Las Vegas Housing Market Trends in 2023: Opportunities and Challenges
The Las Vegas housing market has been through ups and downs over the past few years, with the pandemic having a significant impact on the market. As of January 2023, the market is facing a mix of opportunities and challenges for both buyers and sellers. In this blog post, we'll discuss the housing market trends in Las Vegas based on the report released by Las Vegas Realtors.
The decline in Single-Family Home Sales
According to the report published by Summerlincommunities.com (Data by LVR) on Las Vegas Real Estate Market Update, single-family home sales in Las Vegas decreased by 13.6% from December 2022 and by 48.3% from January 2022. However, the median sales price of previously owned single-family homes remained flat at $425,000, the same as in December, but down 2.3% from January 2022. This could be an opportunity for buyers who have been waiting for a drop in prices, but sellers may face challenges in getting their homes sold quickly.
Increase in Median Sales Price of Condos and Townhomes
The report states that the median sales price of condos and townhomes increased to $255,000 in January, up 3.3% from December and 4.9% from the prior year. This increase may be due to a higher demand for more affordable housing. Buyers looking for more affordable options may find condos and townhomes to be a good choice, while sellers may have a better chance of selling their properties quickly.
Increase in New Listings
The report states that new listings in January increased to 2,477, up 47.7% from December 2022, but down 14.6% from the prior year. This could be an opportunity for buyers to have more options to choose from, but sellers may face challenges in getting their homes sold quickly.
Housing Supply Continues to Increase
The housing supply in Southern Nevada was 4.1 months of inventory in January, up 1.6% from December and up 478.5% from the prior year. This may indicate a shift towards a buyer's market, where buyers have more bargaining power. Sellers may need to be flexible and open to negotiation to get their homes sold.
New Builder Incentives
Several new builder incentives were offered in January 2023, providing opportunities for buyers to save money. Taylor Morrison provided limited-time finance savings on select homes, offering an interest rate of 2.49% for year 1, 3.49% for year 2, and 4.49% for year 3. Toll Brothers offered a National Sales Event with incentives on select quick move-in homes, while Pulte offered special financing on a 30-year fixed rate of 4.25% for quick move-in homes.
Richmond American Homes provided 30-year fixed-rate financing at 4.875% for FHA and VA loans and 5.5% for conventional loans. Finally, Tri Pointe Homes offered limited-time below-market conventional 30-year fixed 3-2-1 buy-down with a first-year interest rate of 2.99%.
The Las Vegas housing market in 2023 presents a mix of opportunities and challenges for both buyers and sellers. Single-family homes are still in high demand, and despite the decline in sales, the median sales price has remained stable. However, the significant increase in housing supply may lead to a more balanced market, with buyers having more choices and negotiating power.
On the other hand, the condo and townhome market has seen a slight increase in median sales price, which may be due to a higher demand for more affordable housing. This trend is likely to continue as more millennials and first-time homebuyers enter the market. The luxury market has seen an increase in sales volume and median sales price, indicating that high-end buyers are still active in the market. This trend is expected to continue, as Las Vegas remains an attractive destination for those seeking luxury homes and a desirable lifestyle.
Overall, the Las Vegas housing market in 2023 presents a mix of opportunities and challenges for both buyers and sellers. Buyers can take advantage of the increasing housing supply and new builder incentives, while sellers may need to price their homes competitively to attract buyers in a more balanced market. It's important to work with an experienced real estate agent who can guide you through the market trends and help you make informed decisions.
On a monthly basis, here's how the Las Vegas housing market ended
Las Vegas Real Estate Market Forecast 2023
What are the Las Vegas real estate market predictions for 2023? The Las Vegas-Henderson-Paradise Metro housing market has seen a positive trend, with the average home value reaching $396,342, which represents an increase of 4.5% over the past year. This is a good indicator of a strong real estate market, showing that demand for housing in Las Vegas is on the rise. The Zillow Home Value Index (ZHVI) is a key metric used to measure changes in property values, and it has been steadily increasing in Las Vegas over the past few years, as shown in the chart above.
According to Zillow's data, the median sale-to-list ratio was 0.984 as of December 31, 2022, indicating that homes were selling very close to their list price. Additionally, only 16.5% of sales were above the list price, which suggests that there is less competition among buyers in the market. On the other hand, 62.8% of sales were below the list price, indicating that buyers are in a good position to negotiate favorable terms.
