Economy & Real Estate Updates

Panorama view of Las Vegas at sunset in Nevada, United States of America

As the economy has slowly re-opened in Las Vegas, due to certain restrictions lifted, so has the interest of buyers in the local market. This was clearly evident in June, as the median price of a home sold through the MLS was $325,000, a year over year increase of about 7%. This was an increase of $6,000 from the prior median sold price in March of $319,000.

These figures go to show a couple of things. First, as people returned to work, this ignited a demand for housing. It really shows how crucial the local hospitality and service industry is to the housing market. Even though real estate prices did not see a noticeable decrease between March and June, the slow down in activity was a clear indicator.

Second, with real estate values holding during an economic shut down, it really showed the stability of the Las Vegas housing market to be able to absorb a significant event, such as this. With prices appreciating at a modest rate, this prevents a bubble from forming and significant fluctuations from occurring when an economy shifts. No doubt, current low interest rates also play a role in keeping prospective buyers motivated and ready to buy.

As the economy continues to recover, with more tourists coming for a visit, we can expect the real estate market to keep thriving.

Simplifying your life can give you more time for what you enjoy

Many people dream about the day they get out of debt. The day they pay off their credit cards. The day they pay off their car. The day they pay off their house. Financial self help books abound in advice on how to get rid of debt. Yet, the truth is, Americans are consistently in debt. Why the desire to be debt free?

Most realize that having no to little debt means they can semi or completely retire, reduce their work load and spend more time with their loved ones. However, it seems with each passing year, more and more Americans acquire more debt. They trade out their nearly paid off cars for new ones. They up-size to a newer and bigger home. They make large purchases on impulse, charging them to credit cards. Even when some have cash available, they end up spending it on comforts and luxuries. While each person can make their own decisions, if your goal is to simplify your life, work less and even retire early, getting out of debt is a key piece to the puzzle. How can you do that?

First, be reasonable with your purchases. Evaluate if you actually need something. Is it a necessity or a luxury? Don’t buy on impulse. Wait a few days after thinking about a purchase to see if you still feel the same way. You might be surprised.

Second, see if you can keep that car that you have nearly paid off. If your car is still running well and you’ve been maintaining it, be weary of clever marketing tactics! Remember, a new car loan is typically for 60 months or more – yes, that’s 5 years! Some even allow for 72 or 84 months – 6 or 7 years! These are significant debts to think about carefully!

Finally, a house payment is the biggest expense that someone can take on. If you have a house payment, you can do a few things. First, see if refinancing can save you money due to lower interest rates. Can you refinance with a 15 year loan? Can you make additional principle payments to help pay your house off faster?

Remember, the more debt you have, the more you are subject to economic changes. Loss or reduction of income can seriously affect if you can meet your obligations. Additionally, if you plan on working less, retiring or simply having more time, getting out of debt is something to consider.

las vegas home rental

“A beautiful luxury home in a suburb of Las Vegas, Nevada.”

As the economy shut down in March, many feared what would happen to the real estate market. With each extension to keep the economy closed, many feared a complete economic collapse and drastic changes in resale and rental values.

Fortunately, the drastic changes many feared never came. Granted, the real estate and rental market did experience change. For example, tenant occupied properties cannot be readily shown due to government imposed restrictions to limit the spread of COVID-19. Additionally, with many being furloughed or laid off due to business closures, demand for real estate dropped off significantly, especially when it comes to home buying.

Even as home prices dipped slightly, they appear to be showing signs of appreciation again as the economy re-opens and people get back to work. Additionally, tourist activity in Las Vegas appears to be drumming up as more hotels and casinos have decided to open up to accommodate the demand. All of these are excellent signs. Real Estate rental values have remained relatively steady as well, with some fluctuation but overall consistent.

What will the future hold for Las Vegas real estate and rental values? For the remainder of this summer, it appears that values should hold stable, with relatively minor fluctuation. We can expect the market to attract more buyers but also more sellers. Of course, much will depend on the big picture. How will the economy throughout the country hold? How will the spread of COVID-19 affect business growth? At what rate will tourism increase to allow even more people to return to work? Fortunately, even after 2.5 months of closures and a high unemployment rate, Las Vegas continues to maintain its real estate value, a trend we look forward to seeing into the future.

