Las Vegas Real Estate Blog

According to CNNMoney - The epicenter of foreclosures shifted to the booming city of Las Vegas at the end of 2007. Here is the list of Top 20 Worst-Hit Foreclosure Zip Codes below

ELITE REALTY
7448 W.Sahara Ave. #106 • Las Vegas, NV 89117
Office: (702) 856-6680 • Cell: (310) 529-5360

Website: http://www.lasvegas-buyandsell-realestate.com/ • Email: arina.lv@gmail.com

Las Vegas Housing Market: Causes of the Current Situation

There is a lot of talking about Las Vegas housing market, attitudes range from confusion to denial to dismay. The real estate in apparent oversupply by itself creates a general concern and confusion. But the oversupply is not the only cause to the housing increasing decline. The correlated factor the demand is declining as well.

"When a market reaches its top, more buyers decline to purchase, and volume slows. Sellers are reluctant to acknowledge the new reality and usually refuse to reduce prices, with the exception of motivated sellers (this factor is a subject of an other analyses) Generally in a declining market no one can sell because no one will buy.  In reality buyers simply do not buy at today's price if he believes that tomorrow's price will be lower." says Jim Noteware

"So, instead of supply and demand adjusting as a function of lower prices, market activity simply stops." 

Three primary causes can be credited to the current real estate declining: overbuilding, media confusion, and buyer skepticism.

Overbuilding, Overbuilding is the most important factor and also the cause of the other two. Las Vegas exploded in building housing developments, all over, in an unprecedented rate. Very simply we have built too much supply for the level of demand. The builders were in an constant race for, more, bigger, better more attractive projects... they simply popped out like mushrooms over the rainy days. 

A more important question is, perhaps, why did we build so much inventory? The answer is simple and has several elements:

• First, demand was so strong for to long  True, we all believe in the growth story. And even in the face of increasing in-migration (from about 4,000 people per month to about 6,500 per month this decade), we overbuilt even for this increasing level of new population!
• The second reason is the presence of investors in the market.... And the investors showed up at the gates of Vegas in massive numbers... the land of opportunities in 2002-2004. Those investors never really expected to occupy the units they contracted to purchase, just sell them to someone else who would. For a time-a long time, actually-this worked. The investor presence in the market grew with the market.

Combining the RealtyTrac figures with data from the Clark County assessor’s office, the analysis found that 74 percent of all single-family homes in foreclosure during the past six months were owned by investors who did not live in the homes.

"In total disproportion with the real demand we accepted them as part of the actual demand. But now this condition have changed and they all are almost gone accentuating the supply on the downside of the cycle. So, we are now left with this overhang of inventory which has caused downward pressure on prices and longer times that houses remain on the market." says Jim Noteware

Media Confusion,  The national media in particular - are now full of stories about Las Vegas and compare our situation to the gloom and doom of prior recessions.

We must acknowledge that the media have a special place in their heart for Las Vegas. Las Vegas is "Sin City" and much of the Strip's entertainment is based on fantasy... This gave the national press a feeling that the local industry behaved as a roulette wheel, and real estate success was a game of chance instead of the hard work and correct decisions.

The media would argue that they base their reporting on housing's contribution to the economy, including: employment and credit.

• Employment: For the past 10 years, housing became the biggest factor in the local economy because of its direct (construction workers) and indirect (materials and equipment) employment. As housing starts decline, not only do construction workers lose their on-site jobs, but a lot of related business: building appliances and carpets cut workers, too.
• Credit: The media are reporting to the exhaustion stories about how foreclosures are rising in many markets, including, of course, Las Vegas. But, are these foreclosures a housing problem or a credit problem?

Buyer Skepticism, Buyer hesitancy will last until buyers conclude that conditions are turning around once again, and they should not wait because prices are once again increasing. So, far for the moment buyers seems to be stuck in a deep skepticism...

- Alexandra H - (webmaster & writing contributor)

Related terms:  las vegas real estate, las vegas buy real estate, las vegas real estate agent, las vegas buy and sell real eatate, homes for sale in las vegas, las vegas sell real estate, lasvegas real estate, homes for sale in las vegas, summerlin nevada real estate, summerlin, real estate agent las vegas, Las Vegas Condos - Luxury Condos - Las Vegas High Rise Condos, las vegas board of realtors, real estate listings las vegas, agent las vegas real estate, the truth on las vegas real estate, homes for sale in las vegas nv, nevada las vegas new homes, residential real estate listings las vegas, las vegas homes for sale, summerlin real estate, vacation homes in las vegas, henderson homes for sale, Condos - Las Vegas Condominium Sale - Condo in Las Vegas - Las Vegas Luxury High Rise Condos - Condos for Sale - las vegas real estate companies, new homes in las vegas, homes for sale las vegas.