The median days to pending is 53 days, which is a relatively short time frame, indicating that homes are selling quickly in Las Vegas. This is a good sign for sellers, as it suggests that there is high demand for housing in the area. Zillow's market forecast predicts a 3.7% decrease in home values over the next year. Higher interest rates may help curb soaring prices, but it also increases the cost of borrowing
Based on the data provided, the Las Vegas housing market in 2023 is likely to remain strong, with rising home values and high demand. The market is currently favorable for both buyers and sellers, as homes are selling quickly, but buyers still have some negotiating power. However, the Zillow market forecast predicting a 3.7% decrease in home values over the next year could be a concern for homeowners who are looking to sell their property.
This decrease in value may be due to higher interest rates, which could make it more difficult for buyers to secure financing and afford homes. Despite this potential decrease, the Las Vegas housing market is still expected to remain relatively stable and strong overall. The city's growing population, strong job market, and desirable lifestyle all contribute to the demand for housing in the area.
Therefore, both buyers and sellers should continue to monitor the market closely and make informed decisions based on the data available to them. It may be a good time for sellers to list their homes, while buyers may want to act quickly to take advantage of current market conditions before interest rates increase.
Las Vegas Real Estate Market: Is It A Good Place For Investment?
Now that you know where Las Vegas is, you probably want to know why we're recommending it to real estate investors. Is Las Vegas a Good Place Real Estate Investment? Many real estate investors have asked themselves if buying rental property in Las Vegas is a good investment. You need to drill deeper into local trends if you want to know what the market holds for the year ahead. We have already discussed the Las Vegas housing market's historical and current trends for answers on why to put resources into this market.
Las Vegas is a minimally walkable city in Nevada. It is the 32nd most walkable large city in the US with 583,756 residents. Las Vegas has some public transportation and does not have many bike lanes. Downtown Las Vegas, home to the casinos and hotels, is the city's most accessible neighborhood, but housing is sparse there. In 2018, the Las Vegas housing market was so hot that it outperformed the best U.S. housing markets like Seattle. The Las Vegas real estate market is entirely brimming with new businesses.
It isn't just about casinos, medicine is a growing industry as well. The University of Las Vegas and Zappo's, the internet shoe store, is also based in Vegas. Its friendly business environment is propping up the economy and helping towards the positive Las Vegas real estate market trends. The new businesses are propping up at a much faster rate than the national average.
Las Vegas has a mixture of owner-occupied and renter-occupied housing units. It is a big rental property market. According to Neighborhoodscout.com, a real estate data provider, three and four-bedroom single-family detached homes are the most common housing units in Las Vegas. Other types of housing that are prevalent in Las Vegas include large apartment complexes, duplexes, rowhouses, and homes converted to apartments.
Las Vegas is the destination point of millions of visitors, the town is famous for its vibrant nightlife, exciting gaming action, and the natural allure of the beautiful desert that surrounds the greater metropolitan area. Tourists pour billions of dollars in Southern Nevada through which thousands of tourism jobs are supported.
Let's learn more about Las Vegas and find out why one should invest in this sturdy real estate market. These things make the Las Vegas real estate market stand out when it comes to choosing a place to invest in 2020 and beyond. Keeping aside the short-term impact of the ongoing pandemic, let's take a look at the number of positive things going on in the Las Vegas real estate market which can help investors who are keen to buy an investment property in this city.
|Why Is Las Vegas A Good Place For Real Estate Investment?|
THE CITY & ITS DEMOGRAPHICS
THE HOUSING MARKET & PRICES
These are just some of the highlights that make Las Vegas a great place to live and invest in real estate. The list can go on and on. Before the coronavirus pandemic hit the state, the Las Vegas real estate market forecast was as hot as the desert heat in Nevada. Keeping aside this crisis for a moment, the housing market in this region provides an excellent opportunity for investors. They are expressing confidence in the stable housing prices and the number of available housing units on the market.
New businesses are being created at a much faster rate than the national average. Las Vegas is also a strong rental market. Nearly 40% of the population rents in Las Vegas. Rental properties near these new businesses will benefit greatly due to the increasing tenant pool and the general improvement in economic activity that they bring. The first half of the previous year saw a huge increase in the demand for housing in Las Vegas, Nevada.
The inventory of homes has further decreased from last year. The current local housing inventory in Las Vegas is just over a two-month supply of homes available for sale. The high demand is followed by an increase in population, as well as an overall improvement of the economy in the area. All these factors have had a huge impact on the Las Vegas housing market, which is considered one of the hottest markets in the nation. Las Vegas has experienced several booms in its history, and it saw an incredible real estate bust during the Great Recession.
