The Las Vegas housing market is sizzling hot with prices surging month over month. Even during these tough times, the Las Vegas properties are selling at record prices and rental homes continue to be in demand. The unemployment rate is still more than 10% but it has got no effect on the housing or rental demand. The avg. rent is up 37.8% for a studio apartment, up 26.3% for 1BR, and up 25.1% for 2BR in Las Vegas (source: Apartmentguide).
It is no doubt Las Vegas is a strong seller's real estate market and the supply of available single-family homes has shrunk to less than two months. Although the pandemic is still causing disruptions, there is no downturn happening in the Southern Nevada housing market. The market has recovered and reached new heights this year. In fact, the Las Vegas housing market is among those cities that are showing the most signs of a positive recovery from the pandemic. Nevada's unemployment rate was at its peak in April (30.0%).
It has now dropped to 12.0% as of October 2020, down from 12.5 percent in September but up 8.3 percentage points when compared to October 2019, according to Local Area Unemployment Statistics (LAUS). As the local economy rebounds and the unemployment rate reduces further, it will have an indirect impact on this region's housing market.
Low unemployment leads to higher future income which in turn leads to a higher demand for housing. Hence, Las Vegas, as well as the Southern Nevada housing market, will boom in 2021. The home values are predicted to rise by 7-8% in the next twelve months (check the forecast below). It has already heated up with strong demand and a shrinking supply driving home price peaks.
The houses are selling quicker than they were last year at this time despite the coronavirus pandemic's devastating effect on the economy. By the end of October, the Las Vegas Realtors (LVR) reported 4,501 single-family homes and 1,428 condos listed for sale. That is down 37.6 percent for single-family homes and down 21 percent for condos from one year ago.
LVR reported that sales of existing single-family homes in Southern Nevada were up by 11.2%. The median sales price increased by 10.8% to $340,200. That's $2,950 more than September's median price of $337,250 and marks another all-time price record. The local condos & townhomes sold for a median price of $186,500, an increase of 8.9% from last year.
Condo sales were also up by 9.5%. 3,961 existing single-family homes, condos, and townhomes were sold in October. The national housing market 2020 has already bounced back faster than anticipated from the damage caused by the COVID-19 pandemic.
Realtor.com's October data shows that the median list price of homes in Las Vegas, NV was $320K, trending up 8.5% year-over-year. The median listing price per square foot was $181. Queensridge has a median listing price of $872K, making it the most expensive neighborhood. Pioneer Park is the most affordable neighborhood, with a median listing price of $210K. In Sun City Summerlin, the median listing price is $349.9K.
- The median list price of homes in North Las Vegas, NV was $300K, trending up 8.7% year-over-year and the median listing price per square foot was $162.
- The median list price of homes in West Las Vegas was $219.9K, trending up 10% year-over-year and the median listing price per square foot was $153.
- The median list price of homes in East Las Vegas was $225K, trending up 7.1% year-over-year and the median listing price per square foot was $148.
Southern Nevada Housing Market | Monthly Report | October 2020
- A full summary report published by Summerlincommunities.com (Data by LVR) on Las Vegas Real Estate Market Update shows that there were 3,225 single-family houses that sold in October, down 1.4% from September, but up 11.2% from October 2019.
- The median sales price of previously owned single-family homes has set a record for the fifth consecutive month. It went from $337,250 in September to $340,200 in October, which is up .9% and up 10.8% from the prior year.
- The housing supply in Southern Nevada is now at 1.4 months, which is down 4.9% from September and down 43.9% from the prior year.
- There were also a total number of 3,592 single-family houses listed without offers at the end of October, down 6.7% from Septemberer, but up 1.4% from the prior year.
- 70.3% of the closings for the month of October were on the market for 30 days or less.
- In September this number was at 69% and in October 2019, 52.6% of the homes were on the market for 30 days or less.
Las Vegas Real Estate Market Forecast 2021
What are the Las Vegas real estate market predictions for 2020? 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. We get to find on Zillow that the median home value in the Las Vegas area is $296,251 (seasonally adjusted and only includes the middle price tier of homes).
Let us look at the price trends recorded by them over the past few years. From 2017 to 2018, the median home price in Las Vegas appreciated by 30.4%, from $217,000 to $283,000. In two years, Las Vegas home values rose significantly due to the low availability of homes and very high demand.
