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Top Nevada Appraiser ‘Pops’ Wrong Appraisal of the Las Vegas Real Estate Bubble
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Added: 01/23/2006
Type: Summary
Viewed: 274 time(s)
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Top Nevada Appraiser ‘Pops’ Wrong Appraisal of the Las Vegas Real Estate Bubble
“Fortune magazine is wrong. Las Vegas housing prices will NOT decrease 13 percent as they say. Las Vegas Housing prices will rise, not fall in 2006. Yes, there has been a slight correction towards stabilization. But, if you think housing prices in Las Vegas will crash – you don’t know Vegas,” says Don Foster Scoggins of Appraisers of Las Vegas .com.
Analysis by a Las Vegas Property Appraiser
Scoggins points to the history of Las Vegas, its tremendous population growth and growing economy. He scoffs at the notion of a looming collapse of the Las Vegas real estate market bubble. He cites these highlights of the Las Vegas real estate market saga:
• In 1905, the City of Las Vegas started with only 30 people. Even then, naysayers said the city would not last.
• In 1955, surrounding Clark County had grown to over 25,000. Life magazine published a big cover story asking, “Las Vegas – Is the Boom Overrated?”
• In 1995, when the population topped 1 million, bankers were warning against loaning too much money to prevent “over-building.”
• Nevada has shown the fastest population growth in the nation for 18 years straight.
• In 2005, abut 7,200 people moved here every month, that’s 86,500 in just one year.
• In 2025, about 1.5 million MORE people are expected to be living in the Las Vegas Valley.
That growth rate means a need for more new homes -- so the demand for Las Vegas homes will continue. Scoggins argues: "It’s obvious: as demand increases, prices increase. It’s simply the law of supply and demand in action. There is very little land available for development in the central part of Las Vegas, but there are still a whole lot of people moving here (over 200 per day)."
The seasoned Las Vegas real estate appraiser has seen the steady growth in tourism and visitors to Las Vegas. In 1985, Las Vegas had about 14 million visitors. In 1995, it was 29 million. In 2005, there were almost 39 million visitors. 40 million tourists in 2006 will pump a lot of money into the Las Vegas economy. A growing economy and population will continue to drive real estate prices upward.
Scoggins offers some caveats to people who expect the Las Vegas real estate market boom to continue at its rate of hyper appreciation (54% in 2004 and 14% in 2005).
Las Vegas housing affordability
As a result of skyrocketing prices in Las Vegas homes, many young families and retirees will get pushed out of the market. The Las Vegas median home price has increased 96% in five years but the median household income increased only 14%. That in turn, will push some people to shift to other, more affordable locations like Phoenix.
It's just growing pains
Scoggins warns that Las Vegas real estate investors should expect a lower rate of appreciation (at least compared to the red-hot pace of the last two years). "But, this is not a collapse, it’s just Las Vegas growing pains. To those who bought homes at the tippy top of the market, I’m sorry. Those homes have dropped a little because they were overpriced. But, overall, prices are higher and higher year after year," Scoggins said.
“Las Vegas is more likely to be destroyed by fire and brimstone than have a collapse of housing prices,” Scoggins concluded.
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