What in the world is going on with Vegas house prices?

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What in the world in going on with Las Vegas housing? Why are local housing prices up 20% in less than 4 months? To better understand current investment housing trends in Las Vegas you need to understand the simple economics of housing supply being kept artificially low by government policies and the pandemic.

I’m personally invested in detached single family residential real estate in Las Vegas along with being a property manager for Summerlin, Henderson and hand selected zip codes of Las Vegas. A few things that are impacting supply and demand and the recent 20% spike in housing prices here:

• 1) investors swarmed our market from 2010-2017. Almost half of detached single family homes are owned by cash investors and these rentals houses are occupied by Tenants.
• 2) There is a Governor mandated eviction moratorium through May 31st, 2021. Landlords cannot serve evictions notices to get Tenants out which is limiting our housing supply. This has been extended multiple times and there are concerns it may be extended again
• 3) The governor has also limited landlords from serving 30 day “no cause” notices to vacate. Landlords are having a hard time gaining control of their properties which is limiting supply
• 4) Some homeowner’s are terrified of COVID and would have wanted to sell but don’t want strangers entering their house (limiting supply)
• 5) As a real estate broker and property manager many houses are being sold and rented to people moving here from out of state for remote work or other reasons. We have a tremendous increase in demand
• 6)Shannon Chambers, president of Home Means Nevada, a state-affiliated nonprofit organization that assists homeowners, estimated that more than 8 percent of mortgage loans in the state are in forbearance, which she said is upwards of 100,000 loans.
• 9) CA residents are coming to Nevada for the low cost living, no state income tax and other reasons…this is pushing up demand. 

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@Joe Splitrock our local economy lost 114,200 jobs during the pandemic that have not returned. Many people are moving here because they are working remotely (tenants included). Based on stats I heard yesterday there are 130 new Nevada residents every day which equates to 5.4 new Nevada residents per hour! This creates incredible demand for housing. 44% of these people are coming from California and the next highest states are: 4.4% from Florida, 4% from Arizona, 4% from Texas and 3.8% from Washington. 

I believe supply will increase in the next 6-9 months but I have no idea if the demand will remain as strong as it is today. If the demand remains high prices should also remain steady. There are so many unknowns given the pandemic it's difficult for anyone to predict housing prices in the future.

To your point, many investors who purchased in the last down-turn (and have access to their homes) are selling given our current market conditions. When I check listings on our local MLS many sellers are LLCs. The cycle continues...primary Buyers purchasing at high prices with financing and minimal contingencies and investors selling high.

My personal opinion is that it will take 3-5 years for our market to normalize. Given historical data our market tends to overshoot the highs and go lower than the national average during economic downturns. On a side note, as a residential property manager of detached SFRs in A&B neighborhoods, I have real world knowledge that some tenants who moved here from California in 2020 already know they are being called back to the office Fall of 2022. Over the next 3-5 years I believe corporate America will realize employees are more productive in a cubicle than they are working from home.

Purchasing investment real estate has so many personal factors it's impossible for an agent to offer timing advice. I'm helping a client right now that is purchasing a Summerlin Investment Property ($30k over list) just because he has nothing better to do with the money. He doesn't want to put the money to work in the stock market because his personal belief is the stock market is overvalued.

My passion for residential real estate started as a child. My godfather was my mentor and I purchased my first investment property in 2001. I still remember I secured a 15 year mortgage at 5% interest. I bought a 1 bedroom condo in Scottsdale Arizona for $93,000. In 2005 it was worth over $185k and then by 2009 it was worth about $55k. Today it's valued at $212k. Oh the cycles of real estate...I love it though!