Many rental property owners and those contemplating entering the rental market are now anxious about what will happen to the rental market – rent values, rent collection, etc. The truth is, the current COVID-19 pandemic is uncharted territory for most real estate professionals. We are constantly hearing about fluctuations in the stock market, unemployment reports and stimulus benefits. We are also learning that evictions are on hold and late fees can’t be charged (at least here in Nevada).

But what will this ultimately mean for the real estate market? Specifically the rental market?

The measures being taken by government officials to put evictions on hold and not charge late fees clearly indicates that the goal is to maintain relative stability for folks. To be able to get through this pandemic with as as little interruption as possible. On the flip side, many mortgage companies are offering relief to homeowners who can’t make their mortgage payments rather than charging them late fees and initiating foreclosure proceedings. Stimulus benefits and supplemental funding of unemployment benefits are intended to carry folks through this period of time as well. It appears that the plan and hope is that once the pandemic passes and things begin to resume to the way they were previously the economy can rebound without having the added stress of an untold number of evictions and foreclosures, which would be detrimental to the real estate and rental market.

In the end, it really depends on how long the shut down will go on for. That will indicate what we can expect with rental and sale values and demand; whether or not folks will be able to maintain relative stability during this time and once things pick back up again resume their lives without too much loss and have jobs to get back to. In that case, we hope that the market will prove overall stable. However, if we have long term closures, lack of benefits or other unforeseeable repercussions, we may have a different market to prepare for.

It does appear, though, that the ultimate and overall goal right now is to keep people status quo to prevent major shifts in the real estate market so that once an economic rebound occurs, the market can continue to grow and thrive.

How does this affect tenants?

There are provisions for tenants who land on hard times and only able to pay partial rent, such as waived late fees and postponement of evictions, which were authorized by government officials.  Additionally, many homeowners are willing to assist tenants during this time.  However, rent forgiveness is not obligatory.  Assistance may come in the form of rent postponement.  This means that eventually the postponed rent will still be due.  Thus, if a tenant can afford rent because their job has not been affected or has the means to pay rent, it would be in the tenants best interest to continue making their rent payment.  Many homeowners have mortgages on their rental properties and so, a lack of rent means that they may have to resort to other means for payment or qualify for assistance from their mortgage company.  Additionally, many homeowners may have also lost their jobs.

Ultimately, predicting what exactly will happen is dependent on many factors. Unfortunately, at this time, it is hard to say with any certainty what will happen.  We hope that this situation will be temporary and everyone can find financial stability sooner than later and we can get back to having a thriving real estate market.

In view of very recent developments nationally and internationally with COVID-19, it is safe to say that the world has turned upside down. Panic buying, social distancing and coronavirus have become everyday words. Beyond that, many businesses and government offices are closed for business. Talk of a recessive economy are gaining momentum.

As a result, the Fed has cut their interest rate even further in order to build confidence in society and as a result keep banks lending. However, the interest rate for home loans has actually ticked upward. In fact, just this month alone, interest rates went from an average of about 3.30% to nearly 3.75% (on a 30 year fixed loan). Many people are interested in a refinance or even purchase of a home because of how low interest rates are. So, why did rates go up?

Well, mortgage rates don’t necessarily follow the Feds interest rate always. They will adjust to a certain extent, however, they typically follow 10-year bond yields, such as the treasury note. The 10-year treasury note actually went up this month. This was due to the fact that a major stimulus package was approved in view of COVID-19, adding to the national debt and affecting the yield market.

However, rates will continue to fluctuate. Many people are applying for refinances right now or new loans and so banks and mortgage companies are back logged, affecting mortgage rates. The fed and other government agencies will most likely continue to implement new measures to help the economy, which will have an effect on this also.

While interest rates are still historically low, we can expect continued change due to market volatility. The quicker we see stability, the better the economy. The better the economy, the more confidence the consumer will have.

Contributed by Nicklin Property Management.

