Las Vegas Valley home prices could start dropping: report

Las Vegas Valley home prices could begin to drop in the second half of the year, according to a new Redfin report.

The local real estate market is being hit by a number of factors all at once, said Asad Khan, a senior economist at Redfin.

Pending sales have fallen in May compared to the same month last year, marking a “weak homebuying season” for the area, according to Redfin. The Las Vegas Valley is third in the country when it comes to a drop in pending sales (down 17.7 percent), which is just behind Fort Lauderdale (18.6 percent) and San Jose (18.3 percent), the Redfin report stated.

“At the same time, Las Vegas registered the highest active listings growth in May among the top 50 metro areas in the U.S,” Khan said. “The reason for low sales has been particularly weak demand in the Las Vegas region. High mortgage rates and high prices are keeping a lid on demand, even though the stock of homes for sale is growing. Most sellers in the Las Vegas metro area have significant equity in their homes created during the run-up in prices, so few sellers are feeling the pressure to sell quickly with prices still rising.”

The monthly report for May from the Las Vegas Realtors, who pull their stats from the Multiple Listings Service showed that Southern Nevada home prices held steady last month but were still close to record highs set earlier this year as sales continued to lag.

The median price for a single-family house sold in the region in May was $480,000, the same as April and down from the all-time high of $485,000 set at the start of the year, according to LVR. This is also a 1.5 percent increase from May 2024.

Khan said prices remain elevated however they are seeing a “steady” deceleration as demand remains low.

“Given that mortgage rates are likely to remain elevated around 7 percent through the end of the year, we anticipate price growth will continue to slow,” he said. “For sellers, this means the latter half of 2025 may be a tougher market as demand slows further and more inventory piles up, leading to more price drops. We’ve already called Las Vegas a buyer’s market, and buyers will only have more negotiating power going forward.”

Nationally, new listings of homes across the country are up 2.5 percent from this time last year, which is the smallest increase in the past five months. New listings are falling in 20 of the 50 biggest metro areas in the country. The report outlined the current conditions putting pressure on the market across the country.

“There are still hundreds of thousands more home sellers than buyers nationwide. But some would-be sellers are sitting on the sidelines as the market tilts more and more in buyers’ favor in much of the country,” read the report. “Pending home sales fell 2.3 percent year over year during the four weeks ending June 22, the biggest decline in three months. There are two key reasons why home sales are slow. One, housing costs are still soaring, with home-sale prices up 1.6 percent year over year to a record high and mortgage rates sitting near 7 percent. Two, many would-be buyers are holding off due to widespread economic uncertainty and recession jitters.”

Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.