Nevada Real Estate Market Trends & Analysis


Few markets had more ground to make up from the last recession than the Nevada real estate market. Real estate in Nevada was hit hard and prices tumbled to nearly one-third of their current level. Nonetheless, Nevada real estate persevered and came out on the other end better. After eight consecutive years of appreciation, however, real estate in Nevada is starting to stabilize. Prices are still expected to appreciate, but not at the same rate residents have grown to expect in recent history. Instead, home prices are forecasted to increase more in line with historic averages. Despite nearly tripling in price since 2012, Nevada has managed to maintain a balanced market that now favors everyone: buyers, sellers, renters and investors.

The Top Nevada Real Estate Markets


While the best real estate market in Nevada is up for debate, here’s a list of the cities investors may want to pay special considerations to:

Nevada Real Estate Fees & Regulations

Real Estate

Closing Conducted by: Title Companies, Escrow Companies, Lenders
Conveyance: Grant Deed

Foreclosure Procedure

Primary Foreclosure Method: Non-Judicial
Process Period: 3 - 5 Months
Notice of Sale: Trustee
Redemption Period: None

Taxes

Income Tax: None
Corporate Tax: None
Sales Tax: 6.85%
Estate Tax: No
Inheritance Tax: No
Median Property Tax: 0.84%
Property Taxes by County: http://www.tax-rates.org/nevada/property-tax#Counties

Average Transactional Costs

Closing Cost: $2,265.00
Transfer Fee: Transfer fee: Up to 700,000 county population 0.13%; over 700,000 county population 0.25%; Tax regardless of size 0.26%
Origination Fee: $1,570.00

Overview


  • Median Home Value: $302,437
  • 1-Year Appreciation Rate: +1.5%
  • Median Home Value (1-Year Forecast): +2.7%
  • Median Rent Price: $1,540
  • Price-To-Rent Ratio: 16.36
  • Average Days On Market: 76
  • Unemployment Rate: 3.8% (latest estimate by the Bureau Of Labor Statistics)
  • Population: 3,034,392 (latest estimate by the U.S. Census Bureau)
  • Median Household Income: $55,434 (latest estimate by the U.S. Census Bureau)
  • Percentage Of Vacant Homes: 14.11%
  • Foreclosure Rate: 1 in every 1,978 (5.0%)

Median Home Prices In Nevada


The median home price in Nevada is $302,437, which is a far cry from where things were no more than eight years ago. As recently as February 2012, in fact, Nevada saw its median home value drop to about $133,000 during the Great Recession. Since that time, the state of Nevada has ridden a wave of positive indicators, not the least of which were responsible for a 127.3% increase. Few markets across the country, for that matter, can even come close to matching the rate of appreciation Nevada has seen over the course of the last decade. It is worth noting, however, that the appreciation of real estate in Nevada was high because of how hard the state was hit by the recession. Simply put, real estate in Nevada got hit so hard that it had more room for growth than just about everywhere else. That said, Nevada has managed to recoup all of its losses, and then some.

To put things into perspective, the median home value in the United States is $244,054—or $58,383 less than that of Nevada’s median home value. Since February 2012 (right around when the national real estate market appears to have bottomed out as well), median home values across the whole country jumped 52.5%.

Real estate in Nevada (on average) has appreciated at a much faster pace than the national average for the better part of a decade. However, the last year has seen the national market make up some ground. With little room left for appreciation in the Nevada housing market, price increases have tempered, allowing the rest of the country to catch up. In the last year, in fact, real estate in Nevada only appreciated 1.5% (on average). The median home value across the United States, on the other hand, jumped 3.7% over the course of last year (November 2018 to December 2019).

Median Rent Prices In Nevada


There isn't a single market where rental rates aren’t influenced by their home price counterparts. More often than not, changes in home values (and inventory levels) will be reflected in local rental rates. In the event home prices appreciate, many prospective buyers may be forced to remain renters, effectively increasing competition in the rental market. The more people that are priced out of buying, the more competition there will be for rental housing, which would explain the price correlation. Consequently, renters in Nevada are experiencing the same phenomenon.

