I heard this same comment twice this week from two different potential Las Vegas real estate buyers:

We’ve been reading in the paper that real estate prices are going to continue to decline for the rest of the year.

In case you have not noticed, there is continued gloom and doom in the overall media concerning real estate but something big has changed for our market. Last year it was all about the Las Vegas real estate market, Miami and California. Today it’s just real estate in general. Areas that thought they were safe because they never had the big appreciation rates are now finding out otherwise. Those same loans that pumped up outrageous appreciation rates in HIGHLY DESIRABLE areas such as Las Vegas were also used all across the country. The difference is, when you get in cities such as Chicago, Houston or Dallas, new home builders just keep on building away with the vast amounts of land that is buildable which increases the total amount of inventory - which keeps prices and appreciation in check. 

Something you need to keep in mind and what’s certainly different then this time last year - Las Vegas real estate prices have already dropped significantly. Most notably in November of 2007 and January of 2008 when Banks started getting rid of their inventory. Now, this is really important to understand since many of the media reports and opinions are coming from the following source.

When you read about statistics taken from sources such as the S&P/Case-Schiller Home Price Indices you need to know where the information is coming from and what time period. It clearly states this key factor with this quote from the home page:

The S&P/Case-Shiller Home Price Indices are calculated monthly and published with a two month lag.

In other words, the latest gloom and doom real estate articles coming out the last week of March are reporting on January’s numbers and predicting that real estate prices are going to continue to decline.  I’ve got news for you, you don’t have to wait until the last week of June to find out what the prices are today — you just need to ask a competant real estate agent that has a broad understanding of finance, development and what causes real estate prices to go up or down to begin with.

In other words, it’s pretty easy to predict today that real estate prices are going to go down from January’s numbers when they’ve already gone down from January’s numbers. (Did that make any Sense?)

I can’t speak for other real estate markets but I can for Las Vegas and you are going to have to follow and read these links to see what is going on today.

Back on February 5th, I wrote about a fantastic deal that a buyer lost because they waited too long to make a decision and you can read it here -> Las Vegas Real Estate shows a significant Increase and more specifically, this quote:

Properties currently in Escrow or Pending as listed on the Las Vegas MLS for 2/5/2008:

2,793 residential properties listed as “Contingent” or “Pending” and here is a further breakdown:

Single Family Homes – 2,401
Condos/Town homes – 380
Manufactured Homes – 12

Now, read this post about Las Vegas New Homes Builders dropping their prices in the weekend blowout specials to get rid of their standing inventory and the success they had when they dropped prices. Many builders have made these price cuts permanent and are offering some really good deals on their standing inventory. In the past week, I’ve noticed some significant changes in the Las Vegas new homes sales offices — real estate buyers are actually in them and I’m seeing New Home sales agents actually writing contracts!

Earlier, I quoted the Las Vegas MLS numbers of resale homes that were in contract and gave the numbers for February 5th, 2008. Here are the numbers for April 6th, 2008:

(Drum Roll Please…)

According to the Las Vegas MLS for areas 101 through 606 (the exact same areas reported on 2/05/08)

Properties currently in Escrow in a Contingent or Pending Status: 4,879

A further Break Down:

Single Family Homes = 4,316
Condominiums/Townhomes = 555
Manufactured Homes = 8

I really hope you noticed that it’s quite a significant increase from February 5th, 2008. You can also obviously tell that single family homes in Las Vegas are the obvious choice for buyers. Keep in mind that this does not include all of the Las Vegas new home sales going on. Our latest updates on the hottest new Las Vegas homes we are keeping a focus on showed quite a significant reduction in standing inventory from the last check.

After the significant price drops in January, I noticed the multiple offers coming in on properties and I mentioned it in one of the above posts. In other words, it certainly appears that in late January/early February that the bottom for Las Vegas real estate prices were found.

Now – Real Estate 101. Real Estate prices go down when nobody is buying. Real Estate prices stabilize and even go up when people are buying. For Las Vegas real estate, I think the numbers I’ve provided show you what is going on today. January is over along with February and March. Relying on yesterday’s news being reported in the media is the equivalent to rushing out and buying when the media was reporting on how much real estate prices were going up and how much money speculators were making in real estate. We all know what happened afterwards. In other words… don’t rely on yesterday’s news because it could cost you money.

As always, leave a comment or you can use the information below to contact me directly.

Paul Francis, ABR,CRS
Coldwell Banker Premier
Las Vegas Real Estate
702.592.3058

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