Las Vegas real estate market report

The above chart shows price appreciation and depreciation in the Las Vegas residential real estate markets since 2001.  On average Las Vegas historically had a 5% price appreciation rate year over year until the boom in 2004. 

If the historical increases hold true and prices continue to fall it looks like we will hit a true un-inflated value of residential real estate some time in the first quarter of 2008.  This however does not automatically eliminate the over supply of home on the market.  It is very possible that in the short term prices will fall below the average appreciation line until surplus inventories shrink significantly. 

For those Buyers sitting on the side lines waiting for prices to re-adjust, this is good news as the wait may be only 3 to 6 months more. 

Remember as the new mega resorts on the Strip begin opening,  job growth will begin to spike.  Economists estimate for each new hotel room that opens in Las Vegas 6 new jobs are created to support it.  These jobs would include not only maids, casino, entertainment and restaurant jobs but also maintenance and support services for the workers that fill those jobs. 

This will create more people looking for home ownership at the new lower home prices decreasing excess inventories and eventually driving Las Vegas home prices towards appreciation once again.

For the Latest in Las Vegas real estate call Max at 702-334-2200. Or email me at:Max@MaxSellsVegas. com. Your comments and questions are welcome.

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A few nuggets of FYI:

The downtown casino’s have settled on a new 5 year contract with the Culinary Union. Only a few holdouts remain in the Las Vegas Valley.  The most notable and problematic is the Tropicana which has had major problems with the unions since its takeover.  The word on the street is that the Union may soon strike putting further pressure on this old Queen that has yet to be renovated.  At this point Asatar has not come up with any decisive plan to rebuild on this site.  If this property were to have employment problems it could cause a great deal more red ink since the property cannot currently produce enough income to cover its debt load.  Hold on to your hat as we could see the Tropicana close while they figure out what to do with the property.

At the other end of the strip on the North East corner of Las Vegas Blvd. and Sahara, the old “Holy Cow Casino aka the Ivan Condo Tower” site has been sold to a quiet reclusive real estate investor from Arizona.  He said he has no plans for the site but felt it would be a good investment.  In my personal opinion this is investor speak for “I’m negotiating to buy more land around it or cut a deal with an adjoining property owner.”  It will probably be Spring before we hear any plans for this high rise zoned corner.

Near the Northwest corner of Sahara and Las Vegas Blvd. the Allure condominium Tower I is nearing completion and will start owner move-ins in the next few weeks.  The second tower has been moth balled until the market changes. 

The number of Las Vegas homes for sale keep rising as the Lenders continue to foreclose.  I personally have had several calls from home owners trying to figure their way out of the payment reset jamb from exotic mortgages.  It seems that the Companies such as Countrywide have not been returning their customers calls according to my source.  She stated that she has tried several times and left messages on their answering service but has yet to receive a return call.  It seems that perhaps the willingness of some of these companies to save people in foreclosure may be more “Public Relations” than earnest effort. Of course the above is my personal opinion and not any statement of fact.

For the Latest in Las Vegas real estate call Max at 702-334-2200. Or email me at:Max@MaxSellsVegas. com. Your comments and questions are welcome.

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From 2004 through 2006 Las Vegas investors and residents took out approximately 150,000 high risk loans according to the Wall Street Journal.

As previously reported Las Vegas had an investor ratio of approximately 30% during that time. This translates into 45,000 investor loans and 109,000 primary and second resident mortgages.

Subpime loans amounted to approximately 23% of the total loans that were made during this 3 year period.

Most of these loans came with a 2 to 3 year reset period which translates into increased foreclosures in 2008 and diminishing through 2009.  

A great majority of the subprime loans will not reach the foreclosure auction block but if 25% due forclose that will result in approximately 37,000 homes needing to be resold with much tighter financing requirements.

The bright spot in all this is that in 2009 Las Vegas is going to have a shortage of employable workers and the 6,000 new residents it currently is welcoming may further balloon as people across the country learn about its need for workers.

My belief is that the last quarter of 2009 and first quarter of 2010 will once again see the market change and once again become a Sellers market.

For the Latest in Las Vegas real estate call Max at 702-334-2200. Or email me at:Max@MaxSellsVegas. com. Your comments and questions are welcome.

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By now if you haven’t heard that the average price of a home in Las Vegas has decreased then its time you knew.

