Any sign of stabilizing in Las Vegas market?
Hi all,
I recently moved to Las Vegas. Currently in market for a primary residence but also looking to buy SFH rentals in the coming months and finally start my real estate investing journey here. Do any of you local experts see signs of the market cooling down here? I'm also in the process of selling my CA home and according to my realtor, the Bay Area market is definitely seeing some slowdown.
@Ju Feng, if we fall in to a severe recession, it could get real ugly for Las Vegas. Las Vegas is heavily dependent on the hospitality and entertainment industry which is one of the first things to be impacted by recession. I would be careful.
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You’re the reason vegas housing prices aren’t slowing down. :-)
People from California think we’re giving homes away.
The strip, all of our entertainment and casinos were completely shutdown for 18 months and housing skyrocketed.
In the history of the city prices have fallen more than 5% once. We don’t have any vast swaths of land to build for everyone coming here. As people flee the taxes and government of New York and California we’re getting swamped. We went from being 1/3rd or 1/4th the price of California to almost half.
The one thing that may drive me out if I live long enough I we’re going to become California east, or little Cali, or whatever derisive name they can think of. Good luck with your search and feel free to reach out if you have questions, but the days of abundant suitable properties is gone. As prices skyrocket rent only rises 10-20% or year. Eventually the numbers don’t work for cashflow and it becomes an income and appreciation play.
Quote from @Bill Brandt:
You’re the reason vegas housing prices aren’t slowing down. :-)
People from California think we’re giving homes away.
The strip, all of our entertainment and casinos were completely shutdown for 18 months and housing skyrocketed.
In the history of the city prices have fallen more than 5% once. We don’t have any vast swaths of land to build for everyone coming here. As people flee the taxes and government of New York and California we’re getting swamped. We went from being 1/3rd or 1/4th the price of California to almost half.
The one thing that may drive me out if I live long enough I we’re going to become California east, or little Cali, or whatever derisive name they can think of. Good luck with your search and feel free to reach out if you have questions, but the days of abundant suitable properties is gone. As prices skyrocket rent only rises 10-20% or year. Eventually the numbers don’t work for cashflow and it becomes an income and appreciation play.
Seeing more and more of that with every property I look at. The cashflow isn't there a lot of the time, even with prices dropping slightly, but the properties still moving in this town.
Here's a real world example of how our market is currently in a correction and why artificial intelligence in real estate can only get you so far.
In Q2 iBuyers overbid in Las Vegas. Open Door purchased a house in my former neighborhood (not my house) May 9th, 2022 for $742,100. List price is now $102,000 under their purchase price!!! I'm tracking this one for fun and will post final sales price once it sells (still on market).
Open Door has lowered their list price as follows:
$640,000 DOWN $682,000 -> $640,000 08/04/2022
$682,000 DOWN $715,000 -> $682,000 07/21/2022
$715,000 DOWN $737,000 -> $715,000 07/07/2022
$737,000 DOWN $754,000 -> $737,000 06/23/2022
$754,000 DOWN $790,000 -> $754,000 06/10/2022
$790,000 NEW -> A 05/26/2022
The entry level is in a downward trajectory as institutional investors have stopped purchasing. I recently listed a house for sale in a neighborhood previously swarmed by institutional investors. We priced the house slightly under recent comps as I'm aware prices are on a downward trend. Even being priced lower than recent sale comps the institutional investors said we are greater than $50,000 apart so they are not interested in writing an offer. I witnessed institutional investors first hand bidding up prices Q1 of 2021 and now I'm witnessing them first hand impacting prices Q3 of 2022.
Institutional investors seem to be waiting for the market to correct to a more realistic price point (not crash) and then they will start purchasing again when the prices are $50,000-75,000 lower than they are now (the house I'm referencing is listed at $460,000 and I think an institutional investor would be willing to pay about $380k).
This has been such a fun market to be apart of the past 2 years and will be another one that will be reflected upon for many years to come. It's funny...back in Q1 of 2021 I was trying to make sense of our changing market and what was causing it. Most opinions came down to basic supply/demand but we now know there were other unique factors that played a role. Now it all makes sense to me: iBuyers, institutional investors and pandemic migration created a 24 month perfect storm to inflate real estate values in sunbelt regions like Las Vegas.
Cheers to my fellow investors who love this as much as I do.
