BluefoxToday blog : Las Vegas real estate now undervalued says national report

Las Vegas real estate now undervalued says national report

Homeowners across Southern Nevada know that their properties have lost quite a bit of value during this incredible mortgage and housing meltdown. It's a somber feeling to first watch the equity in a home shrink down to nothing and then to make matters worse in many cases the spiral has continued on down to create an upside down situation. That surely isn't what home ownership usually means. So, in the big scheme of things, how low have the prices dropped in town?

An intriguing report was just published by IHS Global Insight, a forecasting shop, and National City Corp., titled House Prices in America. The researchers wanted to arrive at historically normal values and to get there they studied median prices from 2000, interest rates, household incomes and population density.

According to their findings Las Vegas was undervalued by 18.8% in the third quarter. In the first quarter the same index came in at negative 3.1% but that wasn't quite enough to trigger the dreaded undervalued label. A value decrease of over 14% will do it, though. The report looked at 330 areas nationwide and Las Vegas was shoved way down to spot 287. Still, it actually means that there are a host of markets that are doing worse than Sin City once considered the flag bearer of the crash.

From a buyer's perspective this is welcome news. Great news, really. Median resale prices, currently at $184,000, are now somewhere around pre-boom levels that makes them affordable again to the average buyer and that's what is needed to shake the market off its agonizing coma. This could be the bottom as far as value decline is concerned, the famous correction having obviously done what it's supposed to do. Overall, there remains volatility in the mix, especially in the mortgage sector, that can delay anything resembling a cautious recovery.    

 

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Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst 

www.BluefoxToday.com - syndicated mortgage, housing and property management blog

eskokiuru@gmail.com
My cell: 702-499-1006

Comment balloon 12 commentsEsko Kiuru • December 11 2008 10:44PM

Comments

The current round of price decrease is pretty much driven by consumer inconfidence. So it might be true. The truth will need further due diligence analysis though. I usually do not just listen to some so-called experts.

Posted by real estate real estate almost 10 years ago

Further proof that we are poised for a recovery here in Las Vegas.  Possibly a creeping recovery, but a recovery none the less.

Posted by Stephen Butler (RE/MAX CENTRAL - Las Vegas) almost 10 years ago

we are seeing the a similar trend here in Central Florida. Buyers are starting to see tremendous value in homes and home sales are up over last years numbers.

Posted by Steve Glose, TRC, CIPS, 407-616-7286, Orlando Real Estate, Orla (Keller Williams Classic Group) almost 10 years ago

Bend Oregon is showing as one of the top overvaluded areas - makes our market even tougher - just 2 years ago Donald Trump said buy in Bend now we are in trouble - go figure

Posted by Thesa Chambers, Principal Broker - Licensed in Oregon (Fred Real Estate Group) almost 10 years ago

Esko, doldrums have been keeping us down. I am expecting that 2009 will be a banner year. Now, the question is what goes on that banner???

Posted by Fred Chamberlin, Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant (Guild Mortgage Co - Oak Harbor WA) almost 10 years ago

Esko, I guess that any time that you are not near the bottom of a catagory like this that it is good news.  Hey look for the silver lining when ever you can :)

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 10 years ago

Huiting,

Real estate prices certainly have come down quite a bit here in the last year or two.

Posted by Esko Kiuru almost 10 years ago

Stephen,

A good point to start a recovery from.

Posted by Esko Kiuru almost 10 years ago

Steve,

Once buyers see good value out there they'll come off the fence and start writing offers.

Posted by Esko Kiuru almost 10 years ago

Thesa,

Vegas then is in the opposite end of the market curve from yours.

Posted by Esko Kiuru almost 10 years ago

Fred,

We are cautiously optimistic about 2009 down here.

Posted by Esko Kiuru almost 10 years ago

George,

Looks like Vegas is a bit better off now than some other markets, for a change.

Posted by Esko Kiuru almost 10 years ago

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