It was named as the number one real estate market in the USA for 2018 by Realtor.com based on the price and amount of existing homes, new home construction, and local and economic trends. Las Vegas home values reported the highest year-over-year gains in home values, totaling a 13 percent increase, according to the S&P's Corelogic Case-Shiller Index in 2018 (the leading measure of U.S. home prices).
However, in 2019, Southern Nevada’s housing market overall cooled off with slower price growth and slumping sales. It looks almost flat throughout the year in the graph given below. Although overall price appreciation rates were slower in 2019 than in 2018 they greatly varied across different zip codes.
Southern Nevada prices were up 2.6 percent year-over-year in December, compared with 3.8 percent nationwide, according to the S&P CoreLogic Case-Shiller index. The median prices for new homes increased by just 1 percent. Appreciation has been steady and strong in 2020, the Las Vegas home values have gone up nearly 6% over the last twelve months.
NeighborhoodScout.com's data also shows that Las Vegas real estate appreciated by nearly 133.14% over the last ten years. Its annual appreciation rate has been averaging at 8.8%. This figure puts it in the top 10% nationally for real estate appreciation. During the latest twelve months, the Las Vegas appreciation rate was nearly 4.19%, and in the latest quarter, the appreciation rate was 1.49%, which annualizes to a rate of 6.09%.
This figure corroborates Zillow's positive forecast, which also predicts that home prices in this region are expected to increase by nearly 7% in the next twelve months. In other words, if you buy a property now, then after twelve months, you can expect an ROI of anything between 6-7%.
Here is Zillow's home price forecast for Nevada, Clark County, Las Vegas, Henderson, and Las Vegas Metropolitan Area. The forecast is until September of 2021 and you can expect to see very strong home price gains in this region.
- Nevada home values have gone up 6% over the past year and the latest forecast is that they will rise 7.5% in the next year.
- Las Vegas home values have gone up 5.8% over the past year and the latest forecast is that they will rise 7.4% in the next year.
- Henderson home values have gone up 6.1% over the past year and Zillow predicts they will rise 7.5% in the next twelve months.
- Clark County home values have gone up 5.9% over the past year and Zillow predicts they will rise 7.5% in the next twelve months.
- Las Vegas-Henderson-Paradise Metro home values have gone up 5.9% over the past year and the latest forecast is that they will rise 7.0% in the next year.
Las Vegas-Henderson-Paradise, NV MSA Real Estate Appreciation Trends
The Las Vegas Valley is a major metropolitan area in the southern part of the U.S. state of Nevada. The Valley is home to the three largest incorporated cities in Nevada: Las Vegas, Henderson, and North Las Vegas. Here is a short and crisp Las Vegas Valley housing market forecast created by LittleBigHomes.
This forecast ends with the 3rd Quarter of 2021. The accuracy of this forecast for Las Vegas is 71% and it is predicting a positive trend. LittleBigHomes.com estimates that the probability of rising home prices in Las Vegas is 71% during this period. If this price forecast is correct, the Las Vegas-Henderson-Paradise, NV home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
The historical change in home prices forLas Vegas-Henderson-Paradise, NV is also shown below for the three-time period. The Las Vegas Home Price Index increased for the last 26 consecutive quarters (data up to 3rd Quarter, 2018). The highest annual change in the value of houses in the Las Vegas Real Estate Market was 44% in the twelve months ended with the 3rd Quarter of 2004.
The worst annual change in home values in the Las Vegas Market was -35% in the twelve months ended with the 4th Quarter of 2008. The highest growth in home values in the Las Vegas Real Estate Market over a three year period was 84% in the three years ended with the 1st Quarter of 2006.
The worst performance over a three year period in the Las Vegas Market was -53% in the three years ended with the 1st Quarter of 2010. For the upcoming updates, you can visit LittleBigHomes.com.
|Time Period||Las Vegas Metro Real Estate Appreciation|
|Last 5 Years||79%|
|Last 10 Years||36%|
|Last 20 Years||105%|
The question now is what happens moving forward. These numbers can be positive or negative depending on which side of the fence you are – Buyer or Seller? It is quite evident that the ongoing pandemic has had a great impact on home sales in the Las Vegas real estate market. Las Vegas' unemployment rate in April was a whopping 33.5 percent, the highest among major American cities.
