Vegas beats tough odds

Buying real estate can be a gamble, but punters right now are betting on Las Vegas.

The resort city posted the highest gains of all United States markets in the latest S&P/Case-Shiller index of property values, climbing another 2 per cent in February. This took the year-on-year increase to 17.6 per cent on the index, ranking third nationally behind Phoenix (up 23 per cent) and San Francisco (up 18.9 per cent). The gains prompted David Blitzer, chairman of the S&P index committee, to note: "Housing continues to be one of the brighter spots in the economy."

For existing homes and condominiums, not including new builds, the price increase is even more pronounced. According to latest data from the Greater Las Vegas Association of Realtors (GLVAR), existing home prices in southern Nevada, encompassing the Las Vegas Valley and surrounding cities in Clark County, are almost 31 per cent higher today than a year ago.

Whichever methodology one chooses to go by, this upward trend is good news for property owners in a city once tagged as "ground zero of the housing bubble". Las Vegas was about the last market in the US to be hit by the recession, but it also fell the furthest. Prices plummeted by more than 50 per cent below their 2006 peak and, four years ago, at the market's lowest point, more than 80 per cent of the homes sold were foreclosure or bank-owned sales.

Now, the tables are turning. As prices rise and the time on market shrinks, GLVAR reports that more homes are being sold by "traditional" sellers - as opposed to lenders, who are responsible for the short sales and foreclosures that dominated the market in recent years. Dave Tina, GLVAR president, says: "In fact, for the first time in years, traditional sales have accounted for more than half of all local home sales so far in 2013."

Patrick O'Neill, who markets US property to Asian investors through his company, The O'Neill Group, says overseas interest is also piqued. "Many buyers who missed the price drops in other cities like New York and San Francisco are now scrambling to find the remaining pockets of opportunity. Las Vegas is one of the last markets to recover, forcing bargain-hunters to bear down on the remaining inventory."