Making Sense of Mixed Messages in the Las Vegas Real Estate Market

Are you one of those people who are confused by statistics, Internet sites, newspaper articles, TV news reporting and real estate agents who tell you different things about the Las Vegas real estate market? If so, you are one of many who are trying to piece together the puzzle in an attempt to make logical decisions about the market.

Everyone understands that the Las Vegas housing prices and sales volumes are down, and that homes prices are hitting record lows. Few people understand the dynamics of a changing real estate market, and most assume that things will continue into the indefinite future.

It is a fact, however, that multiple listing service sales statistics indicate that monthly sales volumes have started to consistently increase in the Las Vegas housing residential market. While the market is struggling with unprecedented foreclosures that have kept it moving in the wrong direction for quite a while, this trend will not continue indefinitely into the future.

The doom and gloom predictions regarding the fall of the commercial real estate markets in Las Vegas have been proven wrong, and while national economics, credit tightening and fuel prices may hold the inevitable direction change at bay for a while longer, the market will change.

As this article is written, the cost of construction, both the cost of labor and the cost of building materials are climbing. As everyone who watches the news or travels knows, the value of the dollar has been falling. It is not difficult to understand that these cost and monetary factors will bolster the value of existing homes over time.

A downward correction in the Las Vegas real estate market was as necessary as any correction that has taken place in the stock market. Home values had been artificially inflated when the market lost touch with the economics of supply and demand, and we are all paying the price for that lapse.  Median home prices have fallen from nearly $ 350,000 to $ 190,000 in October of 2008.

The problem with real estate markets is that, like the stock market, they are notorious for their swings. The group psychology that has caused the prolonged Las Vegas market slowdown can also cause a dramatic shift that acts like a spike in a stock price. Anticipation of price increases can entirely reverse the current downward trend. When the change occurs, the market will begin to move past its "bottom" and prices and sales volumes will begin to increase.

News reporters, real estate agents, appraisers and even economists cannot predict when we will reach the bottom and when the market will rebound. It is, however, just a matter of time.

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

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