The Las Vegas housing market has been through ups and downs over the past few years. Given the current scenario with low inventory and the potential for a reverse crash in prices, January 2024 appears to be a reasonable time for buyers. However, the market's trajectory will depend on various factors, including the Federal Reserve's actions and overall economic conditions.
How is the Las Vegas housing market doing currently?
The Las Vegas Valley real estate industry experienced its most challenging year for sales since 2008, according to the Southern Nevada report published by Summerlincommunities.com (Data by Las Vegas Realtors). A significant contributor to this downturn was the surge in mortgage rates, reaching a more than 20-year high.
Despite this, the market faces a unique challenge in the form of a shortage of inventory and affordable housing. Many homeowners, benefiting from low interest rates during the pandemic, are reluctant to sell their homes due to the attractive monthly mortgage payments they secured.
If the current trend of low inventory persists, it is likely to keep Las Vegas home values elevated. However, the market is poised for potential opportunities in January, presenting a favorable time for buyers. The anticipation of a reverse crash, triggered by a surge in demand once the Federal Reserve lowers interest rates, could lead to a significant increase in prices.
Economic Uncertainty and Forecast
Forecasters speculate that the Federal Reserve may slash the overnight funds rate in the coming year as inflation cools. This move could potentially provide a boost to the real estate market. However, given the unpredictable macroeconomic climate, the actual trajectory of the economy in 2024 remains uncertain.
Single-Family House Sales
In December, there were 1,518 single-family houses sold, marking a 5.8% increase from November but a 1% decrease from December 2022. The median sales price of previously owned single-family homes in December was $449,900, showing a $100 drop from the previous month but a 5.9% increase from the prior year. The year started at $425,000, reflecting a 5.9% year-over-year increase.
- January 2023: $425,000
- February 2023: $424,995
- March 2023: $425,000
- April 2023: $430,000
- May 2023: $442,120
- June 2023: $440,990
- July 2023: $450,000
- August 2023: $447,435
- September 2023: $450,000
- October 2023: $450,000
- November 2023: $450,000
- December 2023: $449,900
The median sales price of condos and townhomes dropped by $5,000 to $270,000 in December, down 1.8% from November but up 9.3% from the prior year.
New Listings and Housing Supply
December witnessed a total of 1,500 new listings, reflecting a 23.8% decrease from November and a 10.6% decrease from the prior year. The housing supply in Southern Nevada stood at 2.5 months of inventory, down 18.2% from November and 38.7% from the prior year. In comparison, December 2022 had 4 months of inventory on the market.
Closings and Market Activity
Notably, 57.6% of closings in December occurred within 30 days of being on the market. This is a slight decrease from November's figure of 65.5% but a significant increase from December 2022, where only 40.8% of homes were on the market for 30 days or less.
Are Home Prices Dropping in Las Vegas?
While the median sales price of single-family homes experienced a modest decrease in December, the overall trend throughout 2023 showcased a 5.9% year-over-year increase. The dynamics of home prices will likely be influenced by market forces and the Federal Reserve's decisions in the coming months.
The potential for a reverse crash is mentioned, suggesting a surge in demand once the Federal Reserve lowers interest rates. However, the actual occurrence of a market crash remains uncertain and is contingent on various economic factors in the upcoming year.
January 2024 is highlighted as a potentially favorable time for buyers, considering the low inventory and the anticipation of a reverse crash. However, individuals should carefully monitor market trends, interest rate changes, and economic developments to make informed decisions.
Las Vegas Housing Market Forecast 2024
What are the Las Vegas real estate market predictions? The Las Vegas real estate market is one of the most dynamic and ever-changing markets in the United States. One factor contributing to this growth is the strong job market in Las Vegas. With major industries such as hospitality, gaming, and entertainment, Las Vegas has a strong job market that attracts many people to the city. This, in turn, increases the demand for housing in the area, which drives up home values.
Another factor contributing to the growth of the Las Vegas housing market is the city's reputation as a popular tourist destination. As more people visit Las Vegas and enjoy the city's amenities, they may be more inclined to purchase a home in the area, which can increase demand and home values.
The Las Vegas-Henderson-Paradise housing market, according to Zillow's latest data through October 31, 2023, presents both challenges and opportunities for buyers and sellers.
Current Market Snapshot:
- Average Home Value: $405,400
- Yearly Change: Down 5.2%
- Days to Pending: Approximately 15 days
Market Forecast:
Zillow's 1-year market forecast for Las Vegas-Henderson-Paradise indicates a decrease of 1.4% by October 31, 2024.
Inventory and Listings:
- For Sale Inventory (October 31, 2023): 7,688
- New Listings (October 31, 2023): 2,630
Sale and List Prices:
- Median Sale to List Ratio (September 30, 2023): 0.994
- Median Sale Price (September 30, 2023): $400,700
- Median List Price (October 31, 2023): $449,967
Sales Performance:
- Percent of Sales Over List Price (September 30, 2023): 25.7%
- Percent of Sales Under List Price (September 30, 2023): 52.4%
Las Vegas Real Estate Market: Is It A Good Place For Investment?
Las Vegas, renowned for its entertainment and tourism, is also emerging as an attractive destination for real estate investment. In this section, we'll delve into the current state of the Las Vegas housing market and explore why it might be the right place for you to invest.
