Almost in every way, the Las Vegas real estate market is white-hot.
Homes are selling fast, prices are hitting historic highs every month, and rents are skyrocketing. People are in a housing frenzy, sparking affordability concerns and prompting more buyers than usual in the valley to look for homes in the cheaper countryside of Pahrump, some 60 miles away.
So how long can the hot streak last and how will it all end?
Short answer: who knows?
Housing markets are always subject to ups and downs, especially in Las Vegas, and no boom lasts forever. But the plummeting sales totals this spring were subsequently reversed, and overall the market is still slumping, thanks in large part to an extended period of cheap money that made it possible buyers to stretch their budgets.
In total, Las Vegas area homes are selling nearly 42% relative to long-term trends, making it the ninth most overvalued market in the country, according to a new report professors from Florida Atlantic University and Florida International University.
Vivek Sah, director of the Lied Center for Real Estate at UNLV, pointed out to me that value is relative. Like many things, real estate is only worth what someone is willing to pay for it.
The current price streak is not sustainable, Sah said, but he believes the market will go down, not plunge like it did a decade ago after a buying spree fueled by easy money and heavy investors.
For now, however, Las Vegas is experiencing rapid sales and rising record prices.
The median selling price of previously owned single-family homes – the bulk of the market – was a record $ 405,000 in July, up nearly 23% from the previous year, the Las Vegas Trade Association reported. Realtors.
What’s more, 89 percent of homes that traded hands last month had been on the market for 30 days or less, up from about 60 percent of sales in July of last year.
Buyers are also paying record amounts for new construction. The median closing price for builders in southern Nevada hit an all-time high of around $ 419,950 last month, up 13% from the previous year, according to Home Builders Research.
The Las Vegas rental market has also accelerated as people, including newcomers from more expensive cities, seek more space during the pandemic, a change that has also helped fuel sales.
The typical Las Vegas-area home rental rate climbed nearly 23% year-on-year in July to $ 1,662, compared with an increase of about 9% nationwide to $ 1,843 , recently reported the Zillow ad site.
Rents are climbing here at the second fastest rate in the country and at increased speed. In January, Las Vegas rents rose 6.7% from a year earlier, Zillow previously reported.
The current frenzy is by no means the same as the bubble of 15 years ago which, when it burst, saw house prices plummet and people across the valley lose their homes. because of the seizure.
Builders built many more homes at the time, developers decided to fill the valley with condo towers, and the resale prices of the homes, when adjusted for inflation, were higher than they were. are not now.
It is not clear where the Las Vegas market is heading today. But if prices come down, local owners can only hope they don’t have to prepare for the impact.