Is the Las Vegas Real Estate Market Biased?
Las Vegas is a pretty eclectic mix of people of all races and types, but if you are talking about home buying, it is a little more unbalanced than some may think. Zillow found that minorities often get rejected for home loans much more often than whites in Las Vegas, which is not the case for black and Hispanic applicants in the rest of the country. As far as Asian applicants, almost 15 percent of them were denied in 2013, which was slightly higher than the national rate. White applicants in Las Vegas were denied 11.2 percent of the time, compared to the 10.4 percent national rate. These differences may not seem like much, but when you are talking about thousands of applicants, it adds up to a significant number of denials.
Is the Las Vegas real estate market racially biased?
Reasoning for Disparity in Home Loan Approval?
Many people may link this disparity solely to race, but it is also important to point out that nationally, black and Hispanic applicants make an average of $20,000 less a year than the white applicants, which could have a hand in the higher denial rates. In Las Vegas, this difference can be also be attributed to the fact that minority communities saw a huge increase in home values before the crash and huge drops during the housing crisis, which left many of them in a foreclosure or short sale situations, which led to lower credit scores, etc. No matter what the reason for the disparity, there are sure to be ripples felt in the real estate market due to it.
Real Estate Ripples Felt
“While many of the disparities between the experiences of white communities and minority communities during the housing boom and bust can be explained by plain differences in finances and geography, it’s clear that the housing playing field remains strikingly unequal in this country,” says Zillow chief economist Stan Humphries. In Las Vegas, the home values in the minority communities continue to rise and are expected to rise faster than in other areas over the next year. This could leave many homes empty, as homebuyers that want to live in this area will not be able to qualify for a home loan for a number of different reasons.
Real estate professionals will need to be able to look at multiple loan options to aid these home buyers to not only find the right home at the right price, but also to try to find them a loan option and get them into a home at a fair interest rate. Hopefully, this difference in loan approvals will begin to move more into balance with the rest of the nation. A good credit rating, substantial down payment, and the right home at the right price is still something that is at a high premium no matter what race you are. Las Vegas real estate is as varied as people are, which is why it is important for realtors to be able to vary their approaches to selling, as well as loans.