Economist: Las Vegas home prices to go up slightly in ’11

By Buck Wargo

Fri, Aug 6, 2010 (3 a.m.)

An economist says Las Vegas could see healthy home-price appreciation in the next five years.

Mark Boud, a California-based economist and founder of Real Estate Economics, a real estate consulting firm, said he expects home prices to increase slightly in 2011 and by 2015 values could appreciate 7.5 percent a year.

Low home prices have driven sales in Las Vegas despite the weak economy and as it improves in 2011, that should spur more sales and some appreciation, Boud said. He said Las Vegas is 58 percent undervalued.

“If you look long term, Las Vegas is a screaming deal,” Boud said. “Those who are buying now are paying 12 cents on the dollar (of their income) versus 35 percent in 2006.”

Las Vegas will finally see its first year-over-year job growth in the first quarter of 2011, he said.

Las Vegas prices have begun leveling off during the past year, but they could dip slightly in the second half of the year because the federal homebuyer tax credit has ended. That stole some of the demand from the future, he said.

“The next six months are going to be ugly,” Boud said.

Foreclosures have dropped in Las Vegas during the past 12 months, but the market still has an oversupply of homes, Boud said. It has about 10 percent more homes than needed, and it will take about five years to work through that, he said.

What has hurt home sales more than anything is the tight lending standards imposed by banks, Boud said.

What will help drive sales in the future is more seniors looking at Las Vegas as an attractive opportunity to purchase, Boud said.

More predictions

Dennis Smith, president of Home Builders Research in Las Vegas, has updated his forecast of new- and existing-home sales through 2012.

Smith projects Las Vegas will have 45,000 sales of existing homes in 2010, about 115 more than 2009. In 2011, Smith said sales will dip to 44,000 before returning to 45,000 in 2012. The market high was 64,168 in 2004, he said.

In the new-home market, Smith projects 5,100 sales in 2010, an increase of 132 over 2009. He said that should increase to 5,300 in 2011 and 5,500 in 2012. The market high was 30,829 in 2005, he said.

Builders will take out 4,600 permits this year, an increase of 750 over 2009, Smith said. That should grow to 4,900 in 2011 and 5,400 in 2012.

Builders took out 32,879 permits in 2004, he said.

In other news

• The Greater Las Vegas Association of Realtors has elected new board members and officers starting in 2011.

President Rick Shelton’s one-year term ends Dec. 31. The new president is Paul Bell of Prudential Americana Group.

Other offices are: Kolleen Kelley of Realty Executives of Nevada, president-elect; Bob Lamonte of Better Homes and Gardens Real Estate Desert Properties, vice president; and Kathryn Bovard of Prudential Americana Group, treasurer.

Gary Banner of Commerce CRG, Cushman & Wakefield will become president of its Commercial Alliance Las Vegas and represent commercial real estate interests on the board. Walt Coffey of Windermere Anthem Hills was elected director heading its Multiple Listing Service.

• The Southern Nevada Chapter of NAIOP, the commercial real estate group, will hold a panel Aug. 12 on the state of the commercial brokerage industry. The speakers include Hayim Mizrachi of Prudential Commercial Real Estate; David Scherer of Grubb & Ellis; Bridget Richards of New Growth Commercial Real Estate; and Dan Doherty of Colliers International. Suzette LaGrange of Colliers is the moderator. The discussion starts at 7:45 a.m. at the Orleans. To register, call 798-7194.

• Prudential Americana will host a free seminar for homeowners who are underwater in their mortgages. The seminar is scheduled for 10 a.m. Aug. 21 at the Red Rock Resort. People will be able to talk to attorneys, financial advisers and mortgage specialists.

• Kreiss home furnishings has opened at Town Square with a showroom and design studio. The San Diego-based furniture company also has a location at the World Market Center that is open to the design trade. The Town Square showroom will be the company’s 19th retail location.