Las Vegas homes for sale are undervalued by 18%. The IHS Global Insight’s quarterly report that has been vastly reproduced stated this.
IHS Global’s analysts correlates historical data and past price corrections dating back to 1985 in order to determine what home prices should be if they behaved the way they have in the past.
The fact that Las Vegas homes have been declared undervalued based on historical standards is good news for prospective homebuyers who worry about buying in a declining market. However, we are in uncharted economic waters and it is hard to predict where the home prices may actually be headed.
This report measures the affordability of houses and does not directly consider factors that may send prices in a given market down further. Predicting where the future Las Vegas home prices may be heading involves many unknowns, such as the credit crunch, rising unemployment, shrinking homeowner equity, future number of foreclosures and the banks ineptitude in selling foreclosure (REO) real estate.
Las Vegas homes and condos are selling at fire sale prices which will be impossible to match if the house has to be built from scratch. Although a few new home builders have reduced the new home prices in Las Vegas to less than $100 per square foot I was surprised to learn that Richmond Homes and other home builders have recently advertised new homes for about $75 per square foot in Providence, which is a Northwest Las Vegas master planned community.
What is the hard bottom for Las Vegas homes prices that are priced less than $300,000?
The hard bottom should have been here already except for that fact that the banks decide the price points in Las Vegas home and condominium market and they are stupid. I have seen deal after deal get rejected by the banks only to have the home or condo re-listed at 10%-30% less than the original good offer within a month.
We are in a world where “rates on 30-year Treasury bonds have dipped to a record low as investors look for a safe place to park their money. Yields on shorter-term Treasury bills even dipped into negative territory for a time last week.”
Las Vegas homes and condominiums as an investment can provide investors with positive cash flow. When Investors in Las Vegas homes or condominiums are able to make positive cash flow and when the cash flow reaches 8%-10% range, then that is the bottom. Where else can an investor gain such a return on their investment with very little risk?
Related web site links: buying Las Vegas condominiums for sale, Las Vegas home and condo market news
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