Life in Paradise: Would you like to live here?

Or Summerlin, or Downtown Las Vegas, or Henderson, or North Las Vegas? Then you should know that the time might never be better to buy a home in the Valley of Las Vegas. Normally I don’t mix my real estate life with my writing life, but this article fits both worlds too well for me not to publish it. Here’s the story.

A mainstay of the Nevada economy, gamblers in Paradise!
Photo by Steve Fey

The entire Las Vegas area and Paradise in particular, depends very heavily on tourism. Nevada has no personal income tax, which is attractive to many people. But Nevada has the same expenses as any place, whether it’s transportation, law enforcement, property zoning, education or whatever a government might get into. Historically, Nevada has relied on a 6.5 percent gaming tax to make up for the lack of income tax. That’s right: if you lose a hundred bucks at a strip casino, $6.50 goes into the government’s general fund. This is a wonderful thing because first, any local contributing to the government in that way is doing so voluntarily and second, most of the money collected comes from people from somewhere else, who Las Vegas has always managed to make feel good even after they’ve lost their money. Such a deal for Nevada, isn’t it?

Until the current recession, that is. Nobody in Nevada seems to remember getting hit this hard by an economic downturn before. That may be because we in Las Vegas helped set this one off. You may remember the shows that talked about “the red hot Vegas real estate market?” It sure was red hot, and no mistake. So red hot that it melted down in a big way, along with real estate markets in Florida and Arizona. Between those three states, a tremendous amount of money got lost almost overnight. With all that money suddenly missing, and along with other contributing factors, the whole country, and a lot of the world, slid into a recession. In Las Vegas we suddenly found that people from around the world didn’t have or couldn’t spend the money to visit Vegas. Those who did visit didn’t gamble as much. Suddenly the booming construction market in Vegas virtually stopped. Not a lot of demand for ten thousand new hotel rooms when nobody’s staying in the ones you already have, is there? It is the low rate of construction, giving us an unemployment rate that has been around 13 percent recently, that has caused so many in Las Vegas to default on mortgages, to seek relief from Federal and State programs, and to sell many properties short.

From high-end to modest, prices in Las Vegas are a bargain.
From high-end to modest, prices in Las Vegas are a bargain.
Photo by Tami Cowden

A short sale is when a property sells for less than the value of the mortgage. New rules as of April 5th make it a lot easier to do this, so more and more homeowners in Vegas are choosing this route. That fact, along with the thousands of properties held by banks but unsold in Las Vegas, makes this a wonderful time to buy property in Vegas if you have resources to do so. A CNN report recently named Las Vegas as being 41% undervalued. That is, the average price for real estate in Las Vegas is 41% less than the property would be worth in a “fair” market situation. Okay, nobody knows what a “fair” market really is, but there are some things that I can fairly say about Las Vegas.

First, this is not a time to get rich quick on real estate in Vegas. You might find something to buy, fix, and flip, but you won’t make a lot of money doing it. However, if you want to invest long term, or find a place to live in for years to come, there are some great bargains around. Third, the prices will not be rising much immediately. As of April 9th at 9:55 AM PDT, there were 18,405 single-family residences for sale in Southern Nevada. From March 9th through April 8th, 3035 such properties sold in the same area. That gives us a six-month supply of single-family residences even if no more come on the market. Fourth, however, consider what Warren Buffet wrote in his annual letter to shareholders of Berkshire-Hathaway: “Within a year or so, residential housing problems should largely be behind us.” Already there are signs of renewed tourism activity along the Strip. As the nation recovers, Paradise and the rest of Las Vegas will follow along. If Buffet is right, then within a year construction will be re-starting around here, and the housing bargains we have now will be disappearing.

Welcome to Las Vegas
Can you hear it?
Photo by Steve Fey

So, if you’re at all inclined to get into real estate in Las Vegas, as a long term investment or as a home, this is arguably the time to do it. I’d be thrilled if you contacted me for more information. Even if it’s not me, you really should contact a Southern Nevada Realtor to get in on the bargains while they last. Hey, Paradise is calling!


3 responses on “Life in Paradise: Would you like to live here?

  1. I completely agree, Steve. This has got to be the best possible time to invest in Las Vegas. Paradise (and all the other parts of the valley) is within your grasp!

  2. Hi Steve:

    Husband and I, currently in the Chicago area, have been greatly affected by the economic downturn. At ages 48 and 52, we have both returned to college and will have our degrees and certifications for teaching within the next 15 months. We plan to vist Henderson in the spring of 2011 and purchase a modest home as cash buyers. We are leaving behind 5 children and 1 grand daughter that we hope will visit us over the years. I have an older sister who is in Henderson and left Chgo about 4 years ago. Her condo, where she still struggles to reside, is an interest only and she doesnt know how much longer she can hold on to it…

    I hope that when we are actually ready to move, in 2 plus years, the need for teachers will allow us to get the jobs we will need to maintain our life in Las Vegas. Knowing that our future home, will be free in clear is such a relief as we head into the sunset years of our life together…

    Do you have a projection regarding the future of jobs in education for Las Vegas? Minus the crystal ball….

  3. Hi. This is me. My Gravitar only works sporadically, but it’s really me.

    In two years, it will be different around here. That much is certain. I’ve written on and Retiring to Vegas and my own personal blog at about the economy in Las Vegas. Check them all out if you want to read more of my opinions.

    In short, when New York, Ohio, Texas, and California and Illinois and Georgia and the others start to recover, Nevada will start to recover. Looking at the data for the rest of the country, they all are closer to being well again than is Nevada. Visitor numbers here are flat to rising. Even if they’re not dropping all their cash yet, they’re coming back. As more and more people come back the resorts will need to hire more people to serve the customers. After a while the rooms will start to sell out again and new resorts will get built. This will all progress over the next two (and more) years, but it’s anybody’s guess exactly where the process will have progressed when you plan to move here. But if you have a paid-off home, then you’ll really enjoy Las Vegas living, I guarantee it!

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