[lasvegashere]

Just sharing! Could Las Vegas RE market see a correction soon or in 2018, or prices will continue to go up even more, what do you guys think?

Fitch Ratings says prices are 15 percent to 19 percent overvalued and have become “increasingly unsustainable.” (Scott Kost/KSNV)

Bubble watch: Local Realtors say housing market 'appreciating for logical reasons' | KSNV

[stilllookin]

As a total outsider (I'm from the midwest), one thing I have noticed in comparing home prices versus rental prices is that in henderson, the rents seem way too low for the price of the houses in the area.

For example, I see many home rentals in the $1300- 1600 per month range. I also see many of the houses nearby for sale for $275000 to $325000.

Back here in the midwest, a 1300 to 1600/mo rental gets you a $175000 house. To rent a $300,000 house here, you'll pay $2500/mo.

Perhaps the real estate experts here would know, but it seems to me that renting a $300,000 house for $1500/mo will never make the owner a dime given the mortgage/capital cost, prop tax, insurance, hoa, maintenance, etc.

Is it because there are so many investor owned houses in Henderson?

It seems to me that something has to give...either rents need to come up, or sale prices need to go down.

[OmegaSupreme]

All this confirms is that Fitch ratings are absolutely useless

We will have double digit appreciation over the next 12 months

[Coco6163]

Perspective is a very good thing to have if you are trying to figure out housing prices in Las Vegas. In the short term, prices tend to be very volatile. In the long term, expect very slow, steady, and relatively small growth. I doubt that is widely understood about Las Vegas housing.

Here is a link to an excellent resource for seeing what has happened to housing prices in Las Vegas since 1987.

[Willy702]

If it was not affordable then the area certainly would not be seeing the high in migration of the past few years. A few channel checks I have access to indicate the growth in population is increasing in pace and that seems to indicate housing to grow at even faster rates. It will all correct at some point, but as long as inflow continues and builders add only modest new supply of both homes and rentals it's hard to see a decline.

[BBMW]

Look at what's happening in LA. If LA prices are rise, LV will rise in lockstep as those who either cash out of LA, or are priced out head to LV.

[lvmensch]

At this point the rise in LV pricing is at the same rate as the US data per Case Shiller but at a significantly lower level. That is not a bubble. And I would expect it to continue as long as the national trend does.

[ddrhazy]

Originally Posted by stilllookin

As a total outsider (I'm from the midwest), one thing I have noticed in comparing home prices versus rental prices is that in henderson, the rents seem way too low for the price of the houses in the area.

For example, I see many home rentals in the $1300- 1600 per month range. I also see many of the houses nearby for sale for $275000 to $325000.

Back here in the midwest, a 1300 to 1600/mo rental gets you a $175000 house. To rent a $300,000 house here, you'll pay $2500/mo.

Perhaps the real estate experts here would know, but it seems to me that renting a $300,000 house for $1500/mo will never make the owner a dime given the mortgage/capital cost, prop tax, insurance, hoa, maintenance, etc.

Is it because there are so many investor owned houses in Henderson?

It seems to me that something has to give...either rents need to come up, or sale prices need to go down.

One thing which is keeping the rents down on these nicer properties is that a lot of investors snapped them up for good deals and are not so concerned with raising the rents if it will anger their tenants. These landlords may increase the rent every time a tenant leaves but they won't raise them while the tenant is living at the property.

Also the housing in the 1000-1500 sqft range is quickly catching up to the rental rates of houses in the 1600-2400 sqft category. But the problem is that the average household income won't allow for rents to go above $2500/month save for Summerlin/GV. At a certain point, rents hit a wall.

But you're right. It was always better to buy two 1000 sqft homes for let's say, 50k and rent it out for $900 per month, instead of buying a 2400 sqft home for 100k and rent it for $1500/month.

Two reasons why people may prefer buying 1 large home instead of 2 smaller homes, from an investor stand point is that;

1. There's less hassle.
2. An investor is buying in a neighborhood they wish to retire to in the future.

Just my take on it though.

[equid0x]

Coming from the east coast, the rents appear to be very low in LV for being a major metro region. I was shocked to find SFRs renting for $1100/mth or less when I moved here. Would have to be an all cash purchase to make anything at those rates, although I think in many cases the idea is only to occupy the property until the market goes up.

[soclose]

What goes up must come down.