Since as far back as 2006 or so, people have asked me, sometimes tried to cajole me into advising them or even representing them in the acquisition of investment real estate in Las Vegas. The next time I say yes to one of those requests will be the first. I wish I understood the magnetic pull that market had on so many people. It’s done nothing but lead the nation in foreclosures and lose property value. Besides those two factors, it’s been a highly rewarding market to investors. 
I’ve literally had clients leave me cuz I wouldn’t help ‘em invest there. Twice I’ve had those same clients come back to me for help. I’m pretty good at what I do, but a magic wand has never been part of my arsenal. They lost everything they bought in Vegas.
Why do I bring this up now?
Simple — A new list just came out. (Hat tip to AGBeat.com) It listed the top 100 zip codes in the country for foreclosures. In the several years I’ve been avoiding that market like the plague, not only have foreclosures dominated, but values consistently fall. At some point you’d think it’d lose its allure, but if that’s begun to happen, I sure haven’t seen it. There must be something emotionally pleasing in buyin’ a relatively young, nice looking home for not much — never mind that it keeps goin’ down. The ‘high’ of having paid what appears to be the lowest price in a neighborhood in Vegas, seems to have a shelf life of about 6-10 weeks.
Hint: That’s not a good thing. But again, this is merely one man’s opinion.
Let’s do what we do here, and avoid the guessing game. This new list shows empirically that of the top 10 markets in the country, Vegas now sports six of those zips. They can now lay claim to have all of the top five in the country. They have six of the top eight.
Yeah, I’m sure Vegas will recover at some point. To those who haven’t survived and those who’re hanging on, good luck. To those who bought for cash based on Happy Days just around the corner? Please, I’m beggin’ ya, call me. If I can ‘t show you how to do almost infinitely better, I’ll say I can’t help ya.
Fat freakin’ chance of that if you have even a $70,000 net equity.
1. 89031 – Las Vegas, NV
2. 89108 – Las Vegas, NV
3. 89121 – Las Vegas, NV
4. 89123 – Las Vegas, NV
5. 89129 – Las Vegas, NV
6. 93535 – Lancaster, CA
7. 92336 – Fontana, CA
8. 89110 – Las Vegas, NV
9. 93536 – Lancaster, CA
10.30349 – Atlanta, GA
BawldGuy Axiom: Markets do what they do. They’re all influenced by the macro economic factors of the region. They’re all subject to objective, underlying local market realities. Ignore them at your predictable peril.
Falling in love ain’t for real estate investing. Hardcore, objective, boots-on-the-ground analysis is what makes the difference. That analysis says Vegas might not be the place for your hard earned investment capital. (I got an A- in understatement.)
Own a buncha cheap properties free ‘n clear? Wanna do a whole lot better? Call me at 619 889-7100, and together we’ll figure things out. Rather write me? Click on the Contact BawldGuy button up top. Have a good one.
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About BawldGuy
Jeff,
Almost feel like you wrote this column for me – I must admit I do love the Vegas market – that magnetic pull is pretty strong for me.
Though we are of opposing opinion, I value your sage words and keep them in the back of my mind (though not at the front of my engine just yet). Anyone who invested in 2006-2008 took a beating in that market. Perhaps I am “Vegas lucky” – but I wasn’t investing then – got in late 2009, and met you in 2011 when it was too late to know what I didn’t know.
The point of my comment is that getting your take on things is good for anyone – no matter what their current state of financial affairs. And I appreciate your diplomatic tack when we discuss our different strategies and choices. I learn and will continue to learn from you. Maybe one day I might actually take your advice.
With aloha,
Aunty
Hey Aunty — I saw the post regarding worst foreclosure zip codes, and couldn’t resist. I thought of you when writing it, but wrote it as a general warning. Those who bought recently have already lost value, and those who buy now, will be down this time next year.
Again, I remain mystified as to what the real draw is.
Craps, Aces with no Faces, and Pai Gow poker, for starters, lol! Great places to eat and play, too.
Hawaii people LOVE Vegas – it is in our culture. It is called the “9th island”.
Thanks for thinking of me and sounding the warning. Sorry, Aunty tends to be a bit deaf when it pleases her. However, I promise to tread carefully and do my best to protect our assets. It is why I read you and other gurus on a regular basis. You are one of the best!
Las Vegas is a tourist town and an income tax refuge for retirees. The economy is not diversified and there is no real industry. A lot of Las Vegas “money” is transient – second homes and visitors. Crime is high as is unemployment. Not a large middle class employment base there.
Phoenix has a more diverse economy and has a more solid middle class base. The real estate market is starting to recover – there is zero inventory right now. Multiple offers on everything and owner-occupants squeezed out by investors with cash, leaving a heck of a lot of unsatisfied demand. The $65,000 house I bought in March could be sold today for close to $80,000.
Bawld Guy and I disagree about the Phoenix market, but it should not be lumped together with Las Vegas, as it often is. Job creation and the pro business environment still favor Texas, but Phoenix should not be ignored.
Hey AI — We only disagree on chronology. I agree with your general description of AZ. Also, everything being relative, as good as AZ will be again at some point, I can’t see it matching the whole package offered by TX. If it ever does, I’ll be there too.
Vegas is a death trap for real estate, I actually see Utah taking off before Vegas.