Economy & Real Estate Updates

Aerial view of residential neighborhood in northwest Las Vegas, Nevada.

September was another record setter in the Las Vegas valley! Both resale and rent values increased on average, adding to an already record setting year. The median price of a home rose to $406,500 according to Las Vegas Realtors. Rent values rose on average between 3-9% (Zumper).

Though Las Vegas saw an increase in resale values between August and September, the fact is, it’s a far cry from the appreciation seen thus far in the year. As a matter of fact, the median sales price remained at $405,000 the two months prior, barely making an increase during September.

In essence, the market is taking a much needed break. Constant and significant appreciation can lead to over inflated prices which is not healthy for a market. Already, many individuals are out priced of a home, compared to just 6 months or a year ago. Fortunately, interest rates are remaining low, allowing many to to still qualify for high mortgages. And for the time being, rates should remain that way.

However, what does this slow down mean for the market? At this time, it is simply means that the market is pumping its brakes a little due to significant appreciation over the last year. Additionally, as the end of the year approaches, a seasonal slow down is typically expected.

Of course, a real estate market is based on many factors – economic climate, jobs, consumer confidence and interest rates, to name a few. These can affect a real estate market in a positive or negative way. For the time being, indicators appear to point to continued appreciation, though modest. Inventory continues to remain low, both in homes for sale and for rent. And most buyers are still in the game.

Aerial view of residential area and park of Las Vegas, Nevada with clear skies

The Las Vegas housing market continued a hot streak throughout August leading into September. The median sales price of a single family home was $405,000 (Las Vegas Realtors), matching the prior month. The median list price was $422,000 according to Realtor.com, a possible indicator of continued price appreciation. More and more buyers from out of state, such as California, have been relocating to Las Vegas, investors are purchasing properties and first time home buyers are trying to eek their way into home ownership. This heavy demand has caused a strain on an already reduced inventory. As a matter of fact, the available inventory of resale homes is down 34.6% from August 2020 according to Realtor.com.

As discussed in prior blog posts about the real estate market, a low interest rate combined with low available inventory has driven prices up as this has stretched many home buyers budget. As a result, home buyers are willing to pay more while saving on monthly interest charges. All the while, homeowners are putting more cash in their pockets when selling their properties.

The rental market has also seen it’s fair share of appreciation. Rental rates are skyrocketing within the Las Vegas valley, allowing many single family homes to rent between $1.25 – $1.50 / square foot or more. These are significant gains, especially when compared to just a few years ago when many properties were leasing far below that. Again, a limited inventory combined with increased demand is causing landlord’s to raise rents. For landlord’s, this is a prime time to capitalize on their investment properties and raise rents. For investors looking to enter the market, the increase in rental rates is good news. It allows for higher returns against higher resale values.

While it may be tempting to sell a property that has much appreciation, it is also good to consider what your property may rent for in today’s market. Some landlord’s have decided to sell because they weren’t aware of the rent potential of their properties. So, before selling, consider all of your options.

While it is difficult to predict how things will go long into the future, the Las Vegas real estate market has proved resilient and even surprising. It has caught many homeowners and landlord’s off guard – in a good way! As a result, investment properties today are doing what many have wanted for a long time – providing a solid return on their investment.

 

 

 

 

Aerial view of Las Vegas, Nevada, U.S.A.

The real estate market in Las Vegas continues to defy expectations. With inventory slim and buyers in full ready-to-buy mode, prices are rising. The median single family home sold for $405,000 in July 2021. Most properties are selling quickly too, especially when priced less than $400K. We are seeing about a 20% year over year appreciation in the valley, and there appears to be no stopping this train. While the pandemic continues to exact its toll on the economy to a certain extent, real estate seems almost immune.

Of course, affordability is the next point of discussion. Already, many are being forced into making compromises because of this spike in price. Some are choosing to look into smaller homes or consider condo’s or town homes due to their still relatively lower price point, though prices are rising steadily on those properties as well. Others are deciding to rent and wait it out, however, rent prices are sky rocketing as well. And thus this creates a dillema.
This significant increase in housing is causing some to move in with others, such as family. Others are simply packing up and moving to areas less expensive. The next couple of years will no doubt show a migration of individuals to more affordable housing spots, especially as more work is done remotely.

In the meantime, homeowners and Landlord’s are the ones benefitting from significant property and rental appreciation with no end in sight.

The city of Las Vegas at dusk, with a golf course among a suburban neighborhood in the foreground. Nevada, USA.

