The Moodys/REAL Commercial Property Price Index for the western region continues to post declines, which have accelerated in 2009. A lot of these values are back to 2004 and 2005 levels. For Las Vegas, there are so few commercial sales transactions its hard to construct an index. We can make some assumptions however and we view some property values to be back to values before 2004. As we have noted in previous posts, such as the "commercial value disconnect" some sellers believe what they own is worth more than what we know buyers are willing to pay. There are companies that want to acquire commercial real estate (CRE) but they have to factor in greater uncertainties in rents and vacancies. Further, a lot of CRE is stuck, either by banks that can't take the ratio hit or by the FDIC which is determining how to sell the assets. Meanwhile there is some guesswork in CRE valuation.

Cities like Las Vegas, Miami and Phoenix saw disproportionately large increases in prices during the bubble years but have corrected extremely fast. Now, according to sources sucha s Forbes, that velocity of price declines has put Las Vegas at the bottom faster than other large metros. The bottom does not mean "recovery" but if the assumption about a bottom is correct, its surely a welcome sign, especially in light of improved affordability. Currently prices, combined with low mortage interest rates, makes home ownership realistic for normal households. Now the bulk of the price distribution for homes better matches the income distribution for Las Vegas families. To check out the Las Vegas Sun article, Click Here.