Las Vegas real estate, mortgage, appraisal blog

News reports state that Las Vegas median home price fell $10,000 in July, 2007 to its lowest point since March, 2005; but, Las Vegas home appraisers have seen a greater drop than that for a very long time.

The problem with median home price figures is that they will always trend upward because new homes sell for more than existing homes.  This figure is also irrelevant when the market shifts to more high end or more low end homes.

The median price in June 2006 of $315,000 was reported as the peak of the market.  But, residential appraisers in Las Vegas saw prices drop much earlier.  That's because we see the value of the same home. We don't compare averages.  Now, the median price of resale homes sold on the MLS (Multiple Listing Service) is reported to have been $295,000 in July.  That is 3.3% lower than June and only 6.3% below the peak of $315,000 reported in June 2006. 

I laugh at these figures.  It is not as though they are inaccurate; but, they are misleading.  the value of the same home probably dropped 20% from June 2006 to July 2007, not 6.3%.

There are now over 30,000 residences on the market.  The definition of a buyers market is: an inventory of about 15 months because 30,000 homes (with many REO's) are available with only 1,300 selling per month (11% fewer than in June and 34% fewer than last year). 

The question of how far prices will fall yields a variety of answers. Some experts believe that the market already has reached its bottom, while others believe it will drop a few more percentage points. Some analysts predict prices could drop more than 20 percent from their peak in June 2006.

Experts say values will continue to fall.

Its silly to quote median prices failing 6.3% from a year ago when the comparison of the same house then and know is about 20%. 

But, Las Vegas appraisers are used to big numbers being reported.  The median price of Las Vegas homes reportedly jumped 97% from 2002 to 2006 (40% in 2006 alone).  They say prices jumped from $145,000 to $285,000.  The value of many homes did jump up like that during that period; but, those median prices were influenced by the huge number of larger and larger new homes selling during that period.  

The biggest jump was 40 percent in 2004 and the appreciation slowed to 3.6 percent in 2006.

I suspect their market will begin to recover in 2008 - especially if the Fed lowers interest rates.  But, as with some experts, I don't expect prices to jump up again until early 2010.