Las vegas real estate | the big gamble

Las Vegas Real Estate | The Big Gamble

Purchasing property now in Las Vegas is a gamble. You have got to have all the right cards. These include credit, capital, and long term security. Sure, these may sound obvious, but in today’s market, home sellers and the banks issuing loans are looking closely at potential investors. Real Estate is still a commodity. People are just taking a higher level of morality and opportunism to it. If you are in the market to buy, be sure to work with a trusted real estate professional. Then, if all the cards are right, you can bet on a big win.

In late 2006 and early 2007 the Las Vegas real estate market hit its all time median price high of around $320,000. Shortly thereafter, the now infamous “credit crunch” began in late summer 2007 and the entire economy, especially the housing industry, has been reeling backwards ever since. Over the last 18 months, the median home price in the Las Vegas valley has dropped an average of $10,000 per month…settling in at around $125,000. Prices have literally plummeted by as much as 75% in some segments of the Las Vegas market. And guess what? The free fall is over. They are not going to go down anymore.

I understand that this is a bold claim. But there are several factors that you must evaluate when trying to determine the bottom of a housing market. I have quoted these factors several times over the last two years, and have always maintained that they did not all line up…until now. The factors are: 1. The inventory of homes listed on the local Multiple Listing Service (MLS). 2. The number of homes being sold in the marketplace. 3. The average median price of homes. Once the inventory stops increasing, the volume begins trending upward and the median price stabilizes… you have found the true bottom of the market.

Looking first at number 1: The inventory of available single family homes in Las Vegas remained relatively stable at about 22,000 homes through much of 2008. This inventory is now at a level of just under 12,000 homes listed on the market ready for sale. Inventory is nearly ? of its 2008 levels. Homes under $200,000 now have less than 4 months standing inventory. Homes under $100,000 have less than 3 months inventory. A normal healthy inventory is considered a 6 month supply of homes. The inventory of available homes is getting scarily low as realtors are worried about what to sell if they do not get some fresh foreclosure inventory.

Foreclosures reached an all time high in March of 2009 with over 7700 new foreclosures announced in Clark County. A large factor in this number being so high was the moratorium announced by the Obama administration that ended in the first quarter of the year. In contrast, April 2009 totals are showing only 1289 homes were foreclosed on in Clark County. This is the smallest amount of foreclosures for the Las Vegas area in the last 16 months. As foreclosures dry up, this will continue to contribute to the huge decrease in standing inventory that we are now observing.

So there you have it, some people are enthusiastic about the market. Opportunities await. Just be sure to have your credit and capital in proper order. After that, the sky is the limit.

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