When does Las Vegas real estate hit bottom? To answer this I need to discuss a little mathematics. In order to have a bottom, you have to have a graph or curve of one or more dependent variables against an independent variable, in many cases, the independent variable is time (X=t). Thus comes the difficulty, one has to define the dependent variable, in our case “Y=Las Vegas Real Estate”, how do you define this?Las Vegas real estate is compromised of many sectors, Las Vegas land, retail, industrial properties, office and residential real estate. Each of above are further divided among sub products such as H1 (commercial tourist zoning), M1, M2, MD (industrial zonings) general commercial (C1, C2) and so on. Even when you filter to one type of property, location and asking prices differ greatly. So you can see that “Las Vegas or Henderson or North Las Vegas real estate” can’t be quantified accurately. Thus stating that Las Vegas real estate is near the bottom is as silly as saying Las Vegas population is 1,345,678. Any statistician will laugh at that number, as the margin of error prevents anyone from counting the city’s population to the person.
So how do these so called “analysts” decide what Las Vegas real estate is doing? They look at trends and also the various influences on Greater Las Vegas real estate.
So I will discuss the influences on Las Vegas real estate. The number one influence on Las Vegas real estate is foreclosures, and I mean residential foreclosures as well as commercial foreclosures. As for residential foreclosures, which have a more pronounced effect on Las Vegas real estate, Hope for Home Owners Act will decrease future foreclosures and may do away with short sales. But a significant number of Greater Las Vegas homes and condos are owned by investors and this law will have no effect on these. Additionally, it is the first mortgage holder’s choice to agree to refinancing the mortgage or just foreclosing on the home. There are many home owners that have purchased their home with a first and second mortgage, the second mortgage holder has to OK refinancing home owner’s property and they may not be receptive to losing all or most of their money. As you can see no one can predict at this time the rate and absorption of foreclosed homes and condos in the future. I have written about waves of upcoming foreclosures in Las Vegas commercial real estate which will cut prices significantly in about six months.
Another big influence on the Las Vegas real estate market is the credit crunch. Banks have made obtaining a loan much more difficult than a couple of years ago. It is anyone’s guess when this will improve.
National economy affects Las Vegas real estate and chiefly among this is fuel prices. Again no one can say with certainty what the price of gas is going to be in six months or two years from now.
Mortgage rates are still at historical lows and given that long term mortgage rates are a function of global inflation, I believe they will go up, but I don’t believe that any one could say what the mortgage rates are going to in one or two years.
These are just a few samples of various influences on Las Vegas real estate, but you get the idea. My question is how one can define a bottom for a variable that is not accurately defined, can’t be quantified and is a function of many other variables whose future behavior is unknown. These days there are many real estate seminars in Las Vegas that are called Crystal Ball, except that no one has one.
Related web-site pages.
Las Vegas residential real estate market news, Las Vegas commercial real estate market news, Las Vegas Economic News, Las Vegas real estate market statistics report
View this Post in: 
0 responses so far ↓
There are no comments yet...Kick things off by filling out the form below.
You must log in to post a comment.