Las Vegas has been turned upside down by the coronavirus pandemic. Who would have ever thought every casino on the Strip would one day be forced to close, shutting off the valley’s main economic engine?
It was a laughable, too-scary-to-think-about scenario, until, of course, it happened — and as you might expect, the housing market is feeling the effects.
People are still buying homes, and builders are still building, but the pipeline of sales is shrinking fast amid the turmoil.
The volume of newly signed sales contracts has plunged this month. House-flipping companies that ventured to Las Vegas and other cities the past few years have stopped buying homes, and builders’ weekly sales-cancellation rate escalated through March as the valley rapidly shut down.
Gov. Steve Sisolak also banned real estate open houses, one of many emergency measures aimed at helping contain the virus’s spread, and froze eviction and foreclosure proceedings during the turmoil, preventing what could have been an avalanche of repos.
There are still many unknowns, including how long businesses will remain closed and how long it will take before people feel safe to travel again, let alone afford a vacation.
For now, job losses are grim, and home sales are tumbling.
A record 208,869 initial unemployment insurance claims were filed in Nevada last month — up 2,125 percent from March 2019, the Nevada Department of Employment, Training and Rehabilitation reported.
Meanwhile, buyers signed 2,130 sales contracts for previously owned homes April 1-16, down 47 percent from the same stretch last year, according to trade association Las Vegas Realtors.
Homebuilders also signed 197 sales contracts in Southern Nevada during the first two weeks of April — down 60 percent from the same period last year, Home Builders Research reported.
James Reza knows Las Vegas’ ups and downs. During the mid-2000s housing bubble, he said, people taped handwritten notes to his door offering to buy his house at a steep premium. Neighbors cashed in on the frenzy — but the market soon imploded, leaving the valley awash in foreclosures and underwater borrowers.
Reza and his wife, Staci Linklater, own Globe Salon, which has a location in the Arts District and another in the Summerlin area. The suburban outpost opened just over a year ago as the rebounding economy continued gaining steam. Both are now closed on Sisolak’s orders.
It was a bleak time in Las Vegas during the Great Recession, but Reza said people figured the bad times would end at some point. Today, nobody knows when the turmoil will stop or what the aftermath will look like.
“This one’s different,” he said.