The current crunch that descended on the Southern Nevada housing market is slowly working on what it is designed to do. It was invited to the valley by stark economic realities that had learned the bazaar had grown overheated and was actually about to spiral out of control. Home prices were zooming, builders were putting up way more houses than was needed and the mortgage money was cheap and accessible to just about anybody.
The crunch watched the frantic housing activity for a stretch and then saw it best to intervene, swooping in to save the day. And its actions are finally starting to produce results.
Home values here have been retreating steadily and are seemingly nearing the bottom. It's one of the three main segments in the overall market that went out of whack. The other two were anemic sales and the excess supply of new and resale houses, or the inventory.
It wasn't too long ago when local homeowners and investors were beginning to wave goodbye to the house that would cost under $100 per square foot. But thanks to the crunch and the sagging demand it brought along, things are changing. Heading in the right direction. Valley builders are nowadays offering about 100 new models in their subdivisions marked under $100 per sq. ft., reports Larry Murphy from SalesTraq. Richmond American for instance lists a 3,839 sq. ft. house at Vienna for $319,990 that comes to about $83 a sq. ft. That's the good old times right there. And something that can be sustained.
As the price levels drop, homes become more affordable again and that puts a smile on the faces of home buyers, refinance candidates and anyone in the industry. Median household incomes in Las Vegas generally had fallen way behind what it took to purchase a standard home and that's one large reason why the bazaar stalled. People simply couldn't afford to acquire property any more. Family incomes and housing prices have to bounce within a certain workable range for ongoing market stability and these two forces are approaching that now, being led by the falling price structure.