I'M A LITTLE CONCERNED ABOUT THE LAS VEGAS REAL ESTATE MARKET.
A stable and sustainable Vegas real estate market is one with appreciation anywhere between 7-12%. I know that seems high compared to a Detroit or Baltimore, but for us that's a good market. And according to our local association and other market statistic gathering groups, we're right smack in the middle of that healthy range. I'm not doing the happy dance that I was a few months ago, however because I see some very disturbing trends inside the numbers. I will help you see them too.
GLVAR says the valley's property values are up 7.9% from a year ago [published 3/10/15]. The Review Journal, quoting SalesTraq on March 12 reported 10% appreciation, while showing the appreciation map below. If you take a quick look at that map, a 10% appreciation number should surprise you because you're looking at tons of 18%'s, 14%'s 16.5%'s and other high numbers by zip code.
It's not until you discard the "big picture" and look deep into the map, sorting by general socio-economic levels, that you begin to see what is scaring me.
Those of us who've been around awhile remember the invincible days in the long run-up to the devastating crash of 2007-8. We thought we couldn't lose back then, we actually found ways to justify a sustainable 25-30% appreciation rate. BOY, WERE WE FOOLS!!
Maybe I'm suffering a form of real estate PTSD, but when I put together the middle and working class general zip codes, I'm seeing appreciation rates that look very much like the wave we rode in 2005. I'm concerned.
The average appreciation for the outer-ring neighborhoods, where much of my property management inventory is, is a whopping 18.2%. While that's great for many of my clients who are keeping me busy selling their investment properties, I would prefer to be a bit less busy and not risk another market "heart attack" in the next few years.
Yes, 18.2 is not the 30% we saw before the market melt-down, but it's still not sustainable. We've already seen a dramatic change in the market buyers, from investors to owner-occupants, indicating that the investing community has lost faith in the Las Vegas. I get a chilling sense of deja vu, even as I write this!
Take a look at the other picture associated with this analysis. It's the raw data breakdown of appreciation rates by zip code, over the past 13 years. Note how similar today's numbers are to those of 2005, yet the OTHER pundits are saying we are experiencing a steady and sustainable market. The truth is we are seeing a stagnant top and bottom of the market, covering up an explosion in property values in the middle of the market. This could spell big trouble in the future, if it doesn't slow down soon.
If you want a Realtor who can see the truth and isn't afraid to share it with you if it's less than perfect, my family team is your best choice! Real estate is a business and you need to be represented by knowledgeable, intelligent, creative and serious business people. We might not wear penny-loafers and ties (anymore), but we take our business and representation very seriously! We're proud of the almost 100 years of service our family has been providing clients and are armed with knowledge and experience virtually unmatched in the industry today!
Let us help you achieve your Las Vegas area real estate goals, you'll be happy you did!