Las Vegas Real Estate Bubble

The Las Vegas real estate market is as strong as ever. The median sales price of a pre-existing home increased to $309,000 in August, up from $306,950 in July 2005. Single family homes saw a growth of about 2.8 percent, while condos and town home sales increased in price by 17 percent.

Las Vegas Real Estate Growth Helps Fuel the Economy

The US economy has been powered by strong real estate growth in the past few years. There is no knowing when or how it will slow. There are signs of some leveling of the Las Vegas real estate market, as the number of homes for sale has only increased slightly from the previous month but that is nothing to be alarmed about. As the economy in Las Vegas is as healthy as ever and more than 5000 people are moving into Las Vegas every month, the demand for homes continues to be healthy.

The Las Vegas real estate market is expected to continue its strong showing unless there is some drastic change in the economy or a national disaster strikes. There is some alarm though about the speculative investors who may be highly leveraged in the Las Vegas real estate market. If these people are unable to pay off their debts then these speculative properties might go for foreclosure. If too many of these properties flood the market then there is no saying how the market will react to it. Nationally the number of foreclosed properties up for sale has gone up by 3 percent.

The “Real Estate Bubble”: Fact or Fiction?

Analysts are viewing the Las Vegas real estate market as a bubble waiting to burst. Their reasoning is that the double digit appreciation of real estate prices for the past 3 quarters is unsustainable. The Las Vegas real estate market has been leading the nation for the past year in real estate appreciation.

Affordable housing has become increasingly difficult to obtain in the heated Las Vegas housing market. The Las Vegas median household income is $59,100, and the median home price is $280,000. In fact, Las Vegas ranks 124th among 158 metro areas in terms of affordability, according to an index compiled by Wells Fargo and National Association of Home Builders.

The effect of Hurricane Katrina on the housing industry is still being assessed. Analysts predict an increase in prices of Las Vegas real estate as construction materials and fuels prices come under increasing pressure.