VEGAS REAL ESTATE, A SUCCESS STORY OR ON THE EDGE?

Feb. 6, 2021

Rob Lauer Political Reporter

If history has taught us anything, it’s that no real estate market goes straight up forever without some sort of correction. Las Vegas Real Estate prices have soared, nearly doubling over the past 5 years.

The median home price in Vegas, according to Redfin, is $315K, up 13.3% year over year. Sales volume soared last year in the middle of a pandemic with 2,195 sales, up 9.2%.

According to Real Estate Broker, Carla Redmond, who has specialized in high-end home sales in Vegas for the past 20 years, not all the sales are coming from California escapees. Many locals are cashing out their equity and trading up while interest rates are historically low. Her buyers are mostly all cash or 30% cash down buyers. She noted that even vacant lots are being bid up and fought over in high end neighborhoods like The Ridges. The equity created by the sharp rise in real estate prices is contributing to the increase in home sales in the valley as well.

But is it a bubble like in 2008? Not according to the immediate past President of Greater Las Vegas Association of Realtors, and broker, Tom Blanchard. Blanchard said, unlike in the 2008 collapse which was caused by fraudulent loans made to folks who could never repay their mortgages, this run up has cash buyers fueling it along with solid loans.

There are stated loans offered by banks today, but with 30% down at a much higher rate than the 1.9% prime rate.

If you’re a banker would you make a home loan to a Casino Employee today? The Blackjack dealer with 20 years of experience just became a high risk borrower. After all, due to the pandemic, Casinos are still struggling with a 25% lid on their occupancy. Casino layoffs are still a looming threat to the local economy.

The median priced home market is steady because of low inventory. But the inventory is low because of the foreclosure moratorium, according to 25 year Las Vegas real estate agent, Cindy Lake. Lake, who focuses on median priced homes, says “the eviction and foreclosure moratoriums are creating a huge potential collapse if not addressed by more government help. The same government who created this potential real estate crisis with CV19 lock downs and moratoriums will be needed to rescue the real estate market from an all out collapse.” Tens of thousands of landlords and homeowners haven’t paid their mortgages. What happens when the hamster wheel stops and the bill comes due?

Neither Sisolak nor Pres. Biden has provided any guidance for the real estate industry or banks with the moratorium ending in March. We could only find one bill draft from Nevada State Sen. James Ohrenschall that even addresses foreclosures.

Another real threat to the Vegas real estate market are tax hikes and more Cali style government regulations from the authoritarians in Carson City. Ironically, fleeing Cali rich business owners continue voting here in Nevada for the Socialist Democrats.