Will the Las Vegas real estate market crash again?

Hello. Welcome to Todd Miller TV. Today I want to talk about this theory out there that we’re going to have another crash pending in the Las Vegas real estate market. I’m just going to do this with a very simple explanation and just show you a simple scenario because there’s so much information out there and so many things being talked about.

It’s very confusing to really figure out what to do. So we will start with a very simple graph. You probably have seen it. I’ve got it on my website. At the top here is dollars, so sale price of the house. Over here is years and time.

So this blue line here is the baseline and what this blue line represents is the long term normal housing appreciation in Las Vegas and we followed it for 30 years. You can see that up to this point, we were on it. We were just maintaining the normal price appreciation, two to three percent a year. It was all good. Will the Las Vegas real estate market crash again

Then what happened here is we had this boom phase here. So all right, boom. The boom phase and the boom phase caused us to go above this long term line. It wasn’t sustainable. So what happens, we blew through it down here to where we are now. So this is what has got people concerned. What has got people concerned is this upswing.

So what’s characterized as upswing? Well it looks like this upswing. It’s starting to take off. So people are going oh, whenever prices take off, it’s a boom and the boom has crashed. So that’s why they’re saying this. OK? So what they’re saying here is this is a crash, right?

This is nothing like this and this is why. This is above the line. This is below the line. So here’s the thing. The market is trying to get back to here. This is equilibrium. It’s trying to get back to that point. It was there for years and years. So let’s say it does go up and come down a little. That’s great. But look, it’s always going to try to get to that line. So here’s a very simple thing you can follow.

If you’re above this line, you sell. If you’re below this line, you buy. That’s it. It’s that simple. This is a market where you need to sell and get rid of this risk. This is a market where you don’t have a lot of downside. There’s really no downside but we’re down here already.

Will the Las Vegas real estate market crash again?

If you go back, you have to go back to like way back in time to find when prices were this low. Not adjusted for inflation. They’re probably lower than they’ve ever been. I mean ever been.

So the fact that they’re coming up right here is great. We don’t know what’s going to happen in a year or in two or five years. We didn’t know here this was going to happen but we do know this. We’re trying to get back to this line. That’s the normal real estate market in Las Vegas. That’s where we’re trying to go.

Prices, we probably will have some more inventory come out of the market. Who knows what that’s going to do short term, but I don’t believe that we’re going to bust again. I don’t believe it’s going to crash until we get to this line.

So that’s my update for Will the Las Vegas real estate market crash again today and hope to see you on another video. Thanks.