Las Vegas Housing Market
The Las Vegas real estate market is one of the hottest housing markets in the US.
The latest sales release shows prices of single detached homes are up 31% YoY, and up 3.61 to an astonishing 4737,949 in February (median price $485,000) and apartment prices rose by 1% to an average price of $304,610. Single family houses for rent in Las Vegas have dropped 17.44% in the last 12 months. Rent prices in Las Vegas have risen steeply too as stated below.
What’s driving this rising demand in Las Vegas? It’s a number of factors.
Business is improving and is expected to vastly improve as the Covid pandemic eases off. Travel has already increased thus injecting much needed sales revenue and tax revenue into the city.
Tax Advantages a Big Draw Too
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. 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
- Las Vegas rental vacancy rates in Las Vegas? 3.2%, 6th lowest in the U.S.
- Median residential rent in Las Vegas? $990/month.
- 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.
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