Investors are blamed for fueling the boom that saw the median Las Vegas house price go from $164,000 in 2003 to $275,000 in 2005, so it is no wonder people are nervous that nearly 50% of houses in Las Vegas are currently being sold to investors. However, the current crop of investors seems smarter, and is buying to hold for rental income, rather than flipping to capture rapid capital appreciation.  So are investors good for the Las Vegas residential market?

There is certainly an over-supply of homes in Las Vegas and these investors are helping stabilize prices. They are also providing rental units for those that are no longer able to secure mortgages.

Investors are being criticized for blocking first time home owners from entering the market as they are often cash buyers and are thus given favorable treatments by the banks. It is difficult for a homeowner buying with financing to compete against cash-rich investors chasing REOs. Also, not all of these investors are long-term as 3.7% of houses sold in February had been sold less than six months prior i.e. they were flipped.