Las Vegas and Henderson Rental Housing Market Articles

Spectacular shot of Las Vegas suburbs sprawling across the Mojave desert. Real estate properties fill up the arid terrain leading up to the city of Las Vegas.

The Las Vegas real estate market continued to exhibit resilience amidst COVID restrictions, high unemployment and a re-instituted eviction moratorium (though this one is more specific and different than the previous one). The median price of a single family home was $345,000 according to the Las Vegas Realtors association. Year over year, this was a 10% increase in values, an extraordinary feat considering the type of year 2020 was.

Yet again, limited inventory coupled with record low interest rates motivated investors and first time home buyers to take advantage.

What does 2021 hold in store?

Time will tell. However, the outlook appears to have appreciation in store – at least for now. The market appears to have relative stability, interest rates are projected to remain low and inventory remain tight. As a matter of fact, the Las Vegas Realtors association reported just over 3,000 houses with no offers ending the year. Many buyers are coming from out of state, such as California, and purchasing properties in Las Vegas. Home values are expected to continue to rise throughout the year, which is good news for homeowners and landlords. For folks looking to buy, they will have to be prepared, determined and aggressive to find a home.

Reflecting on 2020 and what it meant for real estate in Las Vegas

As we transition to a new year, we look back on a year that is, by all standards, far from any norm for any of us. While the year started on a “normal” note, it quickly changed to one of mask wearing and economic instability all amidst a rising housing market. Really, it has defied all expectations. And it has made society adjust to a new normal.

At the same time, it has created opportunity. Opportunity for homeownership for many due to a declining interest rate. Buyers are eager to find a property, yet inventory is limited and prices are consistently rising, hitting new records. This in itself has defied logic due to the ongoing pandemic.

As Las Vegas reels from the sudden economic impact of COVID, it is encouraging to see homeowners help tenants who were affected by the fallout of the pandemic by reducing rent and express a genuine concern for their well being. Kindness has been demonstrated by many.  Property management took on a more personal approach for many landlords – something that many never counted on. Yet, the challenges experienced and subsequent reactions by both landlords and tenants have gone a long way in reducing hardships.

What a year it has been. We hope you and your family stayed healthy and safe and continue to do so. Until next year.

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Sunrise at Red Rock Canyon in Nevada.

Another month. Another record. Despite a pandemic and struggling economy, the Las Vegas housing market continues to rise and remain in demand. November 2020 saw yet another record in the median price of a single family home – $345,000 according to the local Las Vegas Realtors Association.

As in previous months, inventory remained low with under 4000 available homes for sale on the local MLS. This, coupled with interest rates remaining low, has continued to fuel demand. Homes under $350,000 are selling quickly and condominiums are also a popular option, being priced lower than single family homes. However, even condominiums are a far cry from the price point of a few years ago.

As we turn the corner into 2021, we will have to wait and see how inventory will play a role in the current upward trend of the market. Will homeowners look to sell? And how will the newly implemented eviction moratorium, which is in effect through May 2021, affect the market?

Those are questions that only time will answer. In the meantime, homeowners and landlords are excited to see significant appreciation with their properties.

A simple image depicting the rapid growth in Las Vegas

The Las Vegas housing market has hit another high! In October, the median price for a resale single family home hit $340,200 (according to Las Vegas Realtors)! What is causing prices to rise, especially now amidst a pandemic and suffering economy? And can these high prices be maintained?

Limited Inventory

One factor affecting prices is a limited inventory of resale homes available. However, certain aspects of the real estate market changed last month. For example, showings on tenant occupied homes are now permissible with certain restrictions. And late notices and eviction proceedings are now allowed (effective October 15, 2020). How this will impact homeowners who have been thinking of selling is yet to be seen. Homeowners may take the opportunity to list homes for sale that have tenants in place which may increase available inventory. Or homeowners who have experienced lost rent and now in the process of eviction may decide to cash in on their investments.

The real estate market is based on supply and demand. Typically, should supply increase considerably in a rising market, prices may get softer and there may be more room for negotiation between buyers and sellers. However, we also have an unbelievably low interest rate to take into consideration – one of the lowest ever! How does that play a role?

Low Interest Rates

Well, interest rates play a huge role in affordability. It can dramatically affect a house payment. So, even though home prices are rising, the current interest rate is providing for a very attractive payment. Granted, down payments go up when prices go up. However, in many cases, the increase is not so dramatic that it pushes buyers away. And with today’s low interest rate, the prospect of a lower payment, even with higher resale values, is hard to bypass.

Take for example a home currently listed for $350,000. A couple of years ago when that house was $325,000 the down payment would only have been $2500 less. However, consider this difference. 2-3 years ago, the average interest rate was higher than today.

2-3 Years Ago:

$325,000 – 10% down payment ($32,500) = $292,500 at 4% (approximately) interest is $1396 principal and interest only.

Today:

$350,000 – 10% down payment (35,000) = $315,000 at 3.25% (approximately) interest is $1371 principal and interest only.

Notice the difference! Even with a higher loan of approximately $25,000, the lower interest rate can actually result in a lower payment than two or 3 years ago!
When you look at the big picture, it really is not surprising that demand is strong for real estate. As long as supply stays below average and interest rates remain at record lows, the perfect combination will exist for a rising market.

A young family standing in front of their home

The eviction moratorium has been lifted in Nevada effective October 15, 2020. As a result, late payment notices and 7 day pay or quit notices are starting to be served. Of course, for Landlords experiencing a lack of rent, this is news they have been waiting for. For tenants behind on payments due to financial hardship, this is less than ideal. So, what solution can be offered?

Negotiation. Having a meeting of the mind is key. This is an opportunity for landlords and tenants to work together. The situation we all are facing is far from ideal and it is bringing on hardships that we haven’t seen in a long time for both tenants and Landlords. So, perhaps coming up with a mutual solution is the answer.

As a tenant behind on your rent, are you able to come up with a reasonable, monthly re-payment plan that would be agreeable to your Landlord? Since rent is not forgiven, it will eventually be owed. Perhaps coming up with a plan to make your Landlord whole is the answer. Don’t forget! Many landlords have mortgages that have to be paid and a lack of income can put a financial pinch on their monthly obligations. Or they may rely on the rental home you are living in as retirement income.

As a Landlord, are you able to negotiate with your tenant for a monthly re-payment plan? Perhaps writing up a promissory note that you and your tenant can agree to will make it a real possibility. As a Landlord, if your tenant has a financial hardship, are you able to work with them? While rent is not forgiven, are you able to settle for an amount? That, of course, depends on your personal situation and decision.

When negotiation happens, especially in this instance, late payments and evictions can be avoided. Of course, every situation is different and calls for its own solution. In the end, we all hope that this situation will ease soon and a sense of normal is restored.

The Las Vegas real estate market continues to be on fire amidst a pandemic. Buyers are willing to pay more for a home as inventory remains tight and interest rates low. The average sold price of a single family home during August 2020 was $335,000 while condo’s averaged $185,000, another new record for the Las Vegas area (source: Las Vegas Realtors)

Though unemployment remains high and the economy slow in recovering, with many directives in place to mitigate the spread of the coronavirus but restricting economic growth, demand from individuals with savings and stable employment is keeping the real estate market alive and thriving. This scenario also goes to show market stability. How long will this trend continue? That is difficult to predict, as many factors go into keeping real estate alive and healthy. However, economic recovery from pandemic restrictions will be key.

We hope to see the pandemic get under control soon and as a result, positive developments in the economic sector.