Following in the wake of nearly a decade’s worth of appreciation, Nevada rental rates have increased for eight consecutive years. Since the recovery really started to take hold (the first quarter of 2012), rental rates in Nevada have increased 25.2%—going from $1,230 a month to $1,540 a month. At that price, tenants will pay an average of $18,480 a year to remain renters. With a price-to-rent ratio of 16.36, however, it’s usually better to rent in Nevada than to buy a house.

Nevada Foreclosure Trends & Statistics


The Nevada housing market has come a long way since the recession, but that doesn’t mean there is no room for improvement. One of the most pressing issues to result from the last downturn is still prominent today: foreclosures. To be perfectly clear, Nevada is facing a relatively high rate of foreclosure. With one in every 1,978 homes in some state of distress (default, auction or bank owned), Nevada’s foreclosure rate is officially somewhere in the neighborhood of 5.0%. To be perfectly clear, the foreclosure rate across the United States is approximately 3.6%.

It is worth noting, however, that while the Nevada real estate market currently boasts a high foreclosure rate, things are starting to look more encouraging. Thanks—in large part—to improving economic fundamentals, Nevada has seen a drop in foreclosure filings. As recently as December, in fact, “the number of properties that received a foreclosure filing in NV was 10% higher than the previous month and 17% lower than the same time last year,” according to RealtyTrac. The decrease is particularly encouraging for Nevada residents, as the national foreclosure rate was 2.0% higher than the same time last year.

The difference in foreclosure filings over the last year may be attributed to Nevada’s latest bout of appreciation. Homeowners once burdened by their underwater positions have found themselves with more equity, which would help explain why the state was actually able to reduce foreclosure filings. Nonetheless, there are still several counties with higher distributions of foreclosures than others. The following counties, in fact, represent the areas with the highest distributions of distressed homes across the entire state:

  • Nye (1 in every 1,490)

  • Elko (1 in every 1,621)

  • Clark (1 in every 1,707)

  • Lyon (1 in every 1,768)

  • Humboldt (1 in every 2,485)


Tax Lien Investing


  • Tax Lien or Deed: Tax Lien and Tax Deed state

  • *Most counties have only Tax Deed sales
  • Interest Rate: 10%

  • Redemption Period: 2-3 years (depending on property type)

Real Estate Investing In Nevada


Real estate investors and homeowners across the country have enjoyed several years of seller gains and attractive ROI (return on investment). According to Attom Data Solutions’ most recent Home Sales Report, in fact, the average home seller in 2019 “realized a home price gain of $65,500 on the typical sale, up from $58,100 last year and up from $50,027 two years ago.” Profits were calculated using median purchase and resale prices, and currently represent a 13-year high.

The report went on to say that profits “represented a 34 percent return on investment compared to the original purchase price, up from 31.4 percent last year and up from 27.4 percent in 2017, to the highest average home-seller ROI since 2006.” Simply put, average U.S. home seller profits are higher than they have been in a really long time.

It is worth noting, however, that profits aren’t only realized at the time of a sale. The cost of acquiring a home plays a huge role in calculating one’s ROI, too. Lower purchase prices have become synonymous with more attractive profit margins, which is why most investors choose to invest in distressed homes. More often than not, distressed properties award savvy investors the opportunity to capitalize on attractive profit margins across the country, and Nevada is no exception.

Real estate investors in Nevada who want to increase their odds of finding a good deal with attractive profit margins should pay special considerations to pre-foreclosures. Making up 47.8% of the state’s distressed inventory, pre-foreclosures are the most abundant source of foreclosures in Nevada.Perhaps even more importantly, investors need only to take a trip to their local courthouse to identify said properties; there, they’ll be able to identify homeowners who are behind on payments, and perhaps even willing to sell at a discount.

