What's Driving The Las Vegas Housing Market?
Darren Blomquist, Vice President, Realtytrac
John Restrepo, Principal of RCG Economics
The Las Vegas housing market is not quite what it was last year. The numbers are still strong, but not as strong as they were. So is this another boom about to go bust? That's much harder to predict but numbers suggest that there is plenty of investor interest in Las Vegas, but there's also plenty of short sales.
Is it a good thing that so many cash buyers in the Las Vegas housing market?
Darren Blomquist, Vice President, Realtytrac: It tells us that (the LV market) is very attractive to these institutional investors that we’re starting to see coming to the market, starting pretty much last year. Also , it’s an enticing market to other types of investors and even home buyers who may have some trouble getting a mortgage, but are willing to pay with cash, given at least, what they view, as the bargain prices.
John Restrepo, Principal of RCG Economics: I think the cash market is starting to cool off a little bit, compared to where it was I think by the end of the year. In the next ten months or so, I think we’re going to see a lot less cash buying activity because prices are getting so high up there at this point. It’s still a cash market, but I don’t think we’re going to see the frenzy as in the last couple of years.
More good news:
Blomquist: Just looking at the numbers we’ve seen, we’ve seen pretty much 22 months of decreasing bank repossessions in Nevada, so it was a little bit surprising to see that number still so high, but I think what’s happening is, the banks are finally clearing out some of the properties that they’ve repossessed in the last few years. I think the good news is this isn’t new distress, this is the clearing out of the distress that happened over the last 5 to 7 years in the market, and that’s going to take some time.
Restrepo: The issue that we have here, we just went through the worst financial crisis in modern times after the Great Depression. It’s going to take a long time to fix this real estate market. This market is one of the leading indicators of this recession. It’s going to take a long time to heal.