A Las Vegas real estate Buyer Kenson Kuba asked, “Are we near the bottom in home prices in Las Vegas?”

 It depends on what you are buying.  Condo/Tels where financing has dried up and there are about to be thousands put in the market we may see further price declines due to lack of cash Buyers for these expensive high-rise units. 
As to high-rise condos.  These units have still not met break-even levels for investors.  Either rents must go up or expenses decrease or the price of these units may continue to fall.  Some Financiers of whole projects that have foreclosed on these projects are now taking a dual approach trying to rent and/or sell the units.  The cash flows from the rental do not meet the debt loads on the units but do give some cash flows.  For condos that require loans of over $415,000 (jumbo loans) Buyers will commonly need a 50% down payment to acquire financing if at all.  This means these units should continue to see additional price reduction due to lack of demand, financing problems and cash flows.
Regular condos.  This area of the Las Vegas real estate market is the most deeply depreciated area of the market.  Good units can be had for under $50,000.  While adequate units can be had for under $40,000 and poor quality units under $30,000.  The above is a general rule of thumb with exceptions.
I do not see the prices of these units continuing to fall significantly so long as financing is available for the specific project. FHA will not finance a condo in a complex with non-owner occupied units exceeding 51%.  Fannie Mae and Freddie Mac also have new financing requirements hinged on owner-occupancy.  This may preclude a number of condominium complexes from getting financing in the near future.  This will cause them to further depreciate as only cash Buyers will be able to acquire these properties.
Single family homes-  To determine the bottom of the market in single family homes you have to divide them into three distinct categories:
Luxury homes needing Jumbo financing- If a loan of over $415,000 is needed to finance a home purchase then these loans are EXTREMELY HARD TO GET RIGHT NOW!  This means the more as a percentage that the Buyer wishes to finance the less likely they will qualify.  It is not unusual for a Lender to require 50% or more down to gain a commitment for a Jumbo Loan currently.  This means that this sector of Las Vegas homes is not moving well and prices will continue to depreciate on these products.

Medium priced homes $250K to $450K homes.  These homes are usually sold to the move-up Buyer.  Since most of the lower priced homes are REO’s there are not a lot of move up Buyers in the market place.  These homes have already been discounted in the market place and usually reflect a 30 to 60% discount from the top of the market in 2006.  These units do not have financing problems and many are now moving in the market place.  I do not see them continuing on any drastic decline in pricing.  This does not mean that in areas where there are heavy concentrations of these homes that have been repossessed (REO’s) that it is not possible for further isolated discounting.

Low priced and starter homes- up to $250k these homes are the properties most affected by the Sub-prime foreclosure market.  They are also the group that received the fastest price adjustments due to the numbers on the REO lenders books.   We are now receiving multiple bids on these units and it is getting challenging to find units in good shape for Buyers to purchase.  The sales numbers in this price group have soared in the last few months and the number of units in this price range being offered by the banks seem to be declining rapidly. So in this price grouping I think we are past the low in the market baring any substantial increase in financing cost that would drive the Buyers away.

If you would like further more detailed information please contact me:
 Max Schmidt
702-334-2200
Max@MaxSellsVegas.com