Las Vegas' recovery hasn't made the same headlines as the 50% or greater declines in home values did a decade ago. Yet its recovery shouldn't keep investors away. For savvy investors, the Las Vegas real estate market is both stable and predictable. Let's find out the latest trends and forecasts.
Las Vegas Home Prices Are Low Relative to Recent Highs
There have been articles claiming that Las Vegas is ready for another bust. However, prices are declining somewhat as new housing stock comes onto the market. This explains why the inventory of unsold existing homes doubled at the end of 2018. Yet the demographic trends that keep the Las Vegas housing market so hot aren't stopping.
This means that the Las Vegas real estate market is seeing a lull with a guarantee that the price will start to rise. The Las Vegas housing market is a great place for real estate investment. It remains relatively affordable than the expensive seller markets in the US. When people lose their jobs in great numbers, home prices crash as they did in Las Vegas a decade or so ago.
Homes went from an average price of over $300,000 to less than $150,000. Home prices have recovered, though due to inflation, they remain well below historic peaks. Likewise, Las Vegas foreclosure rates have fallen but they remain high by national standards. Around one in a thousand homes are foreclosed on each month.
Las Vegas Housing Prices Are Rising Slowly but Surely
The wide-open deserts around Las Vegas constrain the Las Vegas real estate market. The federal government owns the vast majority of the state. The Clark County government asked the federal government to allow them to take over 38,000 acres of land and start building housing. Nevada Congressional delegation has to ask the Bureau of Land Management, and they may take years to give their permission if they ever do.
This means that Las Vegas is surrounded by a lot of open lands, but it cannot simply expand to meet demand. This will continue to drive up prices in the Las Vegas housing market. We don't think the Las Vegas housing market is set up for a bust because it isn't overheating. The home values have gone up 1.8% over the past year. That's a healthy growth rate, whereas double-digit price increases are unhealthy. This rate is skewed by the number of new luxury homes coming onto the market and the constant churn at the high end of the market.
Las Vegas Is Landlord Friendly
Unlike many other Western states, the Las Vegas real estate market is landlord-friendly. It isn't difficult to evict non-paying tenants from Las Vegas investment properties. In general, they have five days from the date rent is due to “cure” the problem or eviction can begin. The same time frame is used to correct issues like lease violations, after which the person can be evicted. After those five days, the case can go to court, and these are landlord-friendly. Rulings typically arrive the same day, after which point the tenant has one day to leave the premises.
Landlords don't have to pay interest on deposits. There are no limits on late fees, though the late fees due must be spelled out in the rental agreement. There is no payment grace period set by state law. All of this adds up to the Las Vegas real estate market being a paradise for landlords.
Update: On July 1st, 2019, a new tenant protection legislation named SB 151 officially went into effect. It provides tenants with more time to deal with the consequences of eviction after they have had an eviction notice posted on their homes. They will now have seven judicial days to pay their rent or quit. The previous time frame was five calendar days.
For landlords, this new housing legislation also enables them to utilize an attorney or agent to prosecute the eviction action on their behalf. They will now need to go find a permitted eviction process server to carry out these tasks. Those who oppose SB 151 claim that giving tenants more time to go through the eviction process, will make it more difficult for owners to get their properties back on the rental market.
Las Vegas Job Market Attracts People
The Las Vegas job rate has ranged from half a point to a full point above the national unemployment rate. However, that's better than the unemployment rate in Arizona, Salinas, or the San Fernando Valley. And it is places like that sending de facto refugees to Las Vegas. The diverse economy of Las Vegas includes low-skill but good-paying jobs in entertainment, hospitality, and services. It draws thousands of new residents each year. This growth, coupled with its unusual economic basis, has made Las Vegas one of the wealthiest cities in the country.
Since the 1990s, Las Vegas has had one of the fastest-growing employment bases in the country, benefiting from a large labor pool and a favorable business climate. These conditions enabled city promoters to entice businesses of all kinds to choose Las Vegas over California. Every job-killing regulation in California drives businesses to Oregon and Nevada, too, taking jobs with them. This explains why future job growth for the next ten years is expected to be nearly 40%, well over the 33% expected for the nation as a whole. A growing supply of jobs will propel the demand for the Las Vegas housing market.
Las Vegas Rent Prices Are On the Rise
During the Great Recession, Las Vegas went from a fifth of its residents renting to nearly two-fifths. As the job market and personal credit improved, the area is back to having around 19% of residents choosing to rent. However, rents are on the rise. While homes are being built, many people are unable to afford them. This is because the developers who survived the Great Recession are maximizing their profits by building luxury homes, not the affordable homes that many want.