To quantify the unemployment numbers, the Las Vegas area lost more than 200,000 jobs from March to April. Home sales dropped sharply both in April & May from both the previous month and year as the housing market began to feel the full impact of the coronavirus outbreak and the state's stay-at-home order.
At the same time, home prices remained unaffected and continued an upward trend. The report shows it is still a strong seller's real estate market with low and continuously declining inventory. As we move forward the real estate industry is adapting to the current environment by conducting business using technologies such as virtual showings and e-signing to help buyers and sellers with their housing needs in the face of these challenges. Real estate is also deemed as an essential business.
In July, there was a surge in sales because of historically low interest rates coupled with the efforts by the government to keep money flowing in the economy. The unemployment rate is down to 12% in Nevada and an estimated 14.8% of the Las Vegas Valley workforce was unemployed in September, the highest in the nation among large metro areas.
Las Vegas has been one of the hottest real estate markets in the country for years. It is also one of the hottest real estate markets for investing in single-family rental properties. This area is skewed to sellers due to a very low level of inventory that can't meet the demand of the rising population.
In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, it can become a buyer's real estate market if the supply increases to more than five months of inventory. And that's probably not going to happen anytime soon.
Currently, the housing supply in Southern Nevada is at 1.4 months, which is down 4.9% from September and down 43.9% from the prior year. Therefore, given how hot the local economy was before the pandemic, the Las Vegas real estate market remains strong and skewed to sellers due to a growing population and booming economy – which leads to a persistent imbalance in supply and demand.
For sellers, it is a great time to sell. Motivated buyers are looking for houses for sale, and you are not competing with as many property owners. Many sellers have chosen to back out amid this pandemic. As more and more buyers enter the market the prices are going to increase due to tight supply.
For buyers, the mortgage rates are the lowest ever, so they should take advantage of scooping up more expensive houses by locking in lower monthly payments. Lower rates can help buyers stretch their budgets for higher-end deals that otherwise are taken away by seasoned investors in the bidding wars. Overall, it is a win-win scenario for both sellers and buyers and a great time to enter the market.
Las Vegas Housing Market 2020 Summary
We shall now do a quick recap of how the Las Vegas housing market has performed in 2020 so far. We shall mainly discuss median home prices, inventory, economy, growth, and neighborhoods, which will help you understand the way the local real estate market moves in this region.
Let's first talk about Las Vegas and the surrounding metro area. 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.
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 Housing Market Trends Before COVID-19 Pandemic
After slouching in 2019, the Las Vegas housing market forecast kicked off well in 2020. The Las Vegas home prices were trending up to possibly make a new record in 2020 due to the strong demand for housing and persistently tight supply.
The month of February was phenomenal as almost after 13 plus years the Las Vegas home price growth surpassed pre-recession levels. Through the first quarter of 2020, local home sales were running ahead of last year's pace in the entire Greater Las Vegas housing market.
The impact of the coronavirus pandemic on the Las Vegas housing market was felt in April when home sales started dropping. The prices are holding relatively steady, though. The median price of existing single-family homes sold in Southern Nevada during April 2020 was $310,000, down by 2.8% from a record price of $319,000 in March.
As compared to last year's April, the median price rose by 3.3%. Due to the COVID-19 crisis, home sales dropped again in May but prices were higher as compared to last year. The supply and demand continue to favor sellers, prices have been rising steadily in the entire Las Vegas metro area housing market.
2019 ended with the housing market remaining strong and yet affordable for homebuyers and investors. This year kicked off well. The first quarter of 2020 ended with home sales running ahead of last year's pace in the entire Greater Las Vegas housing market.
2020 was considered to be the year to break the record for median home prices in Las Vegas. The total number of existing local homes, condos, and townhomes sold during January was 2,875. Sales were down from December 2019. But compared to the same time last year, January 2020 sales were up 25.2% for homes and up 22.8% for condos and townhomes.
By the end of January, Las Vegas REALTORS® reported 4,906 single-family homes listed for sale, down 32.4% from a year ago. Homes and condos were selling at a slower pace than last year.
