Tuesday, October 05, 2010

Las Vegas Housing Charts

I've been writing about the Las Vegas housing market for years and have even stated for the record (on several occasions) that this market will eventually fall to a level where the median home price is ~ $60SF.

Note: some of my older posts can be found here:

Charts Feb 2010

Charts April 2009

$60SF Prediction - 2008

Las Vegas Economic Downturn Archives (thru 2008)

Las Vegas: A House of Cards - March 2006

Well, rather than trying convince you with additional verbiage that we've yet to hit bottom, I'll let the charts below do the talking - as each chart is worth a thousand words.

A few key points to keep in the back of your head while reviewing the charts however:

- Las Vegas has the highest unemployment rate in the nation
- Las Vegas has the highest bankruptsy rate in the nation
- Las Vegas has the highest foreclosure rate in the nation
- > 80% of Las Vegas homeowners are upside down
- The Homebuyer tax credit has expired
- Banks are holding back tens of thousands of homes
- The Las Vegas economy is completely dependent on a DEAD BUSINESS MODEL - consumer discretionary spending - something that is no longer available to the masses who are desperately trying to keep a job, a roof over their head and food on the table

Bottom line:

The bottom IS NOT IN for Las Vegas and home prices will likely continue to fall for several more years... Though considered a long-shot losing bet at the time, when we take into consideration all the gloomy (current and future) aspects of this city's economy, even my $60SF median price forecast now seems optimistic.


BxCapricorn said...

To begin...I'm not from here, which like everyone else, is the norm in Las Vegas. We're transplants who were either transferred here, found work here, flipped CA real estate profits here, retired here, or gave Vegas a shot after running out of all other options. So that's the playing field. Surprisingly, Clark County has real estate taxes that are laughable to this ex-NYer. The fees are reasonable. Water is surprisingly cheap, as is electricity. Once the unemployment insurance runs out, all of those plumbers, sheet metal workers, masons, carpenters, pipe fitters, and electricians will gather up their remaining stuff, rent a U-haul and head back home, where they can at least grow a garden for food when times get tough. Magically, NV unemployment will evaporate. The Mexicans that migrated here, performing back-breaking manual labor (God bless them, they do unbelievably good work) have and will continue to leave. What will be left, in short, will be new infrastructure and homes, at rock bottom prices, with low taxation. In NV, we don't have the CA legacy of State workers and their huge pensions. We built many casinos, funded with Deutsche Bank money. DB just yesterday issued more shares to raise capital. NV "punked" the largest banks in Europe. Why do you continue to view this as a "we" lose situation? DB funded Echelon, the Cosmopolitan, etc.


Dubai lost their $ with MGM, etc. It's not about nations or locations. It's a World Casino. When will you see that?

tenax_technologies said...
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Anonymous said...

BxCapricorn makes some good points in his/her post. I watch the Las Vegas economy from it's prized, formerly rich neighbor, California. I've always thought Nevada had a good niche going with low taxes for businesses, real property and income and of course the minimally invasive state govt. laws which allow the pure form of gambling but regulate and tax it for the state's coffers. Now though with California struggling for jobs along with the rest of the country, where are the bread and butter slot and blackjack players going to come from? The focus on high rollers produced the luxury joints like The Bellagio, but the super-rich can fly anywhere in the world for a game of Baccarat if Vegas starts looking a little tired. There's also the explosion of Native Indian casinos in California and Internet gaming. It's no secret that the Indian casinos in Calif. have wreaked havoc on the once fabulously profitable clubs at South Tahoe. It's a revenue stream that is rapidly diminishing, Nevada needs to diversify it's economy, exploit another niche, how about mineral wealth? I don't think there's anywhere in the US outside Alaska that has a greater concentration of mineral wealth. As for the infrastructure produced in the housing boom, it's a plus and a minus as infrastructure must be maintained lest it become worthless. I happen to like the Silver State and don't want to see it decline, but you can't own a fleet of Ferraris on a Toyota budget for long. What's happening with the condo sales and visitor traffic at The City? It will be intresting to see that saga unfold in the next few years. Steve Wynn and few others caught the timing just right a couple of decades ago, but times have changed for all of us. I still love Nevada and will always be back to visit...you'll find me at the $5 blackjack table at 4:00AM with the over 40 crowd. Johnny Walker