I had a thought today about the Las Vegas real estate market. At times, we can be so close to something that we cannot see it for what it is – if you were standing in Godzilla’s footprint would you know it?
This is a metaphor for the many odd and conflicting commentaries I am reading daily about the Las Vegas real estate market.
Fervent arguments are offered that the Las Vegas real estate bubble is about to burst again, or that inventory is about to grow big again due to pent-up foreclosures, or that we have reached a pricing apex and prices will dive, or that prices are about to explode upward.
If the boom-and-then-bust years of the Las Vegas housing market did anything positive, it was to bring the possibility of market stability into play. Booms and busts are essentially caused by the market mistakes of major players in the market. Las Vegas home-builderswho would have overpaid for land 7 or 8 years ago won’t make that mistake any time soon. Mortgage lenders and appraisers are much tighter on criteria. Sellers are more patient.
Overall, though, what the local insiders and skeptics cannot seem to ‘see’ is this group of favorable local conditions:
- resale prices are still well below replacement costs, and expected future replacement costs
- there are no huge inventory swings expected one way or the other
- market players are buying and selling more shrewdly and wisely
- Las Vegas housing is still relatively cheap nationwide and significantly cheaper when compared to other major signature cities
- the Las Vegas cost-of-living and tax burdens are comparatively low
- traffic problems are relatively non-existent
- our prime industry is healthy, re-tooled, re-structured and well-positioned, and positive new business announcements come out weekly
This does NOT mean that I have confident in national fiscal or monetary policy – I don’t, and if these external factors take us down they’ll be taking everything down. So, aside from those potential issues, there is reason to be confident about the Las Vegas real estate and housing market.
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