The Case-Schiller report for November 2010 shows that Nevada is among eight U.S. cities that hit new lows in house prices since they peaked in 2006 – 2007. The report shows that Las Vegas real estate prices are down 57.2 percent from its high in August 2006.
Las Vegas, Nevada has the rather dubious distinction of being America’s leading city when it comes to foreclosures in 2010. In 2009, a rather stunning 12.1 percent of homes had been served notice. According to RealtyTrac, during the month of December 2010 alone, one in 84 homes in the State of Nevada received a foreclosure filing. There were a total of 74,641 foreclosed homes with an average foreclosure sales price of $133,253. Clarke County, the home of Las Vegas, had the lion’s share of the foreclosure business with 61,944 homes under foreclosure with an average sales price of $129,771. In the month of December 2010 alone, the city of Las Vegas had foreclosure documents filed on one in every 76 homes with 44,072 homes under foreclosure at an average sale price of $127,011. The median price for ALL home sales for the three month period from October to December 2010 was $123,516. This is down from $300,000 five years ago and down from $133,000 last year.
Despite the drop in real estate prices, Las Vegas also has the honour of being one of the worst housing values as ascertained by a North Carolina-based company by the name of Local Market Monitor. Their analysis includes many factors including unemployment and job growth rates and the number of housing permits in the market in conjunction with an assessment of the price cycle in the particular market. Once the impact of market imbalances are removed (i.e. temporary imbalances between the growth of the population in the market and the number of new homes being built) are removed, Local Market Monitor is able to make a prediction of where house prices will be in the next two to three years. In the case of Las Vegas, there are two main issues working against the market; high unemployment and an oversupply of housing. This has led to a drop in the value of Las Vegas homes of 52 percent from their peak three years ago.
Notice how the median price of one bedroom homes is down 40 percent year-over-year? That’s got to hurt…and badly. The same one bedroom homes that sold for $48,000 between October and December of 2010, sold for $144,000 5 years earlier. In the past five years, the median price of all homes has dropped from $300,000 to $123,516; that’s a 58.8 percent drop in price, putting many "homeowners" under water and explaining the huge number of foreclosures.
Now let’s take a look at the employment situation in "Sin City". According to the Bureau of Labor Statistics (BLS), in November 2010
, Las Vegas had the distinction of having the 18th worst employment situation in the United States with the official number of unemployed (U3) standing at 14.3 percent. That puts them in 354th spot out of 372 cities, behind Flint, Michigan (12.5 percent and 333rd spot) and Detroit, Michigan (12.0 percent and 322nd spot). To make things worse, if we were to add the 6 to 7 percent of workers who are working part-time for economic reasons and who are marginally attached to the labour force, Las Vegas would have a U6 unemployment rate of between 20 and 21 percent. It looks like real estate isn’t the only thing suffering in Las Vegas, doesn’t it?
Now let’s take a brief look at some examples of homes for sale in Las Vegas. As an aside, if you do a Google search on Las Vegas foreclosures, the search counter showed 1,550,000 results. I just used the Realtor.com website for my research.
Here’s a bank-owned three bedroom, two bathroom 1180 square foot home located at 633 N 22nd Street
. I apologize as there are no photos of the house available today, however, in the past there were a number of interior and exterior shots. I included the house in this posting to show readers that houses actually do sell well above the asking price, albeit well below the historical price. The house was listed at $19,900 and was assessed at $12,840 in 2010 with property taxes of $422. It actually sold on January 3rd, 2011 for $30,500. This is down from an assessment of $41,213 in 2008 and property taxes of $936. According to the property history, prior to this year’s sale, the house was last sold on August 5th, 2003 for $125,000. That’s nearly a 75 percent drop in value. There is no doubt that the place needs a lot of work, unless of course you don’t mind spray painted graffiti and boards on the windows. What is rather amazing is seeing how much the value of the house has dropped in just over 7 years.
Here’s another three bedroom, two bath bungalow located at 2237 Brendan Lane
that has an asking price of $23,000 (with a contingent offer).
From the exterior photos, it looks well kept and appears to be lived-in. If you look through the rest of the photos, I’m confused as to whether or not the canyon, hospital and ferris wheel are included in the price or if the realtor just wanted to submit his favourite photos. This home last sold on March 31st, 2005 for $105,000 and once again, the property tax assessments have dropped from $28,200 in 2008 to $13,760 in 2010.
Here’s one last foreclosure located at 4895 East California Avenue
. The asking price for this rather small 2 bedroom, 2 bath bungalow is $25,000.
From the photos of the interior, it looks like it needs a helping hand, most particularly in the bathroom. What is amazing about the price history of this bungalow is that it last sold on October 10th, 2006 for an amazing $200,000. The asking price is an astonishing 87.5 percent below its last selling price! Once again, the property tax assessment has dropped from $50,573 in 2008 to $16,322 in 2010.
For a few laughs, let’s just take a quick look at the opposite end of the spectrum and see how the other half lives. Should you happen to have slightly over $37 million lying around looking for somewhere to go, this is the place. Located at 7030 Tomiyasu Lane
, this 73,000 square foot mansion is located on an 11.17 acre estate.
Just in case you have a large family or a lot of friends (and you most certainly will have friends that you didn’t know you had if you buy this place!), there are 18 bedrooms and 27 bathrooms. It is surrounded by a 10 foot high stone wall to keep out the unwashed masses, has separate guest houses and staff quarters, a stable, tennis courts, discotheque nightclub and his and hers spas. This is such an elite listing that it even comes with its own tour video. Now you’ll really own something worth bragging about. A note of caution though, unfortunately in 2010, the property taxes were $157,310 but I guess if you have to ask about the taxes, you can’t afford to buy!
I hope you enjoyed your little tour of the most distressed real estate market in the United States. It will most likely take the better part of a decade before the real estate market in Las Vegas returns to historical prices. Apparently, in the end, it’s not all about living where it never snows! As well, from the listings that I looked through, it looks like there is even further proof of just how polarized American society is becoming. The have-nots have nothing while the haves play on their tennis courts and spend their evenings in their own private discotheques.
Click HERE to read more of Glen Asher’s columns.