Las Vegas Housing Market Price Depreciation Grows; Nevada Mortgage Borrowers See Opportunity

Home appreciation in Las Vegas has slowed dramatically from the torrid pace of two years ago, even turning negative in some areas of the valley last year, a local housing market analyst said.

Median existing home prices increased 3.6 percent valleywide to $285,000 in 2006, based on more than 90,000 existing home closings recorded by the Clark County assessor’s office in 2005 and 2006, Larry Murphy of Las Vegas-based SalesTraq reported.

Murphy’s breakdown of 52 ZIP codes in the Las Vegas Valley showed 35 areas with positive appreciation, seven unchanged and 10 on the negative side. These figures would affect anyone applying for a Nevada mortgage.

“These results fly in the face of the doomsday sayers who only a year ago were predicting that property values in Las Vegas would drop precipitously when the real estate bubble burst in Las Vegas,” Murphy said. “It also flies in the face of local analysts who have been declaring all year long that property values are dropping. The fact is that following the boom of 2004 when we saw appreciation rates of 40 percent, the only thing that has dropped has been the appreciation rate itself.”

Murphy has had to make adjustments over five years of reporting appreciation by ZIP code, “tweaking” his calculations to account for factors that can skew the numbers. For example, he separated luxury high-rise condominium market sales in ZIP code 89109, which includes the resort corridor east of the Strip, from single-family home sales to come up with 5 percent appreciation for 2006.

Murphy said potential home purchase loan applicants and/or current owners need to keep in mind when they look at the ZIP code appreciation map that a two percent increase in 89134, for example, does not necessarily mean that their specific home appreciated by two percent. It means that half the homes in 89134 appreciated by more than two percent and half the homes appreciated by less than twp percent.

Click here to continue reading this article from The Review-Journal.