In January, 68.8% of all existing local homes and 66.2% of all existing local condos and townhomes sold within 60 days. About a year ago, 72.0% of all existing local homes and 71.2% of all existing local condos and townhomes sold within 60 days.
The median sales price of a single-family home set a record in February 2020, when it hit an all-time peak of $316,000. This kind of growth was seen before the burst of the housing bubble that led to a deep recession in the housing market of Southern Nevada for over a decade.
The year-over-year increases in the median home price and sales were 6.7% and 25.7% respectively. After several months of strong home sales and following a massive recovery of the local real estate market and economy, Las Vegas home sales started taking a hit due to the impact of the coronavirus pandemic.
Due to stringent stay-at-home orders, many real estate deals got delayed or canceled. Job losses also started climbing especially in the tourism and casino businesses. Las Vegas' lucrative convention business also got affected with several conferences being canceled. Many potential homebuyers retreated from the market due to economic uncertainly.
Impact of Covid-19 on the Las Vegas Housing Market
The booming Las Vegas real estate market was impacted by the ongoing pandemic but things are turning back to normal. The economic uncertainty and massive job losses directly affected its housing market as well. However, it has managed to avoid total collapse. COVID-19 pandemic caused a short-term decline in the Las Vegas housing market.
Las Vegas' unemployment rate, just 3.9% in February, shot up to 34% in April. By June it had tumbled to 18% after casinos and other businesses were allowed to reopen, state officials reported. Even though these effects on the Las Vegas housing market are deemed as short-term, it is yet to be predicted as to what the potential long-term impact could be.
For the week ending November 14, initial claims for unemployment insurance (UI) totaled 7,243, down 313 claims, or 4.1 percent, compared to last week’s total of 7,556 claims, according to finalized data from the Nevada Department of Employment, Training, and Rehabilitation (DETR). Through the week ending November 14, there have been 760,038 initial claims filed in 2020, 738,386 of which have been filed since the week ending March 14.
Nevada’s insured unemployment rate, which is the ratio of continued claims in a week to the total number of jobs covered by the unemployment insurance system (also known as covered employment), fell 0.7 percentage points to 6.9 percent. It should be noted that the calculation of the insured unemployment rate is different from that of the state’s total unemployment rate.
The economy of Las Vegas is largely driven by the tourism industry which took a massive hit due to the COVID-19 pandemic. Tourists bring in billions of dollars and support thousand do jobs. Nevada and the city of Las Vegas in particular were predicted to be the most affected, as they rely on the tourism industry more than most states.
The city has suffered great financial losses. As was expected, real estate sales also took a dip in this crisis. On March 29, a statewide moratorium was issued by Nevada Governor Steve Sisolak against evictions during the state of emergency brought on by the pandemic.
On April 7, to keep Nevada families in their rental homes and prevent further suffering, the Nevada Attorney General Aaron D. Ford announced $2 million in settlement funding for emergency rental assistance transferred to United Way of Southern Nevada and United Way of Northern Nevada and the Sierra.
In March, 208,869 unemployment insurance claims were filed in Nevada, a massive 2,125 percent jump from the same period one year prior. Due to rising economic uncertainly of the likes of the infamous recession cou0pled with stay-at-home order, the number of home sales in the Las Vegas housing market for April dropped sharply when compared to March.
Many construction projects were also canceled or postponed indefinitely. Some real estate experts are also predicting a fast turnaround of the economy of Las Vegas once again when the viral pandemic eventually starts diminishing.
Redfin, a real estate brokerage, reported that 42.3% of Las Vegas-area homes had multiple offers during four weeks ending May 10. According to Las Vegas Realtors, there was a three-month supply of available homes in Southern Nevada in April, up 48.7% from March and up 18.4% from the prior year. This indicates that it was still a seller's real estate market.
The sale of pre-owned homes in April dropped 31 percent from the same month in 2019. The sale of condominiums and townhouses was down 42%. The median price of a single-family house was $310,000, down 2.8% from the previous month. The median price of a condo or townhouse was $180,000, also down 3% from the previous month.
In May, the Las Vegas house sales plunged again from year-ago levels, according to Las Vegas REALTORS®. However, sales contracts have been increasing at a steady and significant rate since mid-April. Southern Nevada's housing market saw 1,702 single-family houses sold in May, down 13.6% from April and down 48.1% from May 2019.