It wasn’t that long ago that some doubted the local Las Vegas real estate market, wondering if it was a bubble in the making, whether it was sustainable and if it would all come crashing down. Yet, here we are. June 2021. Las Vegas is returning back to normal. And the real estate market appears to be pandemic and recession proof. On the other hand, investor confidence is high.

Consumer Confidence

The consumer confidence index shows that since December 2020, consumer confidence is on a steep upswing. As a matter of fact, last month, May 2021, the index registered a value of 100.01. If your not familiar with the index, don’t worry – most of us aren’t experts on it. However, the consumer confidence index pretty much summarizes how people feel about the economy – whether they feel inclined to save because of a poor economic outlook, such as a looming recession due to unemployment numbers or layoffs, or if they feel they confident about the economy and as a result, inclined to spend money.

So, what does 100.01 tell us. Well according to OECD.com, which tracks the metrics, “An indicator above 100 signals a boost in the consumers’ confidence towards the future economic situation, as a consequence of which they are less prone to save, and more inclined to spend money on major purchases in the next 12 months.”

What does this mean? That people will be looking to spend money, which should further contribute to a recovering economy, lower unemployment and strong demand. This usually spills over into the real estate market. And with inventory continually low and demand high, prices have been doing what we expected: rise!

As of May 2021, the median price of a home in Las Vegas topped out at $385,000.

As in prior months, cheap money due to low interest rates was a big contributing factor. However, Las Vegas is also entering a stretch where hotels and casinos are reporting steady and increasing income, the airport is logging in more travelers and more and more places are hiring.

So, the foreseeable future appears to be filled with consumer buying confidence and, more likely than not, a continually appreciating Las Vegas real estate market.

A blue futuristic train passing through the high-rising buildings in a modern downtown district – Las Vegas

As more and more of the U.S population get vaccinated and COVID numbers down significantly from last year, Las Vegas is getting a breath of fresh economic air. It is clear that more and more people are travelling as the Las Vegas strip is getting busier and busier. As a result, hiring is starting to ramp up at hotel’s and casino’s, signaling more and more demand. More passenger traffic is also reported through McCarran International Airport.

Additionally, in just a few short months, one of the largest casino/hotel developments, Resorts World Las Vegas, will be opening their doors, hiring some 6000 people along the way! This will be a significant boost to the Southern Nevada economy, which has struggled to add jobs since March 2020. This and other developments will also affect small businesses, who many times support the tourism industry in various sectors.

Economists have stated that Las Vegas is poised to come out of the COVID economic slump stronger than before. And that does appear to be true. Many people are eager to travel and vacation this year, especially as the Nevada economy plans for a full re-opening in June. This will lead to money being poured into various sectors of the economy, driving new business. In the meantime, the Las Vegas housing market has also defied expectations throughout the pandemic, showing its resiliency. And Las Vegas continues to attract new business and new residents, despite the economic hardships experienced.

With such positive developments thus far, as we continue to see travel increase, new businesses establish themselves and new residents move in, we can expect the economy to pull through and exceed the expectations that many had.

Panorama of Las Vegas, Nevada, USA

The Las Vegas real estate market continued to see appreciation and demand as prices hit a new record high – a median sales price of $355,000 in the month of February 2021. As in previous months, low inventory and interest rates contributed to the rise in real estate values.

Is inventory expected to rise anytime soon? That’s difficult to tell. For month’s, it was expected that inventory would eventually rise, potentially curbing the drastic increase in real estate values. However, as spring approaches, the Las Vegas housing market continues to have a record low of available homes for sale. Especially is that true of properties under $300,000.

A quick search of local Multiple Listing Service here in Las Vegas reveals only about 1000 currently available homes up to $300,000! That includes condo’s and town homes. If you remove those and only look at single family homes, you end up at 382 homes throughout the entire Las Vegas valley, which includes North Las Vegas, Henderson and Boulder City! It is very apparent that inventory remains low, leading to bidding wars in that price range.

In total, the Las Vegas, Henderson, North Las Vegas & Boulder City housing market has less than 2000 single family homes in all price ranges. Total inventory including condo’s and town homes is 2687. As long as inventory and interest rates remain this low, coupled with current demand, we can expect prices to increase at a modest rate, which is what most expect throughout 2021.

If your looking for an experienced Realtor to help you navigate the real estate market, contact our Investor Team Sales Division at 702-755-5131.