This is another excellent guest post from one of my Realtor pals, Diane Tonnesen. Let's see how Las Vegas (my favorite place to go) is doing in the real estate industry now that the crash is nearly over!
LAS VEGAS LEADS REAL ESTATE RECOVERY IN 2012
2012 was a good year for the real estate industry, which demonstrated signs of a true recovery in progress. Housing prices across the country rose about 11% overall this past year as inventories of available housing shrank dramatically from the historic highs of 2010. New home starts were also up significantly, indicating there is faith in the recovery process. Builders are banking on the fact that primary homeowners, in fierce competition with cash investors for the limited resale market, have gotten so frustrated that they are willing to spend more for a new home just to make a purchase.
The only good news for homebuyers is that the prices were SO distressed prior to 2012, that the resale cost of a single family home is still more than 24% below replacement value. Investors are actively pursuing rental property purchases in Vegas because the return on investment (ROI) is so attractive even with recent price increases. It is still possible to achieve a 10% to 14% cap rate with the minimum 20% down on investor financing.
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