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Las Vegas Rapidly Grows
Buyers have flooded properties with offers, inventory is limited, and builders have raised prices and put buyers on waiting lists regularly. According to the latest data, Southern Nevada’s rapidly growing housing prices reached another all-time high in February 2022, as the previous year’s hot streak continued. The report from the Las Vegas Realtors shows that housing prices in the valley continue to rise, setting a new all-time high.
Las Vegas Median Home Prices
The median sales price of previously owned single-family homes increased to $450,000 last month, which is up 3.4% from January and up 26.8% from the prior year. Furthermore, 76.7 percent of homes sold last month had been on the market for 30 days or less, compared to roughly 66.7 percent of homes in February of last year.
Las Vegas Luxury Home Market
There were 114 houses sold for $1 million or more in the Luxury Market last month, down from 111 homes sold in January. February’s median sales price in the Luxury Market decreased to $1,312,500 and in January that number was $1,475,000. It was a decrease of $162,500 in the median sales price.
Investors believe that Southern Nevada’s housing prices are real and that the market is nearing a tipping point. The current price surge cannot be sustained. Las Vegas now ranks among the 10 most overvalued of the nation’s largest housing markets, with homes selling for 41.88 percent above their long-term pricing trend, according to a new analysis by professors at Florida Atlantic University and Florida International University.
Difficulties in Entering the Las Vegas Market
The only disadvantage is that buyers and investors buying now in the most overpriced markets are paying near-peak prices and risk being stuck for an extended period of time before realizing solid returns on their real estate investments. While first-time buyers face difficulties entering the market, seasoned owners are snapping up second homes.
As housing prices rise in double-digits, many homeowners are developing a fear of missing out, believing that there will never be a better time to sell. Due to a lack of existing homes, the Las Vegas housing market is expected to remain hot until the end of the year, based on these trends.
Las Vegas Census Date
According to Nevada Census data, there will be a 1.51% increase in population between 2020 and 2025, as well as a 1.46 percent increase in median income during the same period. Even though builders are bringing more homes to market, demand continues to outnumber supply. Builders are still not building at a rate that meets the needs of homebuyers. All these factors will lead to less supply and will help keep the single-family price levels strong.
Las Vegas Housing Supply
The housing supply in Southern Nevada is now at 0.7 months, well below what is considered necessary for a balanced real estate market. Months of supply is a good indicator of whether a particular real estate market is favoring buyers or sellers. Typically, a market that favors sellers has less than 6 months of supply, while more than 6 months of supply indicates an excess of homes for sale that favors buyers.
Las Vegas Rental Prices Increasing
The rental prices in Las Vegas are also increasing. Despite the high unemployment rate, rental vacancies have been trending downward to record-low rates. This shows a growing demand for rentals in the area and is a positive sign for real estate investors in the area. Las Vegas was among the fastest-growing metro area in December ranked #4, with the median rent increasing 29.8% year-over-year to 1,631, according to Realtor.com. The annual growth in the median rent price in 2021 was 18.9% for Las Vegas (ranking at #6).
The average rent for a 1-bedroom apartment in Las Vegas, NV is currently $1,250, according to Zumper. This is a 25% increase compared to the previous year. The average rent for a studio apartment in Las Vegas climbed by 3% in the last month to $1,084. The average rent for a 1-bedroom apartment remained flat, and the average rent for a 2-bedroom apartment decreased by -2% to $1,570.
Las Vegas Post Pandemic Housing Recovery
Although the pandemic is still causing disruptions for businesses (casinos, hotels, restaurants, etc), there is no downturn happening in the Southern Nevada resale housing market. The market has recovered and reached new heights this year. The Las Vegas housing market is among those cities that are showing the most signs of a positive recovery from the pandemic. Nevada’s unemployment rate was at its peak in April of last year (30.0%).
Las Vegas Jobs and Unemployment
According to the Department of Employment, Training and Rehabilitation’s (DETR) December 2021 economic report, Nevada’s seasonally adjusted unemployment rate was 6.4 percent in Dec 2021, decreasing from 6.9 percent in November 2021, and down from 8.2 percent in December 2020. As the local economy rebounds and the unemployment rate reduces further, it will have an indirect impact on the Las Vegas housing market.
The unemployment rate is still high but apparently, it has got no effect on the housing or rental demand. Low unemployment leads to higher future income which in turn leads to a higher demand for housing. Hence, as businesses in Las Vegas open to their full capacity, its housing market will continue to boom with the increasing demand.
What to Expect in Las Vegas Housing Market
The Las Vegas metro area home values are predicted to rise by 10-15% in the next twelve months. It has already heated up with strong demand and a shrinking supply driving home price peaks.
The houses are selling quicker than they were last year at this time despite the coronavirus pandemic’s devastating effect on the economy.
Southern Nevada Housing Market Trends 2022
Realtor.com’s data shows that the median list price of homes in Las Vegas, NV is $406,000, trending up 24.9% year-over-year. The median listing price per square foot is $237. The Paseos has a median listing price of $887,500, making it the most expensive neighborhood. Pioneer Park is the most affordable neighborhood, with a median listing price of $283,000.
The East Las Vegas housing market is VERY HOT. It ranks in the top 19% of neighborhoods in the area and the top 66% in the U.S, according to Realtor.com Market Hotness Index. Homes in East Las Vegas sell 34 days faster and are 28% less popular than homes in the surrounding area.
- The median list price of homes in East Las Vegas, NV is $283,000, trending up 29.2% year-over-year and the median listing price per square foot is $229.