Due to an improving local economy and ongoing population growth, the demand for apartments remains strong in Southern Nevada. For those who can afford Las Vegas investment properties, this guarantees a large rental population that isn't going to be able to afford the new upscale properties that are coming onto the market.
As of February 26, 2023, the average rent for a 1-bedroom apartment in Las Vegas, NV is currently $1,299. This is a 0% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Las Vegas increased by 3% to $1,125. The average rent for a 1-bedroom apartment remained flat, and the average rent for a 2-bedroom apartment increased by 1% to $1,545.
- Two-bedroom apartment rents average $1,545 (a 3% decrease from last year).
- Three-bedroom apartment rents average $1,950 (a 4% decrease from last year).
- Four-bedroom apartment rents average $2,447 (a 5% increase from last year).
The Las Vegas real estate market is a great place to invest in real estate in 2022 based on these trends. There was a short-term decline in the rents but they are rising back. The unemployment rate is also decreasing so it is a great time to snatch up hot real estate deals by selecting the best neighborhoods.
Another report, issued by the Nevada State Apartment Association (NVSAA) shows that Southern Nevada’s apartment market is starting to stabilize, with rents projected to rise more slowly this year than previously projected. The report, produced by the NVSAA based on data provided by CoStar, predicts that apartment rents in Southern Nevada will increase by more than 20 percent from the end of the first quarter of 2022 to the end of the same quarter one year later. The average monthly rent in the first quarter was $1,451, up from $1,198 a year earlier.
Meanwhile, local apartment vacancy rates remain stable, with the average vacancy rate during the first quarter of 2022 at 5.4%. That’s up 0.3% from the same time in 2021. Local apartment construction is also on the rise, with the industry projected to catch up with demand by the end of 2022. The report showed more than 7,000 new local apartment units under construction through the first quarter, compared to about 3,800 units during the same time last year.
The average size for a Las Vegas apartment is 893 square feet with studio apartments being the smallest and most affordable, 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage. You can, of course, charge much more for a three or four bedrooms single-family home than an apartment.
The most affordable neighborhoods in Las Vegas are Beverly Green, where the average rent goes for $1,061/month, Crestwood, where renters pay $1,061/mo on average, and Francisco Park, where the average rent goes for $1,061/mo. Other good neighborhoods for affordable rentals include Hillside Heights ($1,061), Huntridge Park ($1,061), and John S. Park ($1,061), where the asking prices are below the average Las Vegas rent of $1,471/mo.
The most expensive neighborhoods by Average Rent are:
|Las Vegas Neighborhood||Average Rent|
California's Loss Is Nevada's Gain
A $475,000 median price may be steep if you're coming from the heartland where a mid-market home costs $150,000 to $200,000. However, tax refugees from California flooding into Nevada find that same house to be an outright bargain compared to the $781,050 price for a comparable property in Los Angeles.
Southern Nevada is one of the cheaper metropolitan areas in the United States, and it is a fraction of the cost of living in California on nearly every front. This explains why you see so many California license plates in Vegas and why it costs $120 to rent a moving truck to go from Vegas to San Francisco but $2000 to come to Las Vegas.
As per the data by Lasvegasrealestate.org, the luxury home market has expanded as 30% of buyers are moving from California to take advantage of Las Vegas' low cost of living. Even the most expensive custom homes from builders such as Blue Heron are found to be a bargain for out-of-state buyers and investors.
Possibly our second-largest market is retiree buyers in 55+ Communities who enjoy the weather, health care, and activities that only Las Vegas can combine in one city at a value not matched in any major city anywhere in the USA.
Nevada Is the Ultimate, Low Tax Locale
While those who own Las Vegas investment properties will need to pay their mortgage if they don't pay cash for the property and ongoing expenses like maintenance and insurance, Nevada offers very low taxes. There is no state income tax.
Nevada's property tax rates are among the lowest in the U.S. The state's average effective property tax rate is just 0.69%, which is well below the national average of 1.08%. Homeowners in Nevada are protected from steep increases in property tax bills by Nevada's property tax abatement law, which limits annual increases in property tax bills to a maximum of 3% for homeowners.
Thus, even if home values increase by 10%, property taxes will increase by no more than 3%. The taxable value of a property is calculated as the cash value of the land (the amount the land alone would sell for on the market), and the replacement cost of all buildings minus depreciation of 1.5% per year since construction.
