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 Las Vegas is the “Perfect Storm for Residential Investors.   
 
2009 residential sales was a big improvement over 2008!  According to GLVAR, we closed around 48,500 transactions in 2009 compared to around 28,000 in 2008.   Good news, right?  Not so fast.  The rate of foreclosures rose from about 8.9% in 2008 to 12% in 2009.  With over 3 million homes nationwide hit with foreclosure notices last year, nearly 95,000 homes or about one in 82 homes in Las Vegas was served.  Las Vegas housing values have plummeted from the highs of 2004.   Is this a bad market to invest in?
 
 
 There is Good News and Bad News.  This is a devastating market for those whose properties have depreciated so far over the last 5 years but a boom for savvy real estate investors and first time home buyers.  MDA DataQuick, a San Diego based real estate information service, estimates that 41.2 percent of the homes sold in Vegas were purchased by outside investors and 47.1 percent of those sales were all cash.  First time home buyers accounted for nearly 53% of all purchases, most with Government-insured FHA loans. 

2010 is definitely still going to be a buyer’s market.  The demand for these homes is strong with sometimes multiple offers and bids on bank owned homes and short sales.   However, with continued low interest rates and still a steady stream of homes coming on the market.  If a large or small investor is looking to improve their portfolio with quality real estate, Las Vegas is the place to invest!  Is this a horrible real estate market? 

Depends if you are a buyer or a seller.  For some reason we usually define a “good real estate market” as one in which there is low inventory and prices are rapidly increasing.  This kind of a “good” market is difficult for buyers and investors.   Buyers and investors like prices to be low, interest rates low and lots of inventory to choose from! 

This is the perfect storm for investors and buyers alike.  The price of homes in Las Vegas has dropped for over 30 months. The median price of homes  is now about 60% less than the peak price of $312,000 in the latter part of 2006.  Prices have in effect, been rolled back to 1999 median home sale price of $130,000 in 2009 compared to $129,000 in 1999. 

Summary:   One person’s mis-fortune is another’s fortune.  None of us have a Crystal ball or Ouija board to reliably predict the future.  Most people were not prepared to financially weather “The Great Recession”.  None of us have seen this kind of a downturn in our lifetimes. 

Is this the new paradigm?  Perhaps.  One thing is for sure.  As things change you must learn to change with it or you are left behind.  Instead of sitting there wringing your hands about how “Bad” the market is, spend your time figuring out how you can shift your position to take advantage of today’s market.  There is lots of opportunity in this market, you just need to understand how you can profit from it. 

Terry Barone and Michael Bash of Prime Source Commercial  are currently working with several investors to take advantage of this “buyers market”.  If you are interested, feel free to call or email us for more information.

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