In the last blog post, we took a look at the “boom town” aspects or pros of the Las Vegas real estate market.  Today, we’ll venture in to the possible pitfalls of Vegas real estate.  So, what are the cons and how and what do future prospects look like?

For quite some time, Las Vegas was growing so fast that the housing stock just couldn’t keep up with the rapid growth.  But now we know that builders and developers have definitely caught up with demand in housing.  The economy is also slowing down slightly.  Consider the combination and you’ll see that the next couple years could be turbulent for residential developments especially.

Additionally, due to the increase in subprime mortgage problems, distressed properties have also greatly increased in the Las Vegas market, following a national trend.  This can mean bad news for a market’s overall property values.  On the other hand, it opens the market wide open for bargain hunters and encourages reinvestment.

While the Las Vegas Real estate market will probably worsen before it gets much better, many are confident that the Nevada economy will quickly end up back in hyper growth mode again very soon.  If this is the case, the housing situation will level out in no time at all.  The big picture a few years from now is likely to show property values skyrocketing, making a small correction, and then continuing to grow at a steady pace.

As the federal government is selling and trading parcels of the land it controls surrounding Sin City, land values in the Las Vegas area are going through some shaky times too.  The release of this federal land into general supply affects the property market substantially.  A majority of the effects would be felt in the commercial arena as the deals are mostly structured to avoid releasing for residential zoning.  We’ll see how this all plays out in an otherwise strong and healthy commercial real estate market.

All things considered, real estate in Las Vegas will remain strong due to the massive economy created by casinos and the hospitality and tourism industry.  The job growth prospects continue to be excellent for Vegas also.  There’s always going to be ups and there’s always going to be downs, but after a minor recession, Las Vegas real estate looks like a safe bet.