which is a large increase. Back in 2017, what you could get for $395,000 also makes me shake my head. Here are the characteristics of a home sold in June 2017:
2,619 Sq Ft
4 Bedroom | 3 Bath
SINGLE LEVEL
Pool
Gated
Notice, the home size didn’t quite increase much, but that’s really more about the fact that builders aren’t just building bigger and bigger (or smaller and smaller) homes. But take a look at the detail. So for $395,000 you’re in a single story home with a pool and in a gated community. And the home probably looked something like this….
Courtesy of LVR
June 2014
I ended this exercise in 2014 for a couple reasons. I wanted more reliable data, but I also wanted to see what it was like the year we purchased. Syd and I closed on our home in March of 2014, so it will be similar to what we’re presenting here.
Going back 7 years, which by the way, happens to be in the average range of home ownership in the United States, we do see a continued trend of getting MORE home for the money you can get the typical home in June 2021.
In June 2014, well before COVID, etc, we had 2675 Single Family sales (we had over 3500 in June 2021), and the Median Home Price was $199,950. Yes, under $200,000. The ‘typical’ home in Las Vegas, 7 years ago, sold for about HALF of what it sold for last month. If you were in the market for a home in 2014, and were going to spend right about $395,000, this is what the ‘typical’ home would have:
3,000 sq ft
4 Bed | 3 Bath
$131/ft
Pool
Gated
And it would have looked like this…
June 2014 - Courtesy of LVR
Couple things on this. First of all, it ended up reselling in 2018 for $421,500, and would be worth well over $550,000 in today’s market. Second thing I noticed; how much better Real Estate Photography has improved over the years.
Summary
Clearly, the market has changed over the last year, and of course, over the last 7 years. This post is not intended to scare anyone from buying or selling; in fact, quite the opposite. One of the main things we hear as Realtors is “We are going to wait for the market to cool.” That doesn’t happen, nor is it intended to overcorrect like it did in 2008-2010. Real Estate is a great investment, and as our exercise here has proven, it’s not just about the price you pay, but what you’re getting for that asset. Money, with inflation, etc does change value over time, but the hard asset remains. So, for the same DOLLAR amount, you could buy a 1900 sq ft 2 story home today, or could have bought something LARGER, SINGLE LEVEL (which sell for more), with a pool, gated community, etc.
The market is always going to fluctuate. There will be large increases, there will be small increases, and there will even be periods of flat markets or down markets. But the value of the asset will continue to ‘shrink’ over a long enough period of time.
“Don’t Wait to Buy Real Estate. Buy Real Estate and Wait.”
- Will Rogers (and others)