Las Vegas, NV Real Estate Market Trends & Analysis [Updated 2020]

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The Las Vegas real estate market entered into 2020 firing on all cylinders. Even as uncertainty started to spread in the wake of the Coronavirus, the median home value in Las Vegas reached an all-time high. Perhaps even more importantly, demand remained intact as prices continued to increase. Sin City was thriving off of the momentum it had built in 2019. Nonetheless, there wasn’t a single market across the country which was able to escape the negative impact of government-mandated “shelter-in-place” orders brought about by COVID-19, and Las Vegas was no exception. With an economy deeply rooted in the hotel sector, Las Vegas took a significant hit when quarantine orders were levied on the entire city. Sales of existing houses were down from the previous year as much as 30.0% in April, as activity has been brought to a standstill.

The lack of activity has already witnessed a slight drop in home values, but the decline is only expected to be temporary. Hotels are already starting to reopen and the economy is starting to show signs of life. As a result, it’s only a matter of time until the local housing market regains the momentum it had earlier in the year. Prices may dip over the next six months, but long-term expectations are positive. Home values should return to their record highs, and perhaps even surpass them. The lack of available inventory will only be compounded by stagnant homebuilders over the course of the pandemic, and prices should increase sooner rather than later. As a result, the Las Vegas real estate investing community may be able to turn the disruption into a unique buying opportunity. Those who position themselves well now could find the latter half of the year to bear lucrative fruit.

Las Vegas Real Estate Market 2020 Overview

  • Median Home Value: $290,535

  • 1-Year Appreciation Rate: +1.8%

  • Median Home Value (1-Year Forecast): -1.3%

  • Average Days On Market (Zillow): 88

  • Median Rent Price: $1,500

  • Price-To-Rent Ratio: 16.14

  • Unemployment Rate: 6.7% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 651,319 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $54,694 (latest estimate by the U.S. Census Bureau)

  • Percentage Of Vacant Homes: 13.03%

  • Foreclosure Rate: 1 in every 8,187 (1.2%)

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Las Vegas housing market

2020 Las Vegas Real Estate Investing

Las Vegas real estate investing may have taken a step back in the face of COVID-19, but the retraction has nothing to do with the prospects of investing in Las Vegas real estate. The only reason the Las Vegas real estate investing community has been less active is because of the “shelter-in-place” orders issued by the government. All things considered, now looks like a great time to invest in Las Vegas real estate, and as the quarantine starts to ease the prospects start to look even more attractive.

It is worth noting, however, that while investing in Las Vegas real estate is just as attractive now as it was before the pandemic, the most relevant exit strategies may have changed. Over the past decade, in fact, the Las Vegas real estate market had become synonymous with rehabs (otherwise known as flips). As prices recovered from the Great Recession, investors were able to find great deals with attractive profit margins. However, median home values hit record highs as recently as April. The margins that were once spread across an entire market are growing harder to find. Simply put, homes have appreciated so much over the last 10 years that great flip deals are growing harder to find. That’s not to say rehabbing isn’t a viable exit strategy (it very much still is), but rather that there are other investing methods that look more attractive under today’s market conditions. Therefore, in addition to rehabbing, Las Vegas real estate investors need to prioritize the following exit strategies:

  • Buy-And-Hold Real Estate

  • Commercial Investing

  • Real Estate Investment Trusts (REITs)

  • Tax Lien Investing

Those who are interested in the Las Vegas real estate investing industry should pay special considerations to building a rental portfolio. While acquisition costs are historically high at the moment, the cost of borrowing is historically low. In an attempt to stimulate the housing market in every city across the country, the Federal Reserve has dropped interest rates to near all-time lows. As of April, the average rate on a 30-year fixed-rate loan was 3.31%, according to Freddie Mac. April marked the lowest average mortgage rate for an entire month ever. While rates have already increased slightly in March, they are still historically low, and significantly reduce the cost basis of buying a home. Passive income investors, therefore, have more incentive to use traditional financing to buy a home in Las Vegas sooner rather than later.

Lower mortgage rates make the prospect of buying a home with traditional financing more attractive. That said, there’s another way for Las Vegas real estate investors to justify buying a rental property in today’s market: cash flow. Several years of cash flow, in fact, can easily warrant an acquisition at today’s high prices. With a median rent price of $1,500, many long-term investors should be able to pay down their mortgage using someone else’s money.

In addition to low mortgage rates and the city’s cash flow potential, Las Vegas has a price-to-rent ratio that favors rental property owners. At 16.14, the price-to-rent ratio in the Las Vegas housing market suggests investors are currently the beneficiaries of good rental demand. Due, in large part, to the city’s relatively high home prices, fewer people can afford to buy, which simultaneously drives up rental demand and the amount landlords are able to charge. The stars are starting to align for rental property owners, which begs the question: Is buying a condo in Vegas a good investment? Provided the cash flow warrants the acquisition cost, now may be a great time to invest in a condo or single-family home to rent out. Not only may investors capitalize on cash flow, but there’s a good chance they’ll benefit from appreciation over the long run.

