There is no question that Las Vegas was among the hardest hit real estate markets in the country. There is also little question that it was slow to recover. However, once recovery started, it seemed to explode almost overnight. I live here part time and it seemed that suddenly, the market turned around. There are many theories on why this has happened of course.
As the stories about Las Vegas real estate take on the luster of gold once more, real estate analysts are warning that another bubble is forming in the desert. Homes in the Las Vegas area are once again doubling in value over the course of just a few months, and Las Vegas home prices rose 23 percent year-over-year in May of this year according to the S&P Case-Schiller property value index. The market is “clearly in bubbles,” said index creator Karl Case, warning that “what can go up can down – real quick.” Analysts credit private-equity firms, hedge funds, and real estate investment trusts (REITs) that have been buying up distressed properties to rent with pushing up home values in Vegas and other hardest-hit but now-appreciating areas like Phoenix, Arizona.
Even the president recently weighed in on the Vegas bubble, asking in a weekly radio address that listeners take care not to fall prey to “artificial bubbles” in the housing and financial markets. “We have to turn the page on the bubble-and-bust mentality that created this mess,” he said in the address. He added that a “concentration of wealth at the very top” causes “unstable bubbles that threaten the economy.” He added in an address in Chattanooga, Tennessee that “narrowing the rich-poor gap is my highest priority.” SUPER!!! Great idea!! Punish the hard working and successful and push more onto the public trust!! Fix unemployment and stop printing money would be two nice starts ;)
Paddy Deighan J.D. Ph.D
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