subject: Las Vegas Houses - What Is Up With Them? [print this page] Are you wondering what all the fuss is about Las Vegas houses? Unless you do not listen to, or read, the news, it would be hard to miss hearing about the housing market in Las Vegas.
Beginning in the middle part of the last decade, the values of homes saw unprecedented growth. The average price of homes roughly doubled in a three year period.
Wall Street was fueling this rapid appreciation with the creation of new types of mortgages such as interest only mortgages and negative amortization loans. Lenders relaxed their underwriting standards making credit very easy to get for everybody.
Due to the availability of easy credit and lax underwriting standards, many people were able to buy homes that they would not normally be able to afford. Any many people refinanced their homes to gain access to the equity they now had.
Las Vegas houses became the sure fire thing to invest in. The guiding wisdom of the time was that homes were the new gold rush. Everybody acted as if the increase in values would continue forever.
The ending of the story is well known. Las Vegas is the leader in foreclosures, and most homes bought during the last 5 years will go through the foreclosure process.
The upside to this is that if you are a first time home buyer you can once again afford to buy a home. There are great deals to be found and prices are at a level below what it costs to build homes.
Most homes being sold are easily affordable, priced between $100,000 and $150,000. These homes, that five years ago were out of reach for the average buyer, can now be found again.
As weird as it may seem, Las Vegas homes are once again in huge demand, and it has become difficult to buy a home in Las Vegas.
Half of all sales are foreclosures. And of all sales, one half are cash buyers.
For the first time home buyer who has been pre-approved for a mortgage, you face stiff competition from the cash buyers. When a seller is presented with two offers of the same price, the cash offer will be taken. Cash offers trump offers that are contingent upon the buyer being approved for a loan.
So we are back to where we were 5 years ago, with more buyers than homes for sale. The only difference today is the price of the home.
