This might be the question that Listing Agents and Selling Agents may want to ask themselves as we move into the fall. We have already seen sales fall by 17% from last August to this August and speculation is that the 2012 numbers have more to do with lack of inventory than to do with the weak economy.
The inherent problem that has been devastating the real estate in Las Vegas as well as home owners, is the massive drop in prices. The city of Las Vegas is the only city in the country with more mortgage value than real estate value. It is hard to see how it will sort out in the near future. If we have seen the bottom in the real estate market most property would have to nearly double in value for people to get close to even. It is a massive undertaking and not likely to happen for years to come.
The key factor is that if you own a house that has gone down 60% , you will have to see it go up over 100% for you to just break even upon a sale. This is a number that is astronomical in real estate even in Las Vegas. The city of gambling and high stakes poker has folded when it comes to real estate values and there seems to be little option of doubling down to get out of the hole.
If you have an unfavorable view of the short sale, which most people do, it is time to consider the facts if you have any thought of moving in the next 5-7 years. If you are in a house worth $100,000 with a mortgage of $200,000 your home value will have to double and then some for you to break even on a sale. Even if property would run up at 10% a year from this point forward, which is extremely unlikely, you would be waiting nearly 10 years to get to a point where you would be able to get out. This also is assuming that demand is there for your home and that there are not hundreds of other people flooding the market to sell at that time as well.
The interest rates are historically low and they will only go higher in the years to come and this in turn will hurt prices. People will be able to afford less home because monthly payments will be much higher for lower mortgage amounts. The hope for Las Vegas real estate is that the 46% of the sales in August turns in to 56%, 66% and 76% of total sales in the months ahead. If this happens we might see a clearing of the market sooner and once again people will begin to have the freedom to buy and sell when necessary and not have their moving plans dictated by the real estate crash.
The banks are becoming more agreeable to short sales and if you are burdened by a huge mortgage it may be time to explore the short sale process. Call me or email me today and to arrange a time to mee and go over your options. If you have equity it is also a prime time to sell while inventory levels are so low and prices have jumped up dramatically. Don’t wait, call today. 702-338-8526
Chris LaHaie Realtor
Prudential Americana Group,
Las Vegas, NV