-Heidi
Is our market correcting or crashing? It seems the more appropriate term is that is came to a screeching halt. This has been a wild ride the last 24 months. Stats from the last 30 days for Las Vegas detached single family homes:
Your search returned 1881 Listings.
Property Type is 'Residential'
Status is 'Sold'
Status Contractual Search Date is 08/20/2022 to 07/21/2022
Property Sub Type is 'Single Family Residential'
Ordered by Status, Area, Current Price
Found 1881 results in 0.20 seconds
Your search returned 8382 Listings.
Property Type is 'Residential'
Status is one of 'Active', 'Coming Soon'
Property Sub Type is 'Single Family Residential'
Found 8382 results in 0.20 seconds
The crazy part is the rental market is slowing at the exact. same. time.
@Account Closed
Thanks for the detailed market report and honest opinion. When I look for a realtor, I always trust those who provide honest opinion about negativity in their market.
I visited Vegas in November 2020 and checked out a few properties. The realtor was managing thousands of SFR in Vegas, where majority of the owners were from LA or SF. He provided me with free nights stay in one of their vacant properties.
Las Vegas will be severely damaged in a recession, much more so than SF bay area, IMHO. SF bay area is already in a severe correction range, with price dropping about 15-20% compared to the peak archived in 1q 2022. It will be surprising if Vegas can somehow escape this correction.
All of my investment properties are in Bay Area, but I am actively observing Las Vegas for potential opportunities, for larger apartments, strip malls, industrial warehouses, etc.
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Yeah. I hear that. It does look the SF bay is being severely more damaged without a recession. Las Vegas prices have only fallen more than 5% once since it was founded so it’s a lot more stable than the SF Bay Area but the numbers are much smaller. That being said. If you couldn’t find anything you liked 18 months ago when prices were 20-30% cheaper you’re not going to find anything you like here in the future. The chance of prices falling 25% back to 2020 prices isn’t zero, but it’s darn near zero.
It’s too bad you didn’t sell the SF bay properties and buy in Vegas when you had the chance. Catch a 20% upswing instead of a 20% downswing. But if you own properties there I’m sure you’re doing just fine. :-). We’re the Walmart to your Macys, for better or worse.
Last two years, LV and SF bay both have significant appreciation, where bay area showed a much higher appreciation than LV. Selling in bay area to buy in LV 2 years ago is a really smart idea.
@David Song
Many properties in Las Vegas have already dropped 20% from the peak in May 2022, it took only 3 months for a 20% off, fast-pace dropping like a stock market, not sure if further price drop is coming or not.
Similar here in Bay Area. This recession started abruptly and price dropped very quickly, unlike the last big recession in 2008-2009. Whether this recession will last a few years like the 2009 recession is up to debate, which I do not believe will be. This might be the real buying opportunity that I have been waiting for for years.
@David Song I'm just super fascinated by the impact a once in a lifetime pandemic had on the Vegas real estate market (and other markets like yours). I started investing in Vegas back in 2011. I bought my former primary residence as a HAP short sale for $156k and no one wanted the home. We were the only offer. The house value shot up to over $500k during the pandemic. My current residence which is a luxury home doubled in value during the pandemic. I was watching all this happen and thinking....this is not normal. What a fun time to be in real estate to watch the market shift like it has been.-Heidi
Quote from @Account Closed:I usually buy 1-2 properties per year in Las Vegas, in cash, in areas that are in demand like Summerlin or Boca Park.
@David Song I'm just super fascinated by the impact a once in a lifetime pandemic had on the Vegas real estate market (and other markets like yours). I started investing in Vegas back in 2011. I bought my former primary residence as a HAP short sale for $156k and no one wanted the home. We were the only offer. The house value shot up to over $500k during the pandemic. My current residence which is a luxury home doubled in value during the pandemic. I was watching all this happen and thinking....this is not normal. What a fun time to be in real estate to watch the market shift like it has been.-Heidi
I'm waiting for the prices to get a bit lower, maybe I'll make a run at something in early 2023. I have 12 at the moment, free and clear.
One area I'm watching, where I own four properties already, prices went from an average of 270-280 at the start of the year to 235-245 at the moment - and some are still sitting on the market 30-60 days out. At the start of the year, people were outbidding me with ridiculous sums like it was some Ebay war - and I would just roll my eyes and walk away.