Las Vegas tops the list of America's 10 Best Undervalued Places to Live in an article in U.S. News & World Report.
States such as Florida, California and Nevada that went through the wild runup in prices during the years of easy credit and buyer speculation have seen prices crash 30 percent to 50 percent from their peaks. Some of those places present real estate investors with their best shot at long-term value today, the article said.
"What we have seen is that those markets that became significantly overvalued (during the housing boom) are right now very undervalued," Jeannine Cataldi, senior economist and manager of IHS Global Insight, said in the story.
IHS Global Insight uses household income, population density and other data to compare a market's actual value with where it should be on a statistical basis. Employment, quality of life and other research were then used to determine America's best undervalued places to live.
The article quotes local housing analyst Steve Bottfeld of Marketing Solutions as saying that existing homes are priced at $77 a square foot, which is below the cost of building materials.
Although the market may be depressed today, several factors will support strong housing demand in Las Vegas over the long haul, Bottfeld said.
He cited the scheduled opening of MGM Mirage's CityCenter that will bring new jobs later this year. The enviable climate of hot summers and mild winters, along with the emerging downtown entertainment district, will continue to attract residents, he said.
"We are on the bottom of prices at this point," Bottfeld said. "There is no question that the residential market in Las Vegas is undervalued."
The median single-family home price in Las Vegas $140,000 in the first quarter, which IHS Global Insight considers 41 percent undervalued.
Contact reporter Hubble Smith at firstname.lastname@example.org or 702-383-0491.