Residents of the Las Vegas Valley over the past dozen years have been on a housing rollercoaster. It all started around the beginning of the new millennium. In the 1980’s and 1990’s the valley experienced modest, but consistent single digit increases in the price of housing. Then the roller coaster began.
Fueled by unregulated speculation, housing prices climbed and climbed and climbed. For approximately six years everyone bought houses if they could afford them or not. Finally, the housing market collapsed giving back years of appreciation. For several more years the value of homes remained at low levels as ramped foreclosures kept a dark cloud over the market; until now.
Recovery came in 2014. Average home values in the Las Vegas Valley rose by approximately 20% for the year (source- Zillow Home Value Index), still way below the peak of the recent real estate bubble. This high appreciation has been a welcome relief, but appreciation at these high levels is reminiscent of the roller coaster that helped bring on the recession in the first place.
The last six months has seen a slow-down in the appreciation in home prices indicating the market may be stabilizing. Stabilizing means home owners are seeing single digit increases year after year. This is indicated by:
·Home transactions by all cash investors or “flippers” accounted for a large part of home sales previously. Since the appreciation has slowed, the amount of home purchased by flippers has drastically dropped off.
·The local economy in Las Vegas was one of the first to crash and one of the last to recover, but the economy is recovering. Fueled by almost record low interest rates and low prices traditional buyers are back in the market. People are back to work and looking to buy a new home again. Unemployment was over 14% in 2010 and has improved to under 8% by mid-2014.
· The housing inventory in the Las Vegas Valley has been shrinking for the past few years. This makes home buyers compete more fiercely for a limited number of properties, pushing both list and sale prices higher. Local homebuilders stopped bringing new homes on the market years ago, but this is changing. Confident of appreciation of values, builders are ramping up production.
2015 is just beginning. Indications are positive Las Vegas is back on track for good news in the housing industry. There are no guaranties, but let’s hope we can look back on this year and agree 2015 was the year the market stabilized.
702-990-8660 - Main Office
1742 W. Horizon Ridge Pkwy Suite 100
Henderson, NV 89012
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Location: 1742 W. Horizon Ridge Parkway Suite 100, Henderson, NV, United States | Phone: (702) 990-8660
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