- The median list price of homes in West Las Vegas, NV is $298,900, trending up 33.7% year-over-year. The median listing price per square foot is $212.
- The median list price of homes in North Las Vegas, NV is $395,000, trending up 29.1% year-over-year. The median listing price per square foot is $215.
- A full summary report published by Summerlincommunities.com (Data by LVR) on Las Vegas Real Estate Market Update shows that 2,514 single-family houses were sold in February, down 1.8% from January and down 9.1% from February 2021.
- The median sales price of previously owned single-family homes went from $435,000 in January to $450,000 in February.
- The price is up 3.4% from January and up 26.8% from the prior year.
- Prices last month were up $95,000 from February 2021.
- In January, there were a total of 2,950 new listings, which was up 1.7% from January, but down 2.2% from the prior year.
- There were also a total number of 1,741 single-family houses listed without offers at the end of February.
- The number of single-family listings is down 4.4% from January, but up 3.8% from the prior year.
- The housing supply in Southern Nevada remained at 0.7 months, which is up 14.3% from the prior year.
- Months’ supply refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace.
- 76.7% of the closings for the month of February were on the market for 30 days or less.
- In January this number was at 71.3% and in February 2021, 66.7% of the homes were on the market 30 days or less.
Las Vegas Real Estate Market Forecast 2022 – 2023
What are the Las Vegas real estate market predictions for 2022 to 2023? From 2017 to 2018, the home values in Las Vegas appreciated by nearly 30.4%. In two years, Las Vegas home values rose significantly due to the low availability of homes and very high demand. It was named as the number one real estate market in the USA for 2018 by Realtor.com based on the price and amount of existing homes, new home construction, and local and economic trends.
Las Vegas home values reported the highest year-over-year gains in home values, totaling a 13 percent increase, according to the S&P’s Corelogic Case-Shiller Index in 2018 (the leading measure of U.S. home prices). However, in 2019, Southern Nevada’s housing market overall cooled off with slower price growth and slumping sales. It looks almost flat throughout the year in the graph given below. Although overall price appreciation rates were slower in 2019 than in 2018 they greatly varied across different zip codes.
Southern Nevada prices were up 2.6 percent year-over-year in December 2020, compared with 3.8 percent nationwide, according to the S&P CoreLogic Case-Shiller index. The median prices for new homes increased by just 1 percent. Appreciation has been steady and strong in 2021, the Las Vegas metro home values have gone up nearly 28.5% over the last twelve months (Zillow Home Value Index). ZHVI is not the median price of homes that are sold in a month within a geographic region.
It is calculated by taking all estimated home values for a given region and month (Also called Zestimates), taking a median of those values, applying some adjustments to account for seasonality or errors in individual home estimates. It, therefore, represents the whole housing stock and not just the homes that list or sell in a given month. By this calculation, the current typical home value of homes in Las Vegas-Henderson-Paradise Metro is $405,542.
It indicates that 50 percent of all housing stock in the area is worth more than $405,542 and 50 percent is worthless (adjusting for seasonal fluctuations and only includes the middle price tier of homes). NeighborhoodScout.com’s data also shows that Las Vegas real estate appreciated by about 212.88% over the last ten years. Its annual appreciation rate has been averaging at 12.08%. This figure puts it in the top 10% nationally for real estate appreciation.
- During the latest twelve months, the Las Vegas appreciation rate was about 17.15%,
- In the latest quarter, the appreciation rate was 6.94%,
- The quarterly rate equates to an annual appreciation rate of 30.77%.
- This figure corroborates Zillow’s positive forecast, which also predicts that home prices in this Las Vegas area will increase in the next twelve months.
Short-term real estate investors can make a good fortune if they buy now. The market is riding a hot streak of record prices and rising sales despite the bleak economy. Housing prices have record levels last year despite the pandemic’s devastating effect on the economy and this trend will follow in 2022.
Here is Zillow’s home price forecast for Nevada, Clark County, Las Vegas, Henderson, and Las Vegas Metropolitan Area. The forecast is until Jan 2023 and you can expect to see very strong home price gains in this region.
- Las Vegas-Henderson-Paradise Metro home values have gone up 28.5% over the past year and the latest forecast is that they will rise 24.7% in the next year.
- Las Vegas City home values have gone up 28.6% over the past year (current value = $399,108) and will continue to rise, albeit at a slower rate.
- Henderson home values have gone up 27.9% (current value = $469,875) over the past year and will continue to rise, albeit at a slower rate.
- Clark County home values have gone up 28.5% (current value = $405,542) over the past year. It is expected to continue to rise, although more slowly than before.
- Paradise Valley home values have gone up 5.8% (current value = $226,281) over the past year and will continue to rise, albeit at a slower rate.
- The typical value of homes in Nevada (statewide) is $423,999, up 28.1% over the past year.
It’s is a Great Time to Sell for Sellers
Motivated buyers are looking for houses for sale, and you are not competing with as many property owners. Many sellers have chosen to back out amid this pandemic. As more and more buyers enter the market the prices are going to increase due to tight supply.
Mortgage Rates are the Lowest Ever for Buyers
Take advantage of scooping up more expensive houses by locking in lower monthly payments. Lower rates can help buyers stretch their budgets for higher-end deals that otherwise are taken away by seasoned investors in the bidding wars. Overall, it is a win-win scenario for both sellers and buyers and a great time to enter the market.
Source: Norada Real Estate Investments & Las Vegas Realtors