Outside of the immediate opportunities awarded to rental property owners, real estate investors in Las Vegas may want to wait and see what the future holds for tax lien investing strategies. The wake of the Coronavirus is expected to result in financial hardships for millions of Americans. In the event many homeowners aren’t able to keep up with their taxable obligations, there may be an influx of opportunities later in the year to acquire tax lines from local municipalities. Local investors who are able to familiarize themselves with the process today may find themselves with ample opportunities to capitalize on the market’s new landscape in the future.

Those investors who are slightly more risk averse, however, may want to consider the buying opportunities created by the Coronavirus in the stock market. Real estate investment trusts are almost all selling at a discount at the moment and offer some exposure to the real estate industry without buying physical assets. With the lingering impact of the Coronavirus still unknown, investing in REITs may be a great way to get into the market at a relatively low price and with substantially less exposure to risk.

2020 Foreclosure Statistics In Las Vegas

The Las Vegas real estate market was the poster child of the foreclosure industry about 10 years ago. Few markets, if any, were hit harder over the course of the Great Recession. It is worth noting, however, that the La Vegas housing market has made up a lot of ground since repossessions ran rampant. Thanks to a dramatically improved jobs market and plenty of demand, Las Vegas foreclosures have decreased significantly.

According to RealtyTrac, there “are currently 1,365 properties in Las Vegas, NV that are in some stage of foreclosure (default, auction or bank owned).” That number accounts for approximately one in every 8,187 homes in Las Vegas, NV, or a 1.2% foreclosure rate. To put things into perspective, the entire country has a foreclosure rate of 1.0%. For a while, in fact, foreclosures have been on the decline across the country.

As recently as April, “the number of properties that received a foreclosure filing in Las Vegas, NV was 79% lower than the previous month and 81% lower than the same time last year,” according to RealtyTrac.

Despite being down approximately 80.0% from this time last year, pre-foreclosures make up the majority of the city’s distressed homes. In fact, 46.0% of Las Vegas’ foreclosures haven’t even been repossessed, but are rather at risk of being repossessed, which leaves a window of opportunity open for opportunistic investors. Bank-owned assets and auction inventory make up the remaining foreclosure inventory in the Las Vegas real estate market, 36.5% and 17.5% respectively.

While foreclosures have declined, the following Zip Codes represent the areas in Las Vegas with the highest distributions of distressed homes:

  • 89179: 1 in every 2,236 homes is currently distressed

  • 89120: 1 in every 2,535 homes is currently distressed

  • 89135: 1 in every 3,256 homes is currently distressed

  • 89131: 1 in every 3,422 homes is currently distressed

  • 89144: 1 in every 4,110 homes is currently distressed

It is important to note that the decline in foreclosures may be short lived. The latest data presented by RealtyTrac hasn’t accounted for the toll of the Coronavirus. While it is still too early to tell exactly how the foreclosure industry will unfold over the course of 2020, it’s fair to assume there will be an increase. Forbearance programs should keep homeowners in their homes, but they are nothing more than a temporary fix. Sooner or later mortgage payments will need to be made current, and those who can’t afford to keep up with obligations could find themselves distressed. Therefore, investors who position themselves well today and line up financing could find the latter half of 2020 to be a great time to acquire a deal.

2020 Median Home Prices In Las Vegas

The median home value in Las Vegas has increased every year since 2012, when the country was first starting to remove itself from the depths of the last recession. However, the presence of the Coronavirus threatens to interrupt the long-running trend, which begs the question: Are house prices dropping in Las Vegas? Will the lack of activity prevent the city from realizing a ninth consecutive year of price gains?

At $290,535, the median home value in Las Vegas is historically high. No more than eight year ago (May 2012), the city’s median home value was approximately $124,000. In that time (from May 2012, to May 2020), the median home value in Las Vegas appreciated by as much as 134.3%. Drafting off of a strengthening economy, increased consumer sentiment and a lack of inventory, real estate in Las Vegas was able to appreciate faster than the national average.

Despite generating considerable momentum, appreciation rates in Las Vegas are expected to temper for the foreseeable future. The introduction of the Coronavirus and “shelter-in-place” orders have decreased housing activity when the market was otherwise expecting a busy spring. Over the next 12 months, Zillow expects home values in Las Vegas to drop a modest 1.3%. Nonetheless, the drop is only expected to be temporary, which has many people asking the same question: Is it a good time to buy a house in Las Vegas 2020?

It is too early to tell how big of an impact the pandemic will have or how long it will last, but today is looking like a great time to buy a home in the Las Vegas real estate market. Not only has appreciation tempered and created a buying window, but it’s safe to assume prices will continue increasing once given the chance. If for nothing else, the same pandemic that has caused prices and activity to drop in the short term has also prevented homebuilders from increasing inventory levels. As a result, the same lack of inventory that has increased prices over the last decade are expected to persist, if not become even more tight. In fact, pent-up demand commanded with even less inventory could drive prices to record highs.

Las Vegas Real Estate Market: 2018 Summary

Few housing markets experienced a boom in sound fundamentals on the same level as the Las Vegas real estate market in 2018. Consequently, Sin City has become the beneficiary of some rather impressive appreciation rates, the likes of which many homeowners thought were impossible at the time. Median home values in Las Vegas actually increased at a rate of more than two times the national average from 2017 to 2018, and the gains have continued to today. There is no doubt about it: the Las Vegas real estate market was firing on all cylinders just a few years ago, and the market hasn’t taken its foot off the gas.

