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Las Vegas’ Home Values
By Stephen Roberts | March 5, 2010
“I think we’re tremendously undervalued right now. One reason I saw that is because you can’t replicate a home today for what you can buy it for.” –Larry Murphy (President, SalesTraq)
No part of Las Vegas or Henderson was left unaffected by the dramatic drop in home prices last year. There were some parts of the valley that were hurt less than others but none went unaffected. Some areas only saw about a ten percent depreciation in median home prices while others saw up to sixty percent depreciation on median prices. Overall the median price for an existing home fell thirty-eight percent in 2009, down to $128,108.
New home sales in the Las Vegas Valley hit a 24 year low in 2009 sustaining a forty-eight percent decrease over the previous year. In both the new home and existing home areas, many experts agree that here in the Las Vegas and Henderson Valley, we are extremely undervalued. Many investors are taking advantage of the low priced housing market, driving existing home sales up fifty-seven percent in 2009. About three quarters of the sales were attributed to foreclosures with the median home price being about $116,000 and nearly forty percent were cash transactions.
Another reason the Las Vegas and Henderson Valley may be undervalued is because cash flow on rental homes is strongly positive. Back in the 1980’s investors were happy to break even on a rental home after deducting interest and taxes. At this point in time most investors are taking advantage of the positive cash flow of rental houses and hanging on to their investment until the market picks up.
Larry Murphy, President of SalesTraq predicts that 2010 will be much like 2006 where home prices ended the year just about where they started. It appears as though housing prices are bottoming out here in Las Vegas, but it still may be a while until we see a full recovery of the housing market. It looks as though the worst is behind us. Murphy is predicting that the banks will close on about the same amount of houses as 2009 but there will be a much different result. Rather than foreclosing on the houses, many of the homes will turn into short sales, or deals where homes are sold for less than the mortgage balance. Much of this is due to a new law in Nevada which require mediation before a bank can foreclose on a home.
For all your Real Estate needs contact Steve Roberts at 702-739-4392 or visit my website at www.hendersonrealestateonline.com!
Topics: Henderson Nevada Homes, Investment, Las Vegas Nevada Real Estate, Mortgage Rates, Southern Nevada Monthly Economic Update, foreclosures | No Comments »