Tuesday, January 01, 2008

Las Vegas Real Estate Thoughts for 2008

The year 2007 was a rude awakening for owners of Las Vegas homes who found their properties steadily decreasing in value. Prices between November 2006 and November 2007 declined an estimated 10% and many of those who bought real estate during 2005 and 2006 found themselves owing more than their properties were worth. Las Vegas foreclosures led the nation and auctions had hundreds of properties to bid on.

But already in the last few weeks of December and the first new hours of 2008, we can feel the scared-to-death-by-the-media buyers of 2007 coming out of hibernation, shaking off their fears and getting ready to cautiously dive into the real estate pool again. Experts have estimated that the worst is over, and that by the end of March 2008 prices will stabilize and actually start to slowly appreciate in value again as inventory decreases. One think tank already is predicting a housing shortage by late 2009, assuming workers flock to the state to fill jobs created by billions of dollars of new construction on the Las Vegas Strip.

“We're merely at the bottom of one cycle and heading back up on another one,” said Jeremy Aguero, one of Applied Analysis' principals. He points to the stream of Strip mega-resorts planned to go up over the next few years, from Las Vegas Sands Corp.'s $1.8 billion Palazzo, opening this month, to Boyd Gaming Corp.'s $4.8 billion Echelon in 2010.

In all, the surge is estimated to add more than 40,000 hotel rooms by 2012 and create around 100,000 direct and indirect jobs, according to Deutsche Bank. “Typically, people read the papers,” said economist Jim Shabi of Nevada's employment department. “They know when Vegas is building casinos and they come to town to find jobs.”

G. William Barnett II, author of “Are You Dumb Enough to Be Rich?” says “These are the times smart real estate investors live for. There’s more money to be made in chaos than at any other time, and no other investment strategy has created more millionaires than real estate.” As for the housing markets Barnett likes best right now, he says number one is Las Vegas, which currently has $10 billion worth of commercial construction going on and will soon have a demand for thousands of new employees.

So, like it said in one of my favorite all time movies, Field of Dreams: "If you build it, they will come." And they will have to find housing! Now is definitely the best time to buy Las Vegas real estate, BEFORE the next boom comes and you are left standing on the wrong side of the wave.

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