You may notice on your next trip to Vegas that the complexion of our city is changing and becoming ever more diverse. Real estate in the valley is getting worldwide attention, bringing buyers from far-flung reaches of the globe. In fact, a recent story in the Montreal Gazette tells its readers they can get a $50,000 investment property in Las Vegas and rent it out for $1,000 a month. We say, “Come on down!” We like Canadian money – and Chinese money and even California money.
I had a little trouble believing there are really homes in Las Vegas priced under $50,000, so I ran my own check of current listings. The least expensive home on the market is listed for $7,900. Not a typo. That is seven thousand nine hundred dollars. In total, I found almost 2,200 homes priced under $50,000. Granted some of these are in a contingent status, meaning that they have offers in place, but that number represents a significant inventory of very low-priced housing in the Las Vegas valley. It also rivals the Luxor’s Sky Beam as a beacon to investors around the world.
The Greater Las Vegas Association of Realtors® (GLVAR) reports that, although October sales were down slightly from the previous month, they were up a bit from a year ago. October typically starts the seasonal real estate slowdown, so those figures aren’t surprising. What is of note, though, is that half of all the homes sold in October went to cash buyers. Since cash buyers are typically investors, this is good news for the rental market and bad news for the average homebuyer, who has to work doubly hard to get financing nowadays and then is forced to compete with a cash offer. Cash generally speaks louder than a promise from a lender.
If you’re in the market to buy a Las Vegas home, this might be a good time to sit back and wait awhile. Yes, waiting for a fickle market is a gamble. This is Las Vegas, after all. But here is why I say that: According to Steve Green, of the Las Vegas Sun, October’s median home price — $121,000 – was down 1.9 percent from September and down 9 percent from October 2010. This hints at the fact that housing prices may not have hit bottom yet. In fact, many forecasters, such as Dennis Smith of Home Builder’s Research, predict that we won’t see the bottom of prices until the Las Vegas market shrinks its available inventory. So, rather than compete with all that cash, take a break and come back to the market when prices are at rock bottom. Just make sure you have a savvy real estate agent to keep an eye on the market for you – and one who can guide you through the process. Remember, buyers don’t pay Las Vegas real estate fees – sellers do.
Recent Las Vegas real estate news also shows that the valley has retained its “foreclosure poster child” status. The stats, however, don’t tell the entire story. October brought an 88 percent decline in the number of default notices filed against delinquent borrowers. But – and there’s always a “but,” right? – the reduction can be directly tied to new Nevada legislation that makes it a felony for lenders to rush through filings without reviewing each case thoroughly. Doing away with robo-signing meant a slowdown in their previous lickity-split process of shoving files through the foreclosure process. Note, I didn’t say “stopped.” The new law merely slowed down the process and we can expect to see a tidal wave of foreclosure filings in the near future.
While this is bad news for Las Vegas’ distressed homeowner, it’s good news if you’re in the market to purchase a home. The median price of foreclosed homes in Las Vegas is $14,500 less than the median price of short sale properties, according to the October numbers released by GLVAR. Although many homebuyers consider a short sale home a bargain, October’s numbers tell a different story. The median price of a short sale home in Las Vegas is actually about $2,500 more than the median price of every home sold in the valley.
Las Vegas homeowners with equity (is there such a thing?) that need to sell should probably do so now before prices fall further, or find a good tenant. Underwater homeowners – those that owe more on the home than what it’s worth – should probably go the short sale route if they need to sell. You’ll be in good company, since 70 percent of Vegas home sales are foreclosures and short sales, according to the Las Vegas Review Journal’s Hubble Smith.
Not all is doom and gloom in the valley of sin. A drive around the southern part of the valley finds a condo complex en medias res – so close to completion when the developers stopped work. It’s been sad to watch it sit and rot over the past couple of years – windows shattered, the site littered with the detritus of squatters and partiers. Yet, five blocks away the air is filled with the sounds of hammers and saws as construction workers are finally put back to work on a townhouse complex. I highly doubt new home starts will soon reach the level we once enjoyed years ago, but there are signs of life in the desert. And that’s the herald of hope we’ve been waiting for.