Status of the Las Vegas Real Estate Market in 2017
While Las Vegas home prices are rising at one of the fastest rates nationwide, they still have a long way to go before reaching the stratospheric heights of the pre-recession peak. A report by Nationwide Mutual Insurance Co reveals that home prices in Las Vegas still sit at 27.7% below their pre-2008 peak. This can be explained by the fact that Las Vegas was among those hardest hit by the Subprime mortgage crisis, with property values plunging in its wake and foreclosures rampant. However, recovery has been swift – so swift in fact that many feared another bubble bursting when foreclosed homes were bought up and converted to rentals as the economy started to improve. However, the climbing prices have cooled somewhat, easing worries and promising more stability as the market improves. Single-family homes have been driving growth, as employment in the city remains stable.
Demographics in Las Vegas
The millennial market is starting to make a big impact on Las Vegas, as the share of first-time buyers entering the market climbed up to 35%. As a result, Las Vegas developers, who typically aimed for the luxury market in the pre-recession days, have begun building more modest, starter homes, appropriate to this growing demographic, many of whom are starting families. Baby boomers are also making a big impact. Many are selling their homes and buying condos, with the area a retirement hot spot retirees are flocking to, with many age-targeted retirement communities springing up in suburban areas on the outskirts of the city with excellent amenities.
Average prices of housing in the Las Vegas Real Estate Market
Local home prices are up 9% year-to-year, good enough for S&P’s CoreLogic Case-Shiller national price index to rank them the second fastest growing market among the metro areas surveyed. Previously owned single-family homes are selling for a median price of $261,150, almost double what it was during the depths of the recession, although a long way from the pre-2008 peak of $315,000. New single-family homes are retailing for a median of $356,400.
Reasons for growth and outlook for 2018
The outlook for Las Vegas’s real estate market in the year-ahead is sunny, with the economy expected to continue its growth, jumping up 8%, above the national average. The lower home prices are what is driving the shift, allowing it to become a buyers’ market, which should make it a prime destination, as more people move to the city for work and buy homes. In fact, many believe the Vegas economy is on the verge of a boom, with unsold housing inventory plummeting by 30% in 2017. One industry primed for a major uptick is construction as more skilled workers are needed to build in-demand housing, plus the already robust tourism industry shows no sign of slowing down – good news for employment and good news for the real estate market. Demand is expected to remain high for the year ahead, with inventory still trying to catch up.