Las Vegas Real Estate Investing 2018

According to Las Vegas real estate news at the time, few housing markets across the country benefited greater from sound fundamentals than Sin City. Of those fundamentals, few were more pronounced in 2018 than the appreciation of home values. In one year’s time, median home prices in Las Vegas shot up 16.6%, and landed somewhere in the neighborhood of $247,700, according to Zillow. To put Las Vegas’ numbers into perspective, the median home value in the United States went up 7.6% in one year. Real estate in Las Vegas was about as hot as Las Vegas Boulevard on a summer day.

In 2018, Las Vegas saw a 34.0% decline in homes that received a foreclosure filing. According to RealtyTrac, there were about 3,270 homes in some stage of foreclosure (default, auction or bank owned) about two years ago. More specifically, however, there were about 3,270 opportunities for investors in tune with the local market. If for nothing else, distressed properties, otherwise known as foreclosures, represented a great opportunity for those interested in Las Vegas real estate investing.

The median sales price of a non-distressed home was $230,000.  The median sales price of a foreclosure home was $192,000, or 17.0% lower than non-distressed home sales, according to RealtyTrac. For those of you keeping track, distressed homes could be acquired for an average of $38,000 less than their non-distressed counterparts at the time.

Las Vegas Real Estate Market: 2016 Summary

  • Median Home Price: $242,300

  • 1-Year Appreciation Rate: 12.0%

  • 3-Year Appreciation Rate: 41.0%

  • Unemployment Rate: 6.9%

  • 1-Year Job Growth Rate: 2.7%

  • Population: 603,488

  • Median Household Income: $51,214

Las Vegas Real Estate Investing 2016

The Las Vegas real estate market was booming in 2016, as home prices, appreciation rates, and home affordability were all higher than the national average. The median home price was $242,300 during the second quarter, compared to the national average of $239,167. Gains in the previous three years extended the trend of positive price growth since the recession.

As of July 2016, there were 8,501 properties in the Las Vegas area in some stage of foreclosure. According to RealtyTrac, the number of Las Vegas foreclosures in the month of July was 14.0% higher than the previous month and 24.0% lower than the same period in 2015. Additionally, the number of REO properties in Las Vegas jumped 81.3% from the previous month, but only 1.8% from one year earlier.

Las Vegas real estate investments

Las Vegas Real Estate Market: 2015 Summary

  • Current Median Home Price: $220,500

  • 1-Year Appreciation Rate: 9%

  • Unemployment Rate: 6.2%

  • 1-Year Job Growth Rate: 2%

  • Population: 603,488

  • Median Income: $51,057

Las Vegas Real Estate Investing 2015

News suggested Las Vegas was closer to long-term stability than it had been in the last five years. Over those five years, the region saw significant improvements. Trends in the area indicated no significant fluctuations, suggesting true normalcy was just around the corner. The city’s stimulation was due, in large part, to a heavy presence of foreign and domestic investors looking to capitalize on the buy and hold market. Subsequently, the luxury home market realized significant increases in activity over a similar period, but began to temper from 2014. By the fourth quarter of 2014, cash purchases were at a five-year low. Such a development was shocking to see in a city where cash purchases were once so prominent.

The market boasted a median home price of $203,000, nearly $14,000 less than the national average at the time. However, in getting there, Las Vegas had to make significant strides over the course of a year. Homes appreciated 11.6% in one year’s time. That said, just three short years prior, Las Vegas homes appreciated 65.4%. Despite the appreciation, Zillow named Las Vegas one of the country’s best markets for homebuyers.

Most of the demand came from Millennials, who were largely neglected for the better part of a decade because of a number of economic factors. That said, millennials got their homebuying feet wet, as rents exceeded record highs and home prices stabilized. The expansion of the economy made it more reasonable to own a home than in previous years, and millennials took advantage of Vegas’ affordable marketplace.

Were it not for a poor job sector, the Las Vegas real estate market could have served as a prominent leader in the economic recovery. However, Las Vegas’ unemployment rate lagged behind the national average. The city’s unemployment rate was 7.1%, or 1.2% above the national average. Despite 2015s high unemployment rate, it was still a marked improvement over the previous year.

Las Vegas real estate investing stats

Las Vegas Nevada County Map:

Las Vegas Nevada real estate map

Las Vegas Real Estate Market Summary

The Las Vegas real estate market has made up a lot of ground since the Great Recession. As one of the hardest hit markets in the country, Sin City saw its foreclosure rate spike. However, after years of economic growth and the placement of sound fundamentals, Vegas is positioned to help everyone: investors, buyers and sellers. Nonetheless, the Coronavirus will provide a temporary obstacle. Housing activity will drop for the foreseeable future, but as the economy begins to open back up, pent-up demand could stimulate a very active market. Las Vegas real estate investors who position themselves to take advantage of the new landscape could find the next few years to be a great time to invest.

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.
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