Is Las Vegas headed for another 2008-style bubble? That was my thought after seeing this headline. Fitch Ratings posits that homes in the Vegas area are overvalued by 20% to 24%. That would make them the most overpriced domiciles in the U.S. To make matters worse, Las Vegas is trying to annex 39,000 acres of Bureau of Land Management terra firma, which would be good news for developers but very bad news for the endangered desert tortoise. The inflation in Sin City homes has been steadily creeping upward, from 10%-14% in 2016 to yesterday’s troubling report. After overreacting to the crash of 2008, home prices have — according to Fitch researches — overcompensated upward. The median home price of $315,000, last reached in 2006, could be matched later this year.
Citing other economic indicators, such as construction volume on the Strip and low unemployment, Coldwell Banker Premiere Realty‘s Chris Bishop lashed out at Fitch, saying its conclusion “makes no sense at all. We have consumers all day long, ready, willing and able to purchase homes in Southern Nevada.” He added that mortgage lending is more stringent than it was a decade ago. For Bishop, the cost of a home is right where it should be: “Prices would be inflated if there was nothing substantial in the economy to back it up.”
