Las Vegas Housing Market
The Las Vegas real estate market was one of the hottest housing markets in the US. It has since cooled as more inventory is being listed and prices decline.
For landlord investors, the inability of buyers to buy in the market (mortgage rates) yet stable job market and low taxes mean migrants will see Vegas (southwestern city) as a desirable destination.
It’s also the site of the 2022 OPTech conference from NMHC.
ManageCasa will be exhibiting at the convention at the Wynn Casino Resort in Las Vegas. We’re a premier property management platform for multifamily, apartment and single rental home markets. If you’re in Vegas next week, please do drop by our booth to discuss property management.
Home Prices Dropped Yet Condo Prices Rose
According to Las Vegas Realtor, home prices across greater Las Vegas during September, dropped again for the 4th straight month.
Despite the decline of $47,000 in resale home price, since the peak in the summer, the September median price is still up 8.3% year over year. That was a decline of 2.63% vs August.
Sold Homes: 2,030 homes and 524 condos were sold in September. Sold homes rose 1.4% while sold condos fell 14.24%. Average price of condos sold rose 3.76% to $292,277.
The declining housing market has freed up 5,000 more homes for sale during September now at an inventory of 10,543 listings.
Redfin September Housing Report
Redfin’s September report showed homes being priced down at 21.8%.
Redfin states that more buyers in Los Angeles searched on their platform to move to Las Vegas. For the period of July to Sept 2022, 26% of Las Vegas homebuyers searched to move out of Las Vegas, while 74% looked to stay within the metropolitan area.
Most inbound buyers came from Los Angeles, Salt Lake City, San Jose, Seattle, Washington, San Diego and Chicago.
Overall, in the Nevada housing market, the median home prices sold at 10.3% higher year over year, and about level from August prices. Days on market has almost tripled from the spring season.
Cities in Nevada with the hottest price growth included Boulder City (+33%), Sunrise Manor (+16.6%), Enterprise (+15.7%) and Carson City (+12.1%). The number of homes listed for sale in Nevada in September is up 33% from 12 months ago yet declined slightly in the past month period. The supply of homes has grown quickly since July and has tripled in inventory since last March.
In September, 16% of home in the State sold below list price, and that is a 31% drop from last year.
Cities where people moving from include Sacramento, Miami, San Diego, Tampa, Cape Coral, Sarasota, and Dallas according to Refin’s most recent data.
Tax Advantages a Big Draw Too
What draws home buyers and renters to the Vegas and Nevada housing markets?
Income tax in Nevada is 43% below the national average. Taxation is a bigger issue than the media reports. States such as Tennessee, Texas and Florida are drawing hundreds of thousands of new residents (and businesses) due to the lure of low income tax. Migrants from Florida may be looking to retain low income taxes while enjoying the hot, dryer climate of the southwest region.
There is a migration trend for Americans moving to warm climate states with low taxes.
And Nevada’s state property tax is right in the middle of the pack nationally. That’s still much better than New York or California where many new residents are arriving from.
And this growth in migrating people and businesses, means more demand for rental properties and much higher rent prices. There are opportunities for new landlords and property management companies in Nevada.
Combine these factors with the lower costs of housing in many southern cities, and you would expect rising investment in rental properties. Las Vegas is rated as one of the best cities for property investment. However, as you can see, the average property price in Vegas is getting steep. Compared to California, Vegas is still a bargain. However, finding a residential property here is now easy task.
Check out our rental market report for comparisons to other US cities. The ante to invest in San Francisco, San Jose, San Diego, Miami, Denver, New York real estate makes Las Vegas a more sound possibility. And you may like the upside for positive cash flow and higher rental yields too.
Positives for Las Vegas Rental Sector
- rising employment and rising wages
- growing economy with tourism growing (39 million visitors in 2017)
- 2% population growth
- insufficient supply of single or multifamily housing
- insufficient rental housing
- lower property values
Las Vegas Rental Market Statistics
Zillow’s price history chart shows rents falling in Las Vegas, a sign the economy may be cooling.
In September, according to Zumper’s rental market report, rent prices in Las Vegas have risen 8% vs Sept of 2021.
However, rental prices for studio to 4 bedroom homes have fall slightly vs August 2022.
|City||1 Bedroom||2 Bedroom|
|Data courtesy of Zumper||Price Change M/M||Price Change YoY||Price Change M/M||Price Change YoY|
|Las Vegas, NV||$1,320||1.50%||12.80%||$1,560||-1.30%||9.90%|
- Las Vegas rental vacancy rates in Las Vegas? 3.2%, 6th lowest in the U.S.
- Population of Las Vegas? 632 Million in city, 2.2 million in Metro region.
- Percentage of renters in Las Vegas? 48%.
- Average per capita income: $26,000
- Las Vegas’s unemployment rate? 5.5%.
- Tourism volume: there were 39 million visitors in 2017
- North Las Vegas has the 5th highest increase in renter growth (38%)
As long as the US economy keeps pace through 2020, the outlook for the Las Vegas/Henderson markets is positive. As this graphic from FRED indicates, building permits haven’t been brisk and are just slowly rising.
Half of the jobs in Vegas come from tourism and gaming related activities. The city’s fame as a tourist destination ensures high demand for rental units.
Population growth is expected to increase 45,350 people, or 2.1% yearly and that will support the rental property market.
Apartment rents and property prices were increasing fast year over year, however they seem to have flattened out recently. For rental property investors, it begs the question of whether this is just a lull before property values and rents begin a faster ascent.
Rent Price Growth in Las Vegas
This graphic from ApartmentList says more than anything else about the need for rental apartments in Las Vegas than anything else. But for surviving landlords who suffered during the pandemic, it must be a relief, if they can in fact collect the rent.
It hasn’t been one of the top destinations for investment money and new housing construction, however it may now be Las Vegas’ turn to shine. The local economy is growing at a 3.5% to 3.9% clip according to one source.
Las Vegas is becoming more diversified and a 3.7% growth in gaming revenues should help to build a broader economic base. It is a city of renters and wages are climbing. Construction is on the rise too at 10% this year and 9% in 2019. That spells opportunity for investors and property managers.
According to a report in Las Vegas Review Journal, property investors also bought 105 local apartment complexes in 2017 for around $2.7 billion in total. That’s compared to 31 apartment complexes for $346 million in 2011.
Las Vegas Neighborhoods with Highest Rents
Summerlin North, and Desert Hills has the highest rents by far with an average $1400 and $1300 per month respectively. The Lakes, Angel Park, Lindell, Nex, Chatham Hills, Antelope, Astoria at Town Center, Aventine-Tramonti, Cascade and Centennial Heights have average monthly rents of about $1160.
Apartmentlist reports Las Vegas’ median 2-bedroom rent of $1,530 is above the national average of $1,306 and is moving toward California like levels. In comparison, US wide rents rose 17.1% over the past year compared to the 24.5% rise in Las Vegas.
See more on the California real estate market and whether rent prices will do go down in 2023.
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