Appraisal Market Segmentation Las Vegas / Henderson Nevada

If you are an appraiser or mortgage lender who is new to Las Vegas / Henderson Nevada you may want to read on, because there are many who don’t understand which segments of the Las Vegas / Henderson market currently (in 2017) and in the recent past have seen the most sales and generally generate the most appraisal assignments.  I’m going to work from my own (primary) sales data collected from various non-proprietary sources and while not 100% complete it includes a relatively large number of market sales and it is believed to be a good indicator.

I have grouped property sales into the following categories; vacant land, office (which includes medical office), retail, industrial, apartment, hospitality and other.  There were relatively few properties found to fall in the hospitality and other area and the other area was excluded from the following graphic. 

Notable, and expected, is the relatively large number of vacant land sales when compared to the other developed property types. 

The office sales, retail sales and industrial sales are relatively similar however the industrial sales market appears to be the strongest second finisher through the three years reviewed.  Apartment sales consistenly fell below 10% of total market sales in all three years, and that was the case in 2017 which is a partial year at this point in time.

Important for appraisers is the fact that there are many vacant land sales in any given year.  It is my experience however that as a percentage fewer of the land sales are appraised.  This is surprising since the vacant land market is the most volitale.  It is easy for owners, and even some appraisers, to miss the value of a vacant parcel by 10% or more.  That doesn't sound like a lot of money but when you are dealing with vacant properties with a typical market value in excess of $ 1 million dollars a relatively small error can cost someone a great deal of money.

The land market can turn around so fast that some appraisers, who are busy working on other property types, can lose touch with what is happening.  Enough research will bring them up to date but you don't want to make any statements about the land market without taking the time to look at the sales data.  It may be that residential land is exploding in value while no one seems to want any commercial land.

There have been periods when those who owned commercial land rezoned it for a residential use because the markets just favored residential development and builders were willing to pay a premium for it while there was little demand for commercially zoned parcels.  It's an unusual circumstance but it has happened in the Las Vegas market.

If you focus on the property types that see the most activity and market to that segment you are more likely to be successful in the appraisal business.

2017 Update: Having to research sales every day brings you around to a reality about the market segments and I wanted to correct a problem with this article regarding Apartments.  The total number of apartment sales appears in fact to be much higher than I have displayed in the graphic and more importantly sales, with unit prices exploding over $ 100,000 per unit, and some at twice that or more, average in the millions and some $ 100 million dollar sales have been noted. 

For more appraisal information contact Glenn J. Rigdon MA, MRICS, ASA is a Las Vegas / Henderson Nevada based appraiser who can be contacted via email or via his business website known as Appraiser Las Vegas  (http://www.appraiserlasvegas.com), or you can also click on “Contact Us” on the home page of this website or visit my public profile at LinkedIn at http://www.linkedin.com/pub/glenn-rigdon-ma-mrics-asa/1a/30b/879/

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