The Las Vegas Review-Journal recently reported that declining Las Vegas home prices have some investors looking for bargains. As prices have dropped 25 percent in the last year and foreclosed properties have flooded the market, a growing, new breed of investors are hitting the streets trying to snatch up deals.
Many of these new waves of investors are people from other countries looking to take advantage of the weak dollar. The mentality among these investors seems to be that there is a growing sense of urgency to buy while prices are low. Nearly 65 percent of all homes sold in the Las Vegas area last month was a short sale or foreclosed property.
This continual influx of priced-to-sell inventory has been eroding real estate values across the Las Vegas area for over two years. Over half of the homes sold are vacant—a clear sign that would-be investors are running out of time and options. With many home buyers in over their heads and owing more on a home than it is actually worth, the only option is foreclosure.
The bargain prices have led to an increase in buyer traffic. Throughout the summer, the number of people looking for homes in Las Vegas increased—mostly in lower-priced homes. In some cases, homes have been selling at or above their asking prices. Some sellers even report instances of bidding wars among buyers.
Cause for Concern for Retirees
While the increasing number of potential buyers offers a glimmer of hope for homeowners in Las Vegas, the news is not all positive. As a retirement hot spot, Las Vegas is home to a huge number of retirees who invested in their new home at the wrong time and will likely not see their housing value return to the price they paid for a number of years. The fact that some buyers are now considering Las Vegas as a viable market to buy is encouraging for these homeowners.
But the thought that many of the buyers are investors looking for deals is cause for concern. The last thing the Las Vegas real estate market (or any real estate market) needs right now is another round of investors creating artificial demand and sending the country on another rollercoaster ride of housing values.