Of course, knowing where to find deals with attractive profit margins is one thing; knowing what to do with them once they are acquired is an entirely different thing. Nevada real estate investors need to not only know where to find good deals, but they also need to know which exit strategies to execute, which begs the question: What should real estate investors in Nevada do with the homes once they are acquired? Should they rehab and flip them? Should they look into wholesaling? Should they build a long-term, passive income portfolio?

Much like the rest of the country, real estate in Nevada is (on average) more expensive than it has been in quite some time. As a result, profit margins for real estate investors are growing thinner. It is getting harder and harder to justify rehabbing exit strategies when acquisition costs continue to increase. That’s not to say rehabbing and flipping aren’t viable exit strategies in the Nevada housing market, but rather that opportunities are growing slimmer with each price increase. Therefore, instead of focusing primarily on rehabbing, real estate investors in Nevada may want to consider building a long-term passive income portfolio. If for nothing else, years of cash flow could easily help oddest today’s higher purchase prices.

Nevada Housing Market Predictions


Real estate in Nevada has done its best to mimic national trends. For the better part of a decade, in fact, real estate in Nevada has exhibited many of the same characteristics as its national counterpart. Price increases, confidence in the market and several other indicators are in line with national trends, but what does that mean moving forward? What can Nevada real estate investors, homeowners and prospective buyers expect for the foreseeable future?

  • Mesquite could see an influx of buyers: With a median home value nearly $22,000 less than the state average, Mesquite looks like it may represent a bargain. That said, there’s reason to believe Mesquite should see an influx of younger buyers who are looking to find cheaper alternatives to cities like Reno, Las Vegas and Carson City. Having already appreciated more than the state average in the last year, Mesquite’s median home value should continue the trend well into 2020. The attention generated by the cities relative affordability will potentially attract new buyers and stimulate higher appreciation rates. As a result, Mesquite could be a good place for local investors to consider looking.

  • Inventory will drive appreciation: Not unlike every other state across the country, the Nevada real estate market has found itself lacking in the inventory department. Most of Nevada’s largest cities, for that matter, have far fewer available listings than balanced markets typically exhibit. As a result, competition over the houses that are available has simultaneously increased prices and made it more difficult for buyers. And while new inventory is expected to come eventually, new listings are still a ways out, which means prices should increase for the foreseeable future

  • Optimism will support an active market: Despite the state’s lack of available housing and historically high prices, the local real estate market has seen optimism flourish. Thanks, in t large part, to a strengthening economy, Nevada now has more people who are ready and willing to participate in the market, and it’s their presence that will serve as a positive catalyst moving forward.

Nevada Real Estate Market Summary


The Nevada real estate market appears to have kept pace of national averages, and even outpaced some major indicators. Appreciation rates, home values, demand and inventory are all closely aligned with the rest of the country. As a result, real estate in Nevada has been allowed to thrive. Everyone partaking in the market — buyers, sellers and investors — has found at least some reason for optimism. Everyone in the Nevada housing market, for that matter, should be excited about where things appear to be headed for the foreseeable future.

Sources:



https://www.census.gov/quickfacts/fact/table/NV/PST045218
https://www.bls.gov/regions/west/nevada.htm#eag
https://www.realtytrac.com/statsandtrends/foreclosuretrends/nv/
https://www.realtytrac.com/statsandtrends/nv/
https://www.realtytrac.com/statsandtrends/
https://www.realtytrac.com/statsandtrends/foreclosuretrends/
https://www.zillow.com/nv/home-values/
https://www.zillow.com/home-values/
https://www.nerdwallet.com/mortgages/mortgage-calculator/calculate-mortgage-payment/nevada
https://www.attomdata.com/news/market-trends/home-sales-prices/attom-data-solutions-year-end-2019-u-s-home-sales-report/
https://www.zillow.com/research/us-total-housing-value-2019-26369/

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