Why investing in Las Vegas real estate is one of the best real estate investment opportunities in the United States?
1: Because Las Vegas housing market has over corrected and is undervalued (according to Case Shiiler) by at least 25%
2: Double digit cash on cash return is possible on one of the safest investment opportunities in today’s economy
3: Las Vegas economy has passed the bottom and is rebounding
Here is the proof;
The following graph shows the Case-Shiller Housing Price Index from January 1987 to December 2010.
The Case Shiller graph shows the median price for homes sold in Las Vegas and compares it with a ten city composite of other major cities in the United States which is shown by dotted lines. The flat line which closely followed real pricing for Las Vegas homes up to 2002 is the median price of homes if the housing bubble and following crash did not happen.
As you can see the Las Vegas housing prices matched or were higher than the 10 city composite until 2007. Both peaked at about $225,000 in 2007. However the 10 city composite median price has fallen to about $150K which is a 36% decline from the peak values.
Las Vegas median home prices have fallen to about $100K and this represents a 56% drop from peak values. Additionally, had things progressed normally (the only thing that we ain’t got in Vegas is normal) the median prices would have been at $130K. The $30k discrepancy represents OVER CORRECTION which results in Las Vegas housing prices to be undervalued by about 30%.
Now you understand why Las Vegas real estate in general and housing in particular are such a great investment opportunity.
This is the reason that real estate investors worldwide are investing in Las Vegas housing, more than 50% of Las Vegas homes are sold to cash investors.
Conclusion: Case Shiller graph shows why Las Vegas is one of the best bets for investing in United States real estate. Since the Las Vegas housing market has over corrected it is less susceptible than the 10 city composite and cash flow is better.
I have mentioned Larry Murphy’s name as the only Las Vegas real estate analyst whom I truly respect and the following was in his last e-mail.
“If you want to look like a genius in 5 years from now, buy all the Las Vegas real estate you can buy today”.
I couldn’t agree more, but not all real estate, or for that matter homes or condos, are the same. For example cash flow for a $300K home may not be as good as cash flow for a $125K home, however a flipper may make better margins by buying the more expensive home.
You need a Las Vegas real estate agent who can tell an investor what he/she should invest in and why and all you have to do to find one is to call Masoud at 702-478-7800.