Las Vegas real estate market highly overvalued!
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Las Vegas real estate market highly overvalued!


Las Vegas real estate market highly overvalued
In this video, we will discuss the great price gains in the Las Vegas real estate market
in the first 5 months of 2018 and then point out the fatal error in Fitch Rating report
which claims that home prices are overvalued by 21.3% here. Las Vegas real estate market for single family
homes This graph shows the active listing inventory
of single-family homes from May 2016 to May 2018. Up to October 2016, the active listing inventory
hovered around 9500 listings. Then within 4 months, it dropped to less than
8,000. By January 2018 it further dropped to about
5500 listing before a nominal increase to 5700 listings in the last 2 months. While the listing inventory of single-family
houses dropped by 41% in the last 2 years, demand has increased and sales have been increasing
in the last 4 years and in 2017, 34,317 homes sold in Las Vegas. The best way to work in both active listing
inventories and unit sales is months of listing inventory. While the months of listing inventory hovered
around 3-4 months prior to last year, it dropped to two months and has been dropping to less
than 2 months since March 2018. The laws of supply and demand always rule
supreme, 3 months’ worth of listing inventory results in a seller’s market and two months
of listing inventory results in a strong seller’s market and this trend is not reversed until
we reach 5-6 months of listing inventory. And there are no signs of that happening at
the present time. Significant increase in the median price of
single-family houses As we stated, the median price of Las Vegas
homes is at $295,000 in May 2018. This is 18% higher than the same 18 months
ago and 10.1% higher than January 2018. Las Vegas real estate market for townhomes
The months of listing inventory for townhomes has dropped to less than 2 months and in the
last 3 months, it has hovered around 1.5 months. At the end of May, the median price of Las
Vegas townhomes is at $201,750 which is 15.3% higher than 18 months ago and 9.1% since January
2018. Las Vegas real estate market for condos
The months of listing inventory for condos have been hovering around 2 months which results
in higher pricing. At the end of May 2018, the median price of
Las Vegas condos is at $138,000, which is 22.7% higher than the beginning of 2017 and
6.2% higher than January 2018. The median price of high-rise condos is up
by 8.5% since the start of the year as well. As you can see the median price gains for
residential real estate are significant. However, we have finished every Las Vegas
housing market report by saying that these price appreciations are due to severely low
listing inventories and not organic. Additionally, price hikes will continue until
we get far more active listing than we do now. The way Fitch Ratings do their calculations
is they look at the economic improvements in the local market and then compare it to
the home price gains in the same period of time. For example, they wrote that nominal income,
population, and rental rate growth have been in 2.06%-2.46% range but home prices have
gone up at 11%. The deal with mathematical equations is that
your initial assumptions affect the outcome and bad assumptions lead to totally wrong
results, even if the math is sound. The fatal error in this report is that they
have not taken into account where we came from after the great recession when home prices
were far below their true market value. In May 2002, before the great run up of home
prices, the median price of single homes was $163,500 while the same in 2011 stood at $118,000. But forget all of the fluctuations and take
the $163,500 median price in 2002 and 3.5%-4.5% appreciation rates which are considered normal
for the next 16 years. If we had a 3.5% median price appreciation
rate for single-family houses, the current median price would be at $283,500, at 4% it
would be $306,200 and at 4.5% it would have been at $330,650. The median price of single-family houses in
May 2018 stands at $295,000 which is less than 4% annual appreciation per year. And yet they say Las Vegas housing market
is in a bubble, no it is not. This is the reason that newspaper reporters
should avoid writing articles that involve math. Now, say that this Fitch Rating report was
totally right, then there should be a mechanism for prices to come down, and the only way
would be either increasing supply or less demand and there is no signs of either one. Lastly, in January 2011 the median price of
single-family houses stood at $118,000, the same in January 2013 was $150,000, for 27%
home price appreciation, while the local economy didn’t improve by double-digit rates. So, per Fitch Ratings we were highly overpriced
back then, and see what happened, the current median price is about double of what it was
back then, do we need to say more? If you find the information in “Las Vegas
real estate market highly overvalued” enlightening, please like and share it. We spend a great deal of time on researching
the Las Vegas housing market in addition to how to get the best possible deals in any
kind of market and would love to have your business. Given that we refuse to monetize our videos,
we can’t put a link for the website which has tons of great information on the video,
however, we do have a link for the blog post with the embedded video and video transcript
as well as a contact link in the video description. Please make sure to visit our website and
contact us with any questions. If you want to buy or invest in Las Vegas
homes, condos or town-homes, please call us at 702-478-7800. On behalf of Saber Team, this is Karen Saberzadeh
of Realty One Group and www.lasvegas4us.com wishing you a great day.

5 thoughts on “Las Vegas real estate market highly overvalued!

  1. The median price of Las Vegas homes, condos, townhomes and high-rise condos are appreciating by more than 1% per month since the beginning of 2018.
    Yet a very silly article by Fitch Ratings that was published by Forbes magazine called Las Vegas housing market the most overvalued in the United States and said that it is overvalued by 21.3%.
    Then many articles discussing Las Vegas housing market bubble followed along with e-mails from buyers asking us when the market correction arrive.
    In this video, we point out a fatal error in this article which makes it worthless and announce that we do not know when a correction will arrive since the pre-requisites are nowhere to be found.

  2. Brilliant video . i watch a lot of videos posted by local brokers/sales people NO ONE is coming near to the research , knowledge and most important honesty ! . i am a broker in nyc for the last 30 years and can easily tell a hype from realty – you guys rock !!

  3. This is definitely a really good video. your content is very good! I most certainly will be viewing the rest of your videos soon!

  4. One needs only to peruse data on the falling water levels in Lake Mead and Lake Powell to realize that these homes won't be worth the paper that the deeds are written on in just a year or two. People, before you buy, READ the history of Lake Mead and Vegas's dependence on it.

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