If you are like so many other investors or home Buyers you are probably standing on the sidelines waiting for the prices to quit falling and then you will swoop in and grab the deal of the century.

I have a few things you may wish to consider while sitting on the sidelines waiting for the market to change.

Let’s start by considering what is happening right now in the Las Vegas real estate market.  Five days per week there are approximately 100 properties being auctioned off at the Trustee Sale in downtown Las Vegas.  Of all these homes selling on the auction block only about 6 to 8 per week are being purchased by anyone other than the mortgage company who is doing the foreclosure.

With 500 homes going back to the banks per week where do you think they are being sold?  The Greater Las Vegas Association of Realtors Multiple Listing Service has a great many of these properties but they do not have them all.  Many properties are being wholesaled to Buyers at substantially lower than market prices.

The worst estimates by most economist suggest that Las Vegas real estate may fall in value by up to 16%.  If you could buy today at below a 20% discount would this mean its time to get back in the market?

What you need is a Buyers Agent in Las Vegas!

If ever their was a time you need a Buyers agent under contract to find you the very best deal, now is the time to hire one.

Yes, you may have to pay them a 3% commission but if they find you a deal at 30% below market that still figures a healthy gain for you of 27% in your pocket.  A deal like this would be virtually bubble proof.  These types of deals are available if your Agent knows how to find them.  Yes, they will require a lot of work but it will pay off for you in the end.

If you were the Bank selling these properties at 20 to 30% discounts and you saw indications that the market was leveling out or even starting to rise would you continue to sell properties at deep discounts causing your company more losses or would you change your policies and start requiring higher prices for your foreclosed homes?  If you care about your job you will raise the prices if they will still sell.

The point is the smart Buyer needs to buy while the market is headed down but in such a way as to insure that they have purchased low enough to insure that when the market bottoms out they have still make a great deal.  This is a possibility in the market today but as the market bottoms out, in the next 6 months, the market pricing will begin to firm up and deep discounts will disappear.

Use a contracted Las Vegas real estate Buyers Agent to help you find a home run deal today.

For the Latest in Las Vegas real estate call Max at 702-334-2200. Or email me at:Max@MaxSellsVegas. com. Your comments and questions are welcome.

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If history repeats itself then the graph above can give us some sense of what is happening and possibly going to happen in the U.S. real estate market.  Case Shiller issued the above chart in July 2007. 

What makes this interesting is the historic last dip in the market we experienced in 1990.  If you will take note we seemed to find the bottom of that market in 1991.  This lead to another smaller decline culminating in 1993 and a second decline in 1996 which then brought the market back to a zero basis and the beginning of the last historic climb from late 1996 through 2005.

Beginning in 2005 the real estate markets began to slide and are continuing their decent and now with the lending markets in turmoil we will see further slides until either the mortgage companies wake up and decide to renegotiate their contracts with their debtors on all the exotic loans they handed out, or they simply go broke and other mortgage companies step in and take up the slack.

No matter what happens in the mortgage market it looks like from an historical perspective we will continue to see prices slide and the market continue to slow at least through the first quarter of 2008.

We in Las Vegas have other factors to consider in this real estate roller-coaster ride.  A major consideration is the investor factor.  In 2004 and 2005 we had almost as many short term investors putting money in our real estate market as we did visitors betting on the blackjack tables.  It is estimated the half the real estate sold in those two years was sold to investors.  This means that a vast amount of oversupply in real estate is on the market due to investor gambling and much of this inventory is not occupied.  These propeties are surplus inventory.

With 6,000 people moving in to Las Vegas each month you would think we will eat up this excess inventory in a hurry and eventually we will, when these new move-ins decide the market has bottomed out and its time to buy. But for right now most are renting!

So where does this down cycle end? For we here in Las Vegas it looks like we will be experiencing a shortage in the work force in 2009 when 45,000 new hotel rooms come on line.  Employment Security is estimating the need for about 110,000 workers and estimates a shortfall for the available jobs coming up.  This may lead to a competition for good workers leading to increased income.  This means we could see new qualified Buyers in the market place looking to Buy a home in late 2009 and early 2010.

Keep in mind that we still have all those Buyers that are out their renting now.  If they don’t purchase before this employment flood in 2009 they very well may find themselves not getting the deal they were waiting for but may have to buy in an appreciating market.

For the Latest in Las Vegas real estate call Max at 702-334-2200. Or email me at:Max@MaxSellsVegas. com. Your comments and questions are welcome.

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