During the nadir of the U.S. housing crisis Las Vegas represented the worst of worst-case scenarios as the state’s market bottomed out, but now thanks to domestic and foreign investment the area has seen a complete turnaround. Experts say things have improved so much, and property prices have risen so high, that investment interest is starting to cool. Average median home value rose 2.8% for the year ending in August, according to surveys conducted by Zillow. Rental rates have also slowed, although they are still on the rise despite many would-be rental homes remaining vacant. For more on this continue reading the following article from Global Property Guide.
At the height of the Global Financial Crisis, Las Vegas was ground zero for the U.S. housing bust. Wealthy foreign and out-of-state investors then started buying cheap houses as much and as fast as they could, often in cash and with sight unseen, to convert into rentals. This bulk-buying spree led to a turnaround in the state economy.
Now however the value of Las Vegas homes is outpacing the rest of the country. And most investors have begun to look elsewhere.
Las Vegas median home value as of August was $156,600, according to Zillow, up 2.8% from July, and up 30.6% from August 2012. In contrast national home values in the U.S. rose by only 0.4% from July, and by 6.6% from August last year.
Stan Humphries, Zillow’s chief economist, notes, “We are already beginning to see moderation in the monthly pace of home value appreciation, which will be good for the market overall and in the long term.”
Aside from rising house prices, the Las Vegas rental market has been tapering off due to increasing inventory. According to Zillow, while the average national rent increased 0.5% from July to August, the month-on-month increase for Las Vegas rents was only 0.3%. The national average rent went up 1.9% year-on-year, while the average rent in Las Vegas rose only 0.9%.
Reportedly, many rental homes in the valley are still vacant.
A year ago at least 50 institutional investors were buying houses in Las Vegas, says Steve Hawks, an agent for Platinum Real Estate. Now, he says, there are only three main buyers in the area.
That however will not mean that the big investors will entirely forget Las Vegas. Hawks added, “As soon as the prices drop again, they’ll start buying again.”
This article was republished with permission from Global Property Guide.