Friday
April 18, 2014

Another Housing Bubble Brewing in Nevada?

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Another Housing Bubble Brewing in Nevada?

Nevada up until recently had held a five-year streak as the nation’s “foreclosure capital” (recently overtaken by Florida), but the state has been climbing out of its housing slump. 

In Las Vegas, home prices have jumped 24 percent in one year alone and inventories are at a tight five-week supply. 

"Nevada's ready to turn the page," Joel Searby, a Florida-based analyst, told the Associated Press. 

But plenty of challenges remain, and some even worry that a new bubble is brewing. 

For one, some say that the state’s dramatic fall in the number of foreclosures isn’t really a sign of improvement as much as it is a postponement of many foreclosures due to recent legislation passed in the state that increased protocols and checks for the foreclosure process. The legislation is leading to more constrained inventories, they argue.

"There aren't enough homes going on the market,” says Victor Joecks of the Nevada Policy Research Institute. “That's absolutely creating an artificial, temporary bubble."

Keith Lynam of the Nevada Association of REALTORS® says he expects prices will eventually “soften” somewhat from what he considers their current inflated highs. 

Source: “As Nevada Housing Brightens, Some See Storm Coming,” Associated Press (Jan. 24, 2013)