Have you always had your sights set on Lake Tahoe real estate? Prepare yourself to spend a good chunk of money to make that dream come true. A recent listing is going for $75 million! This is the most expensive home to be listed on the waterfront according to the Reno Gazette-Journal. Granted, you may not require the theatre, 13 fireplaces or the caretaker’s quarters this estate boasts, but you will still spend a good bit to have a home in Las Vegas.
Real estate in Las Vegas is overvalued by an “increasingly unsustainable” about 15% according to Fitch Ratings. Fitch manager Grant Bailey stated that the area “has rebounded dramatically from the financial crisis, so much that its upward momentum has carried it too far and home prices have not overshot.” Fitch also adds that Nevada “has now emerged as the most overheated housing market.”
Even at 15% overvaluation, Nevada has seen worse over-inflation. In 2013 the housing market in the area’s real estate appreciated by 30% from year to year. This is thought to be caused by investors buying up property to use as rentals. Many feared another financial crisis in the housing market during this climb, but the inflation rate has backed down by about half.
The area is no stranger to overvaluation of real estate. Back in 2006 home values were overvalued by nearly 50% during the big construction boom. Of course, the housing bubble was partially to blame for that too as buyers who should not have been granted loans were buying left and right.
Values today are still up by about 10% over last year. While this is much more reasonable than the 30% of previous years, it still makes the area the third largest growing market in the country.
While foreclosures are down, they are still a prevalent force in the housing market. While the figure is down from 2016, still one in every 191 homes in the area saw w foreclosure-related filing thus far this year. This is down 30% from last year but still ranks 18th in a list of 200 metro areas. Atlantic City (America’s East-Coast gambling mecca) still tops the list of foreclosures at 1 in every 58 homes having a foreclosure related filing.
There is still a limited inventory of real estate in the area and a lot of buyers: a recipe for overvaluation of property. This can make it extremely difficult for a property owner to find adequate buyers for their properties, which accounts for so many properties being purchased as investment properties rather than for use as a primary residence.
So, who is in the market for Las Vegas property? Foreign investors are buying United States properties in numbers previously unseen. Foreign investments in Las Vegas area real estate has increased by 49% this year compared to last. The National Association of Realtors reports that Chinese citizens snagged the most property, followed by Canadian and Mexican buyers. These buyers purchased 284,955 properties which account for 32 % of all sales last year.
As a purchaser, you better have a good amount to spend on a Las Vegas home or condo. If you’re a seller, you may want to rethink the traditional buyers and seek investors to make that sale.