Why Detroit and Los Vegas Real Estate Is Still a Dangerous Investment
During the housing bubble and subsequent crash that occurred in 2007, Detroit and Las Vegas were two of the hardest-hit markets. After peaking in 2005, these two cities saw property value declines in the double digits. As a result, property values in both cities are the lowest they’ve been in years. For real estate investors, these rock-bottom prices may look like a great reason to get into the market. Unfortunately, many indicators suggest these markets may still be too risky.
According to Trulia, the average listing price in Detroit as of July 5 is just over $45,000 and the media is awash with stories about desperate homeowners looking to get rid of their homes for just a few dollars. The median home price of $64,900 is down significantly from the $77,000 average of five years ago, and although rock-bottom prices are driving relatively brisk sales in luxury homes, the overall picture for this city is less than promising. Homes in Detroit have fallen a staggering 51% from their housing bubble peak, and are now sitting at around the same levels as in 1993, according to the S&P Case Schiller Index.
It seems like housing prices in Detroit couldn’t get much lower. And while that remains to be seen, the full economic picture in the struggling Motor City does not appear to be pointing toward a strong upside. According to the Bureau of Labor statistics, unemployment in Detroit is still at about 20%. In addition, tighter mortgage lending standards combined with Detroit’s shrinking population point to a lack of demand for homes in this city. But the biggest issue may come from the huge number of foreclosures the city has experienced, which has led to a market in which more than half the homes for sale are bank-owned. Because these properties tend to sell at a discount, this could force prices down even further – or at least prevent real estate investors here from realizing much of a return in the coming years.
In Las Vegas the average listing price is sitting at around $216,000 as of the week ended July 5. That may sound a lot more promising than Detroit, but the median sale price has fallen by $200,000 compared to five years ago, and is sitting at valuations that are on par with 2000 levels, according to Trulia. Many of the same problems are plaguing this city as in Detroit, including a high number of foreclosure homes on the market and a relatively high 12.4% (May 2011) unemployment rate.
Buying in Las Vegas is clearly risky, as bank-owned homes continue to hit the market. That said, for those looking to buy a vacation property, Las Vegas could pose an acceptable risk for buyers who are less concerned with realizing a return on their investment. However, because many of the properties for sale in Las Vegas are condominiums, it’s important to consider the potential costs of being an owner in a building with few other tenants. After all, who will pay the maintenance fees?
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Markets such as Southwest Florida, where Lassus bought her second home, and Las Vegas have not necessarily hit bottom in terms of prices, so home values could fall further. If that happens, it might be years before you see a return on your investment.
Single-family home sales increased 8 percent in June from the same month a year ago, while median prices slipped 11.1 percent to $124500, the Greater Las Vegas Association of Realtors reported Friday. Counting condo and townhome sales,
The number of homes that lenders foreclosed on in the Las Vegas region in May increased from both April and a year earlier. Lenders foreclosed on 3818 single-family house and condo units last month, up 5.2 percent from April and up 41.4 percent from a
Condominiums in the Mira Villa Summerlin residential area are currently being offered for sale. Recently completed in 2010, the luxury condominiums border the Angel Park and TPC Las Vegas golf courses. They consist of two- to four-bedroom units from
"How did some attorney put through a foreclosure illegally?" According to The Week, A jury punished Countrywide Home Loans in January 2009 for failing to notice that it was repossessing and selling the wrong Las Vegas condo back in 2003.
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Las Vegas Condos, High Rise, Lofts, Luxury Homes Real Estate and Foreclosure News by award winning Las Vegas luxury real estate agent and 39 year Las Vegas Resident, June Stark. Bookmark this blog to read the latest news in Las Vegas & Henderson NV real estate focusing on high rises, luxury condos foreclosures and lofts for sale in Las Vegas and the luxury gated neighborhoods of Henderson NV. The Stark Team has over 35 years combined Las Vegas and Henderson NV real estate experience and Lauren & Travis are native Las Vegans, and June is a 39 year resident. When you are looking to scope out the best areas in which to place your investment dollars, you need a team of professionals to help you navigate the volatile & vibrant world of Las Vegas real estate. 702 376-5220 Award Winning Las Vegas Real Estate agents and longtime Vegas residents, The Stark Team, features the latest news regarding Las Vegas condos, high rises, lofts and foreclosures. Because we have been involved in selling all Las Vegas, Summerlin & Henderson NV real estate as well as the luxury high rise condos, condo-hotels and new Las Vegas Lofts from their pre-construction stages through the great condo craze of 2004-5, and the decline of 2009-present, we understand the market cycles, the stacks and views, and values. Let our 35+ tears of combined experience work to your advantage.
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