The median sales price of previously owned single-family homes increased from $310,000 in April to $315,000 in May, which is up 1.6% and up 5% from the prior year. The median price of sales in May was $315,000, up 1.6 percent from April and 5 percent year over year.
3,231 houses were listed on the market in May, up 28.4 percent from April but down 29.7 percent from May of last year. 5,799 single-family houses were listed without offers at the end of May, down 4% from April and down 26.2% from the prior year. There were 2,851 pending sales, down 10% from last May.
This marked the highest amount of pending sales in 2020. There is now a 3.4 months housing supply in Southern Nevada, up 11.1% from April and up 42.2% from the prior year.
There were 2,464 single-family houses that sold in June, up 44.7% from May, but down 15.1% from June 2019. The median sales price of previously owned single-family homes increased from $315,000 in May to $325,000 in June, which is up 3.2% and up 6.9% from the prior year. New listings jumped month-to-month but were still far below year-ago levels.
In June, there were a total of 3,244 new listings, which was up .4% from May but down 22.7% from the prior year. It amounted to 2.1 months housing supply in Southern Nevada, down 39.5% from May and down 23.4% from the prior year.
According to the association of local realtors (LVR), July had the most amount of home sales since 2017 with more than 4,000 existing homes sold. In July, the median sales price of previously owned single-family homes, which comprises the bulk of Southern Nevada's housing market, increased to $330,000, a year-over-year increase of 8.9 percent.
It was a 1.5 percent rise from the previous record high in June. Closed sales increased by 34.9 percent from June and 5.3 percent from July 2019. For condos and townhomes, the median sale price for a unit in July was $196,000, up by a whopping 12% from July 2019.
The latest report for October (give at the top) shows that prices are rising and inventory is declining. There aren't enough homes on the market to meet the demand increased by the pandemic.
Las Vegas Real Estate Foreclosure Trends
Are you looking for a foreclosure home in Las Vegas? Nevada was at the nexus of the 2007 housing crash. Nevada spiraled to the second-highest foreclosure rates in the nation, after New Jersey, with upwards of a quarter of Nevada mortgages underwater.
As per the Las Vegas foreclosure data by Zillow, in Las Vegas, 1.4 homes are foreclosed (per 10,000). This is the same as the Las Vegas-Henderson-Paradise Metro value of 1.4 and also greater than the national value of 1.2.
The percent of delinquent mortgages in Las Vegas is 1.2%, which is higher than the national value of 1.1%. The percent of Las Vegas homeowners underwater on their mortgage is 7.2%, which is higher than Las Vegas-Henderson-Paradise Metro at 7.1%.
The number of mortgage delinquencies in Nevada had reached its lowest point in years. Las Vegas Realtors reported that short sales and foreclosures combined accounted for 2.7% of all existing local property sales in January 2020.
That compares to 2.8% of all sales one year ago, 4.3% two years ago, and 11% three years ago. Unfortunately, then the coronavirus came along and set things back once again. Due to the tourism-dependent economy, Nevada has been rocked by record job losses due to the ongoing pandemic, raising the prospect of waves of missed mortgage or rent payments.
Around 271,530 initial unemployment insurance claims were filed in Nevada this year through the week ending April 4 – more than the last two years combined, according to the Nevada Department of Employment, Training, and Rehabilitation. With the rise in job losses, mortgage delinquencies are bound to increase in Nevada, especially in the city of Las Vegas.
Finalized data from the Nevada Department of Employment, Training, and Rehabilitation (DETR) show initial claims for unemployment insurance (UI) totaled 7,941 for the week ending October 3, up 416 claims, or 5.5 percent, compared to last week's total of 7,525 claims.
Through the week ending October 3, there have been 710,347 initial claims filed in 2020, 688,695 of which have been filed since the week ending March 14.
Nevada's insured unemployment rate, which is the ratio of continued claims in a week to the total number of jobs covered by the unemployment insurance system (also known as covered employment), fell by 1.25 percentage points to 12.5 percent
In July, with forbearance's in play Las Vegas the lowest amount of foreclosures and short sales in the history of Las Vegas. These so-called distressed sales accounted for just 1.2 percent of all existing local property sales in July.
