Las Vegas real estate prices considered stable by price-rent ratio
Price-rent ratio is one good way to gauge whether a particular housing market's values are stable or not. The popular ratio is figured by dividing a city's median home price by its median annual rent. A pretty basic calculation that will actually say a lot. The national historical average has been 15, according to Marcus & Millichap, a California commercial real estate brokerage. That's where it again stood at the end of the third quarter of 2009, having retreated there from almost 21 where it had soared to during the housing bubble's climax in 2005.
By many real estate yardsticks, a price-rent ratio under 15 translates into a market where home values are considered quite stable. On the other hand, anything over it, and especially higher than 18, signals that prices remain soft and are likely to erode further. Unless a large down payment is used, going underwater - mortgage balance is higher than property value - in the coming months becomes a real danger.
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3 comments:
I referred few investment and realty blogs and can say that it will take start of 2010 to appreciate values again. Thanks for this post.
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Good post. It’s amazing how many realtors post complete junk. Some people spend zero time and effort on even the basic stuff like photography. Thanks for this amazing real estate blog.
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Thanks for providing really good information regarding real estate.
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