The assessed value is equal to 35% of that taxable value. Thus, if your County Assessor determines your home's taxable value is $100,000, your assessed value will be $35,000. Tax rates apply to that amount.
There are numerous tax districts within every Nevada county. Hence, when comparing between counties, it is useful to look at average effective rates. Clark County contains almost 75% of the state's residents and includes Las Vegas. The average effective property tax in the county is 0.70%, slightly higher than the statewide average, but still significantly lower than the national average.
If you're planning to buy in Nevada, the most common type of home loan is a 30-year fixed-rate mortgage. This option gives you plenty of time to pay back the loan and your interest rate remains the same for the duration of the loan's life unless you refinance. You can also consider a 15-year fixed-rate mortgage.
It allows you to pay off your loan quicker and comes with a lower interest rate, but your monthly payments will be higher. As we write this, the average Nevada rate for a fixed 30-year mortgage is 3.46%, and for a fixed 15-year mortgage it is 2.83%.
Nevada Real Estate Investment Markets
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.
This earned the Las Vegas real estate market a spot among the best places that people were moving to in 2018. The city will hold this title well into 2020 according to the forecast. Good cash flow from Las Vegas investment property means the investment is, needless to say, profitable.
A bad cash flow, on the other hand, means you won't have money on hand to repay your debt. Therefore, finding the best investment property in Las Vegas in a growing neighborhood would be key to your success. If you invest wisely in Las Vegas real estate, you could secure your future. The best investment is now looking for a rental property that will generate good cash flow.
Your best tenants would be retirees who intend to relocate to Las Vegas and want to purchase property to rent out. The running costs for owning and managing a Las Vegas rental property should not be high. A cheaper neighborhood in Las Vegas might not be the best place to live in.
A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals such as duplex and triplex in Class A neighborhoods.
The inventory is low, but opportunities are there. There are 50 neighborhoods in Las Vegas. The Paseos has a median listing price of $666.9K, making it the most expensive neighborhood (Realtor.com). Sunrise is the most affordable neighborhood, with a median listing price of $152K.
Some of the most popular neighborhoods in Las Vegas are Paradise, Enterprise, and Spring Valley. Here you'll find the maximum no. of listings. In Spring Valley, Las Vegas, NV, the home prices range from $44.9K – $18.5M while rental properties are within a range of $795 – $11K.
Even as Las Vegas home prices have reached new heights, the market remains attractive to residential real estate investors. As they continue to compete for potential investment properties at the lower end of the market, the challenges for first-time homebuyers will remain. Millennial homebuyers can't outbid real estate investors and hence end up renting.
As with any real estate purchase, act wisely. Evaluate the specifics of the Las Vegas housing market at the time you intend to purchase.
There are many other markets near Vegas, that you can choose for real estate investing. As a result of an influx of companies and jobs in Northern Nevada, strong housing demand continues to put pressure on the available supply. The Reno real estate market is ideal for investors for several reasons. Supply is limited, and demand is growing.
Rental rates are driven by several competing markets that aren't going to slow down any time soon. Forget owning a couple of condos in Las Vegas and invest in a more affordable, stable real estate market like Reno. Good cash flow from Reno investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won't have money on hand to repay your debt.
Nevada Out of State Investment Opportunities
On the east of Nevada lies the state of Utah, where you can consider investing in Salt Lake City. The Salt Lake City real estate market was ranked one of Millennials' toughest real estate markets due to limited supply relative to demand. Salt Lake is a “slightly hot” real estate market at the moment.
The economy is strong and the city achieves the lowest unemployment rate at 2.1%. The median days on market is 30.5 days, with inventory moving 6 percent faster than last year and 30.5 days faster than the U.S. overall. Home prices in Salt Lake City are expected to rise by record levels in 2020. A strong job market and a robust economy have contributed to the rising housing costs over the past seven years.
Ogden is another good and affordable real estate market in the neighboring state of Utah. The Ogden housing market is appreciating because people move here for work as often as they do live. For example, there are many good-paying jobs in the IT, life sciences, aerospace, and outdoor products manufacturing industries. There are civil service jobs with the state tax office and the local hospital. And then there's the college. This is on top of Utah's employment growth rate of roughly 3 percent a year.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Las Vegas.
Not just limited to Las Vegas or Nevada but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We're standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Las Vegas turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Latest Market Data, Trends, and Statistics
LAS VEGAS' ECONOMIC & JOB GROWTH INDICATORS
Loss of California