The Las Vegas economy continues to prosper, in a large part due to the vast amount of tourists that visit the city. These tourists, in turn, support various service industries, such as the many hotel employees and individuals working in the transportation, restaurant and special events sector. According to the Las Vegas Convention and Visitors Authority, nearly 400,000 jobs are supported by tourism. Over the last few years, Las Vegas has seen more and more domestic and international travelers come through the city, adding to a robust economy.

In 2019, over 42,000,000 tourists visited Las Vegas, with over 6,500,000 of those attending conventions. Revenue from these tourists totaled into the billions of dollars.

McCarran International Airport likewise reported records. In 2019, McCarran saw over 51,000,000 passengers travel. More and more routes were announced through both domestic and international carriers and Las Vegas became a hot spot destination.

All in all, the last few years have seen tremendous growth in many areas for the Las Vegas valley, a far cry from the economic situation a decade ago.
Contributed by Nicklin Property Management.

Sources: Las Vegas Convention and Visitor Authority & McCarran International Airport

Las Vegas continues on its economic boom.  Each week we hear of a new project taking shape, adding to the local economy.  Las Vegas is expanding – attracting new residents, businesses and high profile projects.  The initial investments total into the billions.  The residual will impact the local economy for years to come.  Here are some noteworthy projects that are in process or planned.

The Drew (formerly the Fountainbleu)
Located on the north end of the Las Vegas Strip sits a nearly 70 story unfinished tower, a symbol of the great recession. After trading hands in the recent years, reports are circulating that the owners of what is now known as “The Drew” are close to securing financing in order to finish this huge project. Though from the exterior the tower appears to be somewhat finished, there is much to be done inside and around the property. The project is anticipated for completion in about 3 years. Once finished, it will be a spectacular tower that will add life to the north end of the strip. As it stands currently, it will be the tallest building in Nevada outside of the Stratosphere Tower.

Resorts World Las Vegas
This multi-billion dollar resort, sitting across from the Wynn Las Vegas, has taken shape after sitting dormant for a few years. This luxury resort will feature some 3500 rooms, a 5000 seat theater, pool and spa complex and be the most expensive resort to be built in Las Vegas. It will add a tremendous economic impact to Las Vegas.

Wynn Convention Center
Wynn Las Vegas recently opened their expansion to the Wynn Convention Center. At over $400 million in cost to complete, it sits close to the golf course and offers extraordinary views to those gathered for conventions. The extra convention space is sure to attract more business to the Wynn, but also to the city, adding to its economic impact.

Other Convention Spaces to Open
Ceasars and The World Market Center are also in the middle of adding convention space to their existing facilities. Caesars is scheduled ahead of the World Market Center. However, both new convention facilities will add nearly 1 million square feet of new gathering space in Las Vegas, paving the way for additional business ventures.

New AHL Arena
The Vegas Golden Knights have pursued a new arena for their AHL affiliate to be located in Henderson (off Green Valley Parkway). This new arena will allow a designated facility for the AHL. This is in addition to the new Henderson Community Ice Hockey Facility that is currently under construction.

Raiders Practice Facility
In addition to Allegiant Stadium, the Raiders are in the process of constructing their practice facility in Henderson. It will feature 3 practice fields, theater, cafe and a three story building. It is located close to St Rose Parkway and the Henderson Executive Airport. The cost is estimated at under 100 million dollars and construction should be completed by the time the next NFL season begins.

New Google Data Center
Google is in the process of constructing a $600 million data center in Henderson which will employ a number of people in a variety of different roles.

Dream Hotel
A recent announcement was made to construct a new hotel on the south side of the Las Vegas Strip. It will feature luxury amenities, 450 rooms and a pool complex. It will add an economic boost to the far south end of the Las Vegas strip and the businesses that surround it.

Virgin Train Station
As plans appear to progress on linking California with a high speed rail from Las Vegas, it was announced that a nearly 300,000 square foot train station will be constructed south of the Las Vegas Strip. It would feature ticketing areas, shopping and office space. This along with the rail connecting California is sure to bring an economic impact as more people can reach Las Vegas in a shorter time – 90 minutes.

In recent years, Las Vegas has materialized many projects and visions that for many years seemed out of reach. As Las Vegas continues to grow as more than just an entertainment mecca, it will attract new businesses and ventures that which will lead to continued economic progress.

Contributed by Nicklin Property Management.