Vegas Housing Begins to Tank

As I predicted long ago, the Vegas housing bubble is starting to collapse.  The local newspaper reports on the frightening statistics here. 

Particularly gratifying to me is listening to Larry Murphy eat his words.  Murphy tracks local real estate and used to send out these neon-yellow emails saying how there was no housing bubble in Vegas, how prices will continue to rise, etc.  Now he admits that he "underestimated the slowdown." 

Again, the problem here is education.  Housing has gone through cycles and bubbles for over a hundred years in the US.  Here's a good site that shows how local real estate markets act through various cycles.

Housing bubbles can either burst or deflate.  The last housing bubble in California in the 90s was more of a slow leak.  However, the current housing bubble in California and here in Vegas has a greater chance of bursting this time around.  The main reason is the use of the new riskier mortgage loans, like the many ARMs that have been taken out over the last couple of years. 

I'll go out on a limb here and make a prediction: the median home price in Vegas now is around $290k.  I bet that next year in August the price will be down about 5%, or to roughly $275k.  And I don't think that will be the end of the decline either, but perhaps only the beginning.