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.