It’s hard to believe that even though a pandemic is in full swing, unemployment is gripping the country and the price of goods is rising, the Las Vegas real estate market was up…again…during the month of July 2020. The average price of a house in the Las Vegas valley is $330,000. What is contributing to the rise of real estate prices?
For one, the Las Vegas housing market did not bubble in the preceding years – gaining value that it could not support requiring creative financing for the average buyer to qualify. While market value has grown significantly over the last 7 years, it was also rebounding from historic lows after the great recession. The Las Vegas economy grew at an unprecedented rate, creating many jobs and diversifying considerably, leading to an influx of new residents and folks willing to get back into owning a home. Interest rates dropped to historic lows as well over the last few years, making owning a home affordable for many. This spurred our local real estate market, yet it did not over inflate prices.
What about today? It is true, that the pandemic has taken a significant toll on local jobs – as a matter of fact, as of June 2020, the unemployment rate was 18% (according to bls.gov). However, this still means that many have retained their jobs and employment. Interest rates have continued to creep lower and lower, adding to affordability. Many first time and really, second time home buyers want to enter the market and take advantage. Yet, inventory is still tight – the supply of available homes, especially in the price point of what most can afford, is limited. As a result, this is driving prices higher.
What can we expect with the market? So far the market has gone against what many thought it would do – depreciate. If inventory remains about the same, we can expect relative stability with home values and modest appreciation. If we end up having more inventory come onto the market, market value may change some. However, interest rates continue to remain low – and it appears they may stay like that for the foreseeable future. Perhaps now is a good time to explore buying a property!
Contributed by Nicklin Property Management.