By Dave Berns
The worst housing market in 70 years has created a recession-flavored version of the American dream for first-time home buyers in Las Vegas.
Attracted by home prices that have plummeted to a fraction of what they were during the peak of the housing boom in Las Vegas, new buyers have helped drive the healthiest home resale market in Southern Nevada since the bubble popped. Economic pain for sellers is translating to hope and opportunity for people shopping for their first home.
Along with investors and others seeking real estate bargains, first-timers spurred sales of 40,033 existing homes in the Las Vegas Valley from January to October — the highest figure since a record 50,009 resales during the first 10 months of 2005. The median price of an existing home was $110,000 last month, almost a third of what it was at the height of the bubble.
“In terms of the numbers, it’s a fantastic year for resales. Think of how many sales we’d have if it wasn’t like that,” said Homebuilders Research President Dennis Smith. “Why is demand there? Look at the prices. So long as we have these low prices, we’re going to have demand. We’ve got plenty of investors. Vegas is not dead and blowing away.”
Although prices have plummeted, getting into the market isn’t always easy. Among homebuyers seeking to tap into bargain-priced properties with conventional mortgages rather than the 50 percent down, cash approach of investors, a significant number bemoan a climate of lender delays, miscommunication and reluctant appraisers who are skittish about doing their jobs amid the price plunge and the uncertainty it has spawned.
Cost-conscious banks are understaffed and often unable to handle the volume of mortgage applications, Smith says, adding that many bank employees lack the training to handle the complexities of short sales, in which homes sell for less than the mortgages that were obtained to purchase them. He says home appraisers are low-balling their appraisals as they struggle to assess the value of so many homes.
“The banks and appraisers are covering their behinds, and the pendulum has swung way past what would make the most sense,” he said.