As tourism slumps in Las Vegas, real estate shows similar signs of downturn

As tourism slumps in Las Vegas, the residential and commercial real estate markets are showing similarly worrisome signs, according to analysts and stakeholders.

The median price for a house in Southern Nevada currently sits at $485,000,a record high set at the start of 2025, but home sales are sluggish this year compared to pre-pandemic norms. Home sales were down 5.8 percent in July compared to the same month last year, according to trade association Las Vegas Realtors, which pulls data from its resale-heavy listing service.

Home prices have now started to drop in multiple metros across the country, including Austin and Houston, Texas; Miami; and Oakland, California, however valley prices remain stubbornly high for a number of reasons: a lack of land to develop, a building slowdown, increased construction and labor costs, high mortgage rates and a continuing migration of residents from California, experts say.

Las Vegas homebuilders are selling fewer houses to would-be buyers. Through the first half of this year, builders sales were down 24 percent from the same stretch last year, according to Home Builders Research data.

Office construction stalls

Construction of commercial real estate as well as projects in the pipeline are slowing in the Las Vegas Valley, data shows.

Office space construction stalled in the second quarter of this year, according to a new report from real estate brokerage CBRE Group Inc., as no new projects broke ground and very few are planned for the rest of the year. But a wave of multifamily projects have been coming online last year and into this year as part of a pandemic-era financing and building boom, which has put downwards pressure on rental rates across the valley.

John Boyd Jr., principal at the Boyd Company, a national corporate site selector, said he’s been coming to the valley for decades and Las Vegas has entered a “reckoning phase” as its tourism numbers start to lag, and it needs to rethink its overall economic strategy moving forward.

“There’s been been a number of times that Las Vegas has reinvented and re-imagined itself, there’s been successful target industry initiatives, health care and medical tourism, you think about the redevelopment of downtown Las Vegas and the emergence of experience-based retail, emerging multimedia technologies,” he said. “And I think it also puts a real exclamation point on how economically valuable professional sports franchises are as year-round anchors.”

Through the first six months of 2025, visitor volume to Las Vegas is down 7.3 percent year over year, according to the Las Vegas Convention and Visitors Authority.

‘Bullish’ on residential real estate

Robert Little, a real estate agent with Re/Max, said he remains “bullish” on the valley’s residential real estate market and doesn’t believe the underlying statistics point to a larger problem down the road for Las Vegas’ overall economy.

“I think it’s a short-lived little blip and nothing to be worried about,” he said, noting the valley’s expanding population as a key driver for growth and economic dynamism.

Clark County is expected to break 3 million residents around 2045, however population growth has been slowing consistently since 2015 when the county added 57,566 people to the population.

Little said the biggest issue for the housing market is elevated mortgage rates, at roughly 6.5 percent for a 30-year fixed-term mortgage. Rates have not dipped below 6 percent since September 2022, and Little said he thinks they will drop soon because of economic pressures. Lower mortgage rates will spark more sales, he said.

“Yes, rates are high, and there is a lot of people who don’t want to sell because they are locked into a low rate or they are coming from other markets like California,” he said. “And they can’t sell their house which is why inventory is a little bit higher than it has been before.”

The valley has been consistently leading the country in the increase of homes on the market for sale over the past few months. In July alone, single-family home listings were up 54.2 percent from a year while condo and townhome listings were up 77 percent.

Little said the valley is returning to a more “balanced market” and getting off the economic roller coaster ride that was the pandemic.

“We still have 3.6 months of inventory for single-family homes and that’s considered a seller’s market still,” he said.

When asked about a possible recession, Nicholas Irwin, research director for UNLV’s Lied Center for Real Estate, said he will be keeping a close eye on mortgage rates. If it drops below 6 percent and doesn’t cause sales to jump, he said there could be larger issues at play with the overall U.S. economy.

“If that happens and the market takes off, and then maybe Las Vegas is just suffering a downswing and everything is going to be OK,” he said. “But if those mortgage rates go down and there’s not a lot of activity maybe that is a sign there is some significant underlying economic issues at play.”

Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.