May 2017 – It seems that every week we hear about a new development within the Las Vegas area. As a matter of fact, billions of dollars in residential / commercial and industrial development is either in the planning or construction phase. How will this affect the local economy?
To start, the residential market is currently experiencing a shortage of homes. Resale homes are not coming on the market in volumes as they used to and builders are not building nearly as many homes as during the pre-recession era. Yet, new residents to Las Vegas and new buyers looking to get their hands on a piece of real estate has been going up. This has been driving prices up as competition for homes as increased. Brand new homes are averaging $325,000 and resale homes are currently at around $250,000. As inventory continues to be slim, we can expect prices to increase month over month. What is contributing to the demand?
The Las Vegas economy in general has seen positive strides for a few years now – since 2012. The unemployment rate has steadily gone down and investors began investing into various projects throughout the Las Vegas area. Granted, the beginning of the improvement was slow. However, in the last 3 years, things shifted and the influx of investors increased considerably.
In addition, large corporations began to view Las Vegas as a viable place to place roots. Quickly, new industrial developments began to take shape, vacancies in commercial centers began to disappear and the demand for housing once again grew. As a matter of fact, new developments in the commercial market quickly took shape. This development has led to other positive aspects for the city. Improvements in infrastructure gained momentum and currently numerous road and freeway improvements are in the works to accommodate the growth. Aesthetic improvements have been made as well to various public spaces, along streets and highways. Of course, major sports are making their stamp on the city as well recently, leading to new venues being constructed. Development of multi family housing is in full swing as well, leading to numerous apartment communities and mid-rise buildings in the construction phase.
What is the difference in the local economy today compared to 10 years ago? It is the diversity we are seeing as far as the various types of companies and businesses making their mark on Las Vegas. This diversity leads to a more stable and healthy economy that everyone can benefit from. It will also lead to stronger and healthier home prices and rental values, which we have already begun to acquire a taste for.