Current Market Trends
The Las Vegas real estate market has been on a remarkable journey, but in 2023, we see some notable shifts:
The Las Vegas housing market is showing signs of cooling down. Sales activity decreased in 2023, and there was a significant drop in new listings. The increased months of supply also indicate a more balanced market, suggesting a cooling trend compared to previous months.
The reduction in home prices also presents opportunities for buyers looking for more affordable housing options. However, while prices may have eased slightly, finding a home in Las Vegas remains a challenge due to low inventory. This means that competition among buyers, especially for properties in desirable locations and price ranges, remains fierce.
Top Reasons to Invest in the Las Vegas Real Estate
Here are several compelling reasons why you should consider investing in Las Vegas real estate for the long term:
1. Strong Economy and Population Growth
The Las Vegas metro area is one of the fastest-growing regions in the United States, with approximately 19,000 new residents from the summer of 2020 to 2021, as reported by the U.S. Census Bureau. The city's diverse economy, driven by sectors like tourism, entertainment, gaming, technology, healthcare, and education, provides a stable income source for residents.
2. Rental Income and Appreciation Potential
Las Vegas has a strong rental market, with a significant portion of its population choosing to rent rather than buy. This creates opportunities for long-term investors to generate steady rental income, especially in desirable neighborhoods and near employment centers.
Rental properties in Las Vegas are always in high demand. In September 2023, the median rent for single-family homes increased by 16.7% compared to the previous year, reaching $2,100. The city's rental vacancy rate, at 4.8%, is lower than the national average of 6.2%, ensuring high occupancy rates and cash flow for landlords.
The demand for rental properties in Las Vegas often results in low vacancy rates. Long-term investors can benefit from a stable stream of rental income and less downtime between tenants, increasing overall profitability.
3. Resilience and Adaptability
Lifetime periods of economic downturns, Las Vegas has proven to be resilient. After the challenges of the Great Recession of 2008-2009 and the COVID-19 pandemic in 2020-2021, the city has bounced back with robust growth and development. New projects and initiatives are continually revitalizing the city.
4. Infrastructure Development
Las Vegas has ongoing infrastructure development projects, including new roads, public transportation, and community amenities. These investments can enhance the quality of life and property values, making it an appealing choice for long-term real estate investors.
Several significant projects are shaping Las Vegas's future:
- The Resorts World Las Vegas: A $4.3 billion mega-resort opened in June 2023, offering over 3,500 rooms, a casino, a theater, and more.
- The MSG Sphere at The Venetian: A $1.8 billion entertainment venue expected to open in late 2023 or early 2024, featuring a spherical shape and state-of-the-art technology.
- The Las Vegas Convention Center Expansion: A $980 million project added 1.4 million square feet of space, enhancing the city's event capabilities.
- The Allegiant Stadium: A $1.9 billion stadium that opened in July 2020 as the home of the NFL's Las Vegas Raiders and host for events and concerts.
- The Boring Company's Loop System: A $52 million underground transportation system connects various locations in Las Vegas using autonomous electric vehicles.
5. Strong Population Growth
Las Vegas has been experiencing consistent population growth due to its economic opportunities, affordable cost of living, and desirable lifestyle. A growing population creates sustained demand for housing, making it an attractive option for long-term investors.
Las Vegas is a shining beacon in the desert for those fleeing California or simply hoping to make it big. Many others simply come to earn a living serving the many tourists who visit here each year or work at the firms relocating to this tax haven. All of this gives the Las Vegas real estate market a bright future.
According to PwC's annual real estate report, the Las Vegas housing market will enjoy a population growth rate that is well above the national growth rate. This is a continuing trend as data from the US Census Bureau shows a net migration of 6.46% from 2012-2016.
6. Economic Diversification
Las Vegas has diversified its economy beyond the entertainment and tourism sectors. The city now boasts thriving industries in technology, healthcare, and manufacturing. Economic diversification contributes to stability and long-term growth potential in the real estate market.
7. Appreciation Potential
The Las Vegas real estate market has historically shown the potential for property appreciation. As the city continues to grow and evolve, property values may increase over time, providing long-term investors with capital gains opportunities.
8. Low Property Taxes
Nevada is known for its favorable tax climate. The state has no personal income tax, and property taxes are relatively low. This can translate into better returns for real estate investors, making long-term ownership more attractive.
9. Tourism and Hospitality
Las Vegas remains a global tourist destination, and the hospitality industry continues to thrive. This ensures a steady flow of short-term rental and vacation rental opportunities, which can be a lucrative segment for long-term investors, especially in the right locations.
10. Education and Workforce
The city has been making investments in education and workforce development. A well-educated and skilled workforce can attract businesses and professionals, leading to increased demand for housing and real estate investment potential in the long term.
11. Wealth of Investment Options
Las Vegas offers a wide range of real estate investment options, from single-family homes to multi-unit properties and commercial real estate. Diversifying your portfolio with different types of properties can provide a solid foundation for long-term financial growth.
Before investing in Las Vegas real estate for the long term, it's crucial to conduct thorough research, understand market conditions, and consult with local real estate experts to make well-informed investment decisions. Long-term real estate investment can be a promising path to building wealth and financial security in this dynamic and growing city.
References:
- https://www.lasvegasrealtor.com/housing-market-statistics
- https://summerlincommunities.com/
- https://www.zillow.com/las-vegas-nv/home-values
- https://www.neighborhoodscout.com/nv/las-vegas/real-estate#description
- https://www.realtor.com/realestateandhomes-search/Las-Vegas_NV/overview