Have Real Estate Price Decreases Been the Same in All Areas?

The Las Vegas real estate market has seen dramatic price decreases during 2007 and 2008. The price decreases have not, however, been uniform across all neighborhoods or across all property types.

Residential home sales have been hit the hardest by the "recession of 2008" with its 15 year high unemployment rate and its record foreclosures. Greater Las Vegas Association of Realtors (GLVAR) statistics indicate that the average price of a single-family home sold in July of 2007 was about $ 375,000 while the average sales price in July of 2008 was $ 253,000. That's a 32.5% price decrease in one year!

What the statistics don't tell you is that the price decreases vary considerably from one zip code area to the next. Statistics provided by Data Quick, Inc. via their DQnews.com Internet site (dqnews.com) indicate that the median price of homes decreased in most Las Vegas zip code areas between the second quarter of 2007 and the second quarter of 2008 between - 2.20% and - 55.9%. Notably there were even a few zip code areas that saw median home price increases over the same period.

Data Quick's information indicated that in May of 2008 the "median sales price (of homes) dropped to its lowest level in four years . . . as foreclosures continued to weigh heavily on the housing market." [1]

Per Data Quick, the median home price decreased in zip code area 89119, the zip code area that includes most of the Las Vegas Strip, by 57.3% while zip code area 89032, located in north central Las Vegas, saw the median home price decreases of only 2.2%. Price decreases have been due in part to investor speculation, and some zip code areas may have had larger decreases due to the number of investment homes purchased within them.

Commercial and industrial properties have fared better that homes due to their being fewer forced sales. While vacancies have increased for some property types, rental rates have remained relatively stable or increased in some sub-markets.

The answer to the question, "have sales price decreases been uniform," is no, there has been a great deal of variability in the market.

[1] Las Vegas May 2008 Home Sales Report, http://www.dqnews.com/News/Las-Vegas/RRCLNV080723.aspx

This article is copyright protected 2008 by Glenn J. Rigdon.

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