There are currently 847 properties in Las Vegas, NV that are in some stage of foreclosure (default, auction, or bank-owned) while the number of homes listed for sale on RealtyTrac is 5,791. In August, the number of properties that received a foreclosure filing in Las Vegas, NV was 150% higher than the previous month and 98% lower than the same time last year.
As of now (according to RealtyTrac), in Las Vegas, the zip code with the highest foreclosure rate is 89107, where 1 in every 13817 housing units is foreclosed. 89123 zip code has the lowest foreclosure rate, where 1 in every 27935 housing units becomes delinquent.
|Potential Foreclosures in Las Vegas||847 (RealtyTrac)|
|Homes for Sale in Las Vegas||5791|
|Median List Price||$312,500 (1% rise vs July 2019)|
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 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. Let's continue to explore the Las Vegas housing market to understand what it will look like in 2020.
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 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 up 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 courts, 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 home. 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 by giving tenants more time to go through the evictions 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 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 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 the 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 October 2020, the average rent for an apartment in Las Vegas, NV is $1186 which is a 6.07% increase from last year when the average rent was $1114, and a 1.6% decrease from last month when the average rent was $1205.
- One-bedroom apartments in Las Vegas rent for $1061 a month on average (a 9.8% increase from last year).
- Two-bedroom apartment rents average $1263 (a 8.71% increase from last year).
- The average apartment rent over the prior 6 months in Las Vegas has increased by $38 (3.3%).
- One-bedroom units have increased by $58 (5.8%).
- Two-bedroom apartments have increased by $76 (6.4%).
The Las Vegas real estate market will be a great place to invest in real estate in 2021 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.
Before the impact of the pandemic, the average apartment rent was around $1,108, a 6% increase compared to the previous year, according to RentCafe. Another report, issued by the Nevada State Apartment Association (NVSAA) based on data provided by CoStar, shows the average asking rent for an apartment in the Las Vegas metro area at the end of 2019 was $1,080 per month.
Average rents are up 4.5 percent from one year ago. That compares to annual rent growth of 7.4 percent during the previous year. At the end of 2019, the apartment vacancy rate in the Las Vegas metro area was 6.5%. That's down from nearly 11% during the depths of the Great Recession, the report found.
Unlike some areas, the Las Vegas housing market isn't going to see a sharp decline in rents due to new construction. Wages in the area, for example, haven't risen in tandem with housing prices, pushing many to rent whatever properties they can find that fits their budget. This may prevent prices in the Las Vegas real estate market from going too high but won't prevent them from rising along with the rate of inflation.
The average size for a Las Vegas apartment is 894 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.
- One-bedroom apartments in Las Vegas rent for $1048 a month on average (an 8.87% increase from last year).
- two-bedroom apartment rents average $1287 (a 12.12% increase from last year).
- The average apartment rent over the prior 6 months in Las Vegas has increased by $155 (14.8%)
- One-bedroom units have increased by $135 (14.8%).
- two-bedroom apartments have increased by $189 (17.2%).
The most affordable neighborhoods in Las Vegas are Beverly Green, where the average rent goes for $791/month, Crestwood, where renters pay $791/mo on average, and Francisco Park, where the average rent goes for $791/mo. Other good neighborhoods for affordable rentals include Hillside Heights ($791), Huntridge Park ($791), and John S. Park ($791), where the asking prices are below the average Las Vegas rent of $1,108/mo.
|Las Vegas Neighborhood||Average Rent|
|John S. Park||$791|
California's Loss Is Nevada's Gain
A $300,000 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 $600,000 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 and enjoying 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 hope 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 the 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, and 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, which 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 the toughest real estate markets for Millennials 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%. 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.
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.
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.
Is It The Right Time To Invest In Real Estate? – The national homeownership rate is on the decline for the first time since 2017. As demographics change and baby boomers retire, you're seeing Millennials who may not be ready to buy houses. In 2018, Millennials made up about 22 percent of the population in the United States.
They're choosing to rent over buying a single-family home or an apartment. Rising home prices and shortage of starter homes have not left Millennials many choices but to delay homeownership. Moreover, it's even harder to take out a mortgage for those who have student loan debt.
Latest Market Data, Trends, and Statistics
LAS VEGAS' ECONOMIC & JOB GROWTH INDICATORS
Loss of California