Q: In August 2007, I bought a home in the Southern Highlands area for $282,000, which was valued at the time of purchase at $305,000. Currently, this home is worth about $160,000.
I am not sure if I want to keep this house anymore, because now I am upside down $100,000. The bank does not want to modify mortgage loans for investment properties.
I was wondering if my home in Southern Highlands might go down to $80,000 or below. When can we say we are at the bottom? Or how low will it go before it starts to climb up and will it climb up in the next five to 10 years?
— N.S., Las Vegas
A: The short answer to that big question is I don’t think anyone knows for sure. I wish I had a crystal ball that could tell me when Southern Nevada home prices will reach their lowest point. But, since I don’t, I can only offer you an educated guess.
My experience as a real estate professional here in Nevada for nearly 30 years suggests that we’re awfully close to the bottom of the local housing market.
Here are some of the reasons why I believe that.
First, homes are selling at a very brisk pace and have been for many months.
Second, the number of homes listed for sale here has been stable for more than a year. Like most housing market experts, I view this as a good sign.
Third, the federal government is going to great lengths to offer tax credits to first-time buyers and to encourage people to buy homes at a time when housing costs are already as affordable as they’ve been in many years and mortgage interest rates are at all-time low.
Finally, I think it’s telling that you can now buy a very nice home in the Las Vegas area for less than what it would cost to build that same home today.
You mention that you paid $282,000 for the home you bought in the Southern Highlands area in August 2007. As we know today, you bought this property near the peak of the market. You also suggested your home was really worth about $305,000 when you bought it. That’s arguable since any property is really only worth what someone will pay for it.
Making predictions about the housing market, or the economy in general, is an inexact science. But history shows that real estate always appreciates over time. Being an optimist with great faith in the long-term future of Southern Nevada, I think it’s a good bet that local home prices will appreciate again within the next five to 10 years.
If you can afford to hold on to your property for years to come, I think you’ll see that.
Sue Naumann is the president of the Greater Las Vegas Association of Realtors and has worked in the real estate industry for arly 30 years. GLVAR has nearly 14,000 members. To ask her a question, e-mail her at firstname.lastname@example.org. For more information, visit lasvegasrealtor.com.