The Las Vegas housing market continued its white hot rise as the sales volume of new construction rose in April to the second highest levels since the summer of 2008, which was in the midst of the housing bubble boom. Meanwhile, the median home price for new construction hit a record high. Both January and April had the fastest sales rate (lowest days on market) since July of 2008. The median home price for houses sold in April was up to $271,600...this is the highest mark since the government began keeping these records in 1993.
This is a whole lot of positive data, and many people are taking these indicators to be signs that the housing market is recovering aggressively in Las Vegas. This certainly appears to be the case. But, at the risk of being the only downer in the room, I'd like to remind everyone that the recent highs in Las Vegas real estate isn't based on particularly wonderful economic growth, either locally or nationally. Unemployment is still way too high. The Fed is hinting that quantitative easing might be ending soon, but it hasn't ended yet. Cities like North Las Vegas are still teetering on the brink of bankruptcy. And, of course, let's not forget the elephant in the room...AB 284. The Nevada Assembly drastically altered the Las Vegas housing market when they passed a bill that virtually ended foreclosures in the Las Vegas valley. The assembly members might be looking like heroes right about now. But it has been my experience that anything that alters the natural flow of the economy eventually has its consequences and they are rarely pleasant. I am seriously concerned as to whether or not the growth in the Las Vegas housing market can be sustained. I would caution potential investors to focus on cash flow, cash flow, cash flow. If you make sure that you purchase a property with positive cash flow right out of the gate, you will be insulated against the further twists and turns of a potentially fickle Las Vegas housing market.
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