As most people know, Las Vegas’ housing market was among the most volatile in the country the past decade, with wild prices and construction during the bubble and a near wipeout in the bust.
What most people don’t realize is how unpredictable it still is.
Since hitting bottom a few years ago, the market has changed directions several times, with soaring and slowing prices; investors buying in bulk and then backing out; a surge in overpriced listings; and rising and plunging new-home sales. What’s more, Gov. Brian Sandoval last year approved housing laws that contradict each other, and two hallmarks of the recession — foreclosures and underwater borrowers — have improved but remain among the worst nationally.
Housing is a volatile business but seems more extreme in Las Vegas, with its long history of fast-paced construction, out-of-town investors and transient residents.
“It’s a crazy market,” Realty One Group agent Jim Brooks said.
The median sales price of used single-family homes peaked in mid-2006 at $315,000 and hit bottom in early 2012 at $118,000, according to the Greater Las Vegas Association of Realtors. Prices soared at one of the fastest rates nationally afterward, thanks largely to investors’ voracious appetite for cheap homes. They bought in bulk, sight unseen, to turn into rentals, and pulled the market out of the trash heap. A typical house now sells for about $200,000.
With fewer bargains out there, investors have been pulling back for months, while sellers, emboldened by the rebound, often list too high and get ignored by the shrinking number of buyers.
The homebuilding market, after recovering from the depths, is plunging again as would-be owners, saddled with financial woes and sticker shock, can’t pay developers’ rising prices. Builders have sold 23 percent fewer homes year-over-year, compared with a roughly 33 percent jump in 2013, Home Builders Research says.
Las Vegas’ notorious mortgage woes have eased, but banks still target delinquent borrowers more often here than in most states, and the share of upside-down homeowners is second-highest among major cities, recent reports say.
Meanwhile, Sandoval last year signed Senate Bill 321, the “Homeowner’s Bill of Rights,” which sought to make it easier for residents to avoid foreclosure. But he also signed Assembly Bill 300, which makes it easier for banks to seize homes.
When the dust settles and Las Vegas finally finds its housing equilibrium, we’ll be able to look back and try to explain it all. But for now, it might be best to keep your arms and legs inside the car because this roller coaster ride isn’t quite over.