Not many people in the real estate industry would be surprised to hear that Las Vegas is struggling as a result of the real estate fallout. But what about its nearby neighbor, Henderson?
Henderson is often twinned with nearby Las Vegas when it comes to real estate. However, area broker/salesman Max Schmidt, who can be found online at www.maxsellsvegas.com, asserts that the city is in better shape than its glitzy neighbor.
“It appears that Henderson has (seen) 21.1 percent less depreciation in the marketplace while having 74.3 less units for sale than Las Vegas, based on total home inventories,” Schmidt says. “Henderson is faring far better than most areas in Las Vegas.”
Boom to Bust
In June 2006, the median sales price for Henderson single-family homes was $315,000, according to the Greater Las Vegas Association of Realtors. Three years later, the median price for single-family homes is $206,636, a 34.5 percent loss in value.
In comparison, the greater Las Vegas market – including Henderson — saw median sales prices for single-family homes hit $315,000. Today, median sales prices for single-family homes are $140,000, a 55.6 percent loss of value since the market topped out.
“If we were to remove Henderson from the greater Las Vegas statistics, the Las Vegas losses would be even greater,” Schmidt says. “The Henderson market lost less value because of its desirability in the marketplace to home owners and investors, and is a more stable market.”
Henderson Realtor Jacqulyn Richey, who can be found online at www.lvrealty.net, notes that Henderson has fewer foreclosures than Las Vegas – but hardly remains unscarred.
“Certain developments in Henderson are fairly hard-hit, such as Lake Las Vegas,” Richey says, adding that tumbling prices in the area means that a condo that sold for $400,000 in 2005 is now selling for less than $100,000. “This is great for buyers wanting golf villas or resort property and are used to paying high association fees. Some planned communities have gone into default, but far fewer than in Las Vegas.”
Schmidt adds that the majority of Henderson real estate was developed before the boom cycle ended in 2006, with the availability of homes built within the last five years a much smaller percentage of the market than those built earlier. “This means that in comparison with Las Vegas in general, it is much harder to find an investment property in pristine condition and most repossessions need additional work to bring them up to rentable standards,” he says, adding that there is also an aged area that was previously a federal arms plant in World War II.
“This area is dotted with 1940’s 750 square-foot cinder-block homes,” he says. “Much of this area is slated for urban renewal, but this will be stifled by the current real estate market conditions.”
Despite the difficulty of finding perfectly maintained investment properties, both Schmidt and Richey say Henderson offers some attractive elements for investors.
“Henderson is a very stable community,” Schmidt says. “It has excellent services and shopping and is considered one of the best shopping areas in all of Las Vegas. Henderson has also done an excellent job of traffic planning … and has an extensive plan for future mass transit system in place to provide for the needs of the community and connection to Las Vegas.”
He adds: “Henderson has a great reputation as a real community, which has helped in holding land values in general values in general higher than in much of the Las Vegas valley. There are fewer repossessions currently in Henderson because the community was built before the real estate bubble fewer properties have been repossessed. Because of its reputation as a desirable place to live with lower crime rates and better shopping and community services Henderson creates a more stable investment market, yielding higher gross incomes on properties and higher market demand for its real estate products.”
Richey says resale value is a top investor attraction, as well as strong local schools. “The community also has several new developments, and more parks per capita than any other city in the state,” he says. “Henderson businesses cater to locals, including the casinos. The city is just a few minutes from Lake Mead, the Las Vegas Strip, and about an hour’s drive from Mount Charleston, which offers skiing, as well.”
She also says good freeway access and plentiful retail and urban development provide investor attractions, though she says downsides include taxes that are slightly higher than Las Vegas, as well as a downtown that is still rundown despite attempts at urban renewal.
Due to a heavy flood of investors now entering the greater Las Vegas market, Schmidt says he does not predict that prices will continue to fall in the under-$250,000 bracket. “We may see an actual increase in units currently priced under $150,000 because of their current undervalue and extreme demand for this project,” he says. “We are currently experiencing multiple bids on properties priced under $150,000, and approximately 35 percent of the sales in the market are cash.”
He believes houses priced between $150,000 and $300,000 will continue to accelerate in demand with an influx of foreign buyers and retirees seeking to buy second homes and retirement residences. However, Schmidt believes there will be an increase in inventory when it comes to the $300,000 to $450,000 price bracket as job losses continue, and Alt-A loan reset higher, accelerating foreclosures. Additionally, he believes homes in the $450,000 or higher price bracket will continue a downward spiral as jumbo loans to purchase the properties are not available at reasonable rates.
Richey warns that buyers seeking short-term investments or universally rock-bottom deals should look elsewhere. “A lot of bargain hunters are showing up with some unrealistic expectations,” she says. “Yes, there are some unbelievable deals here. But not every property for sale will be one. Some areas didn’t suffer too much as far as prices dropping. New investors and first-time buyers also need to understand that because most of the property being sold is bank-owned, the normal rules don’t apply. The sales process takes a lot longer than usual, so be prepared to be patient.”
She offers a rosier picture for the long term: “We’ll see a lot of investors making a killing. Once the economy recovers, the local economy will take off again and prices will go right back up.”
This article has been edited from its original version. The original article quoted Charles Richey, however, the quotes were actually from his wife Jacqulyn, via an email interview forwarded to the author from Charles acting as Jacqulyn’s assistant. In addition Max Schmidt’s legal title is broker/salesman not broker-agent.