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‘If it has a pool, it’s a free-for-all’: Las Vegas housing market on fire

Updated April 13, 2021 - 7:35 am

When Kharisma Rodriguez thought about selling her house, she knew Las Vegas’ market was hot. But she didn’t realize the extent of the frenzy.

Within hours of her south valley home being put on the market in February, an offer came in, she recalled. The listing didn’t even have photos yet.

Despite the beat-up economy, Las Vegas’ housing market is in overdrive. Homes are selling rapidly, prices are setting record highs, and many buyers are paying cash.

Homebuilders, meanwhile, are regularly raising prices, putting buyers on waiting lists, taking bids for lots and in some cases even holding lotteries, according to multiple sources.

When Matthew Addison mentioned to a neighbor a few months ago that he was thinking of selling his northwest Las Vegas house, the neighbor replied that he knew someone looking for a place. The friend called the next day, Addison recalled, and soon reached a deal to buy the house.

“It’s kind of like the toilet paper rush with COVID. … Everyone’s stocking up on real estate,” said his wife, Kristyl Addison.

By all accounts, the boom is being fueled in large part by low borrowing costs, as well as a tight supply of homes for sale and a higher-than-usual volume of California buyers.

‘Free-for-all’

Scofield Realty owner Kirby Scofield said his brokerage firm has been coaching clients to act fast, telling them, “We don’t want window shopping.”

Broker Aldo Martinez, president of trade association Las Vegas Realtors, said he is always concerned to see rapid growth in the housing market, adding locals could get priced out as values keep climbing.

Under more normal conditions, it can take months to sell a house, but buyers are now grabbing homes within a few days of them being listed, and it’s not uncommon to see people pay above the asking price, according to Martinez.

“If it has a pool, it’s a free-for-all,” he noted.

Overall, the median sales price of previously owned single-family homes — the bulk of the market — was a record-high $363,000 last month, up nearly 14 percent from March 2020, Las Vegas Realtors reported.

Buyers picked up more than 3,700 single-family houses in March, up 35 percent from the same month last year, while only around 1,770 such homes were on the market without offers at the end of March, down nearly 69 percent compared with a year earlier, the association said.

With offers flooding in and a dwindling supply of homes, competition to buy a place is steep.

“It’s harder than it’s ever been,” said Randy Hatada, owner of Xpand Realty & Property Management.

Southern Nevada has long been a popular place for people to move to. But with offices closed and many people working from home amid the pandemic, out-of-state buyers seem to be more active than usual in Las Vegas, which offers bigger, less expensive houses than, say, Los Angeles or the Bay Area.

Rodriguez, the recent seller, said she went to see a home for sale in the Spring Valley area, and a line of people were waiting to get in. Some were peeking over the walls and peering through the windows.

“Every single car that was waiting had a California license plate on it,” she recalled.

‘It’s crazy’

Southern Nevada’s housing market was initially hit with a burst of turbulence when the coronavirus outbreak sparked sweeping business closures and other chaos last March.

The pipeline of home sales shrank rapidly after Nevada’s casinos closed and Las Vegas’ main financial engine, tourism, effectively shut off. Resorts and other businesses later reopened, though Las Vegas’ tourism-dependent economy has been among the hardest hit in the nation during the pandemic.

The housing market, however, regained its footing and embarked on its now-monthslong hot streak as people — at least those who could still afford to buy a place — jump at the chance for rock-bottom mortgage rates, letting them lock in lower monthly payments and stretch their budgets.

Bobbie Starr Dust, an agent with Berkshire Hathaway HomeServices Nevada Properties, said people are “falling all over themselves to buy a house.” Las Vegas is seeing a surge of cash buyers from California, many sellers are fielding multiple offers, and if a buyer wants to think about a house overnight, it will be gone, she said.

She recently listed a house in the northwest valley that received a cash offer, sight unseen, on day one.

“It’s crazy,” she said.

Realty One Group agent Michelle Hardy-Rodriguez said some buyers are making offers on multiple homes at the same time, something she doesn’t recommend, given what could happen if more than one seller says yes.

“As an agent, you shouldn’t let your clients do that,” she said. “But it’s happening.”

House lotteries

Amid the tight supply of resales, many buyers are trying to get a house from a builder, but that can be no easy task today.

According to several real estate pros, homebuilders around the valley are putting buyers on waiting lists. When builders release a new batch of home sites, buyers might be notified in the order they signed up, while some are asked to submit a bid, sources said.

Klif Andrews, Las Vegas division president for builder Tri Pointe Homes, said 20 percent to 25 percent of its sales are cash, up from the usual 10 percent to 20 percent, and most of its subdivisions in the valley have waiting lists.

His company started drawing up waiting lists for especially busy projects in January, around the same time as other builders, according to Andrews.

“You could just tell the demand was getting ahead of supply,” he said.

Across Southern Nevada, builders landed more than 11,000 net sales — newly signed sales contracts minus cancellations — last year, the most since 2007, according to Home Builders Research.

Multiple real estate sources also said they know of one builder in the valley holding lotteries, KB Home.

Scofield Realty agent Gustavo Lopez said he has participated in KB lotteries and has been able to secure home sites for his clients. He said that he calls the builder at least once a week to learn when the next drawing is held and that he arrives “super early” to submit his name on his clients’ behalf.

He has done lotteries in person and over Zoom, with a representative for KB pulling names out of a hat or a bowl.

In a statement to the Review-Journal, KB Home spokesman Craig LeMessurier cited the “extremely vibrant market for homes in the Las Vegas area” and said that at some of its communities where fewer lots remain available and “demand greatly exceeds supply, we sometimes hold drawings to select a homebuyer from among those interested, as we believe this is a fair and equitable way to proceed.”

“We take this selection approach on a case-by-case basis and only when the number of prospective buyers substantially exceeds our supply of available homes in that community,” he added.

‘Comstock Lode’

Overall, the housing frenzy has some similarities to Las Vegas’ doomed mid-2000s real estate bubble, which locals often say they don’t want repeated, given how badly it ended with sweeping foreclosures, plunging property values and abandoned construction sites.

Home prices are reaching record levels again, buyers can’t seem to get enough houses, and, as developer Wayne Laska, owner of StoryBook Homes, noted, lotteries were common during the bubble days.

Gail Payonk, director of sales and marketing at StoryBook, said that with builders allowing sealed bids for certain homes, it’s reminiscent of the pre-crash years.

“It kind of gives you the shivers a little bit,” she said.

There are also key differences between then and now. During the boom days, sloppy mortgage lending let practically anyone buy a house, if not several of them, and flippers and other investors swarmed for homes.

Today, lending requirements are much stricter than they were before the crash, and the sort of buyers who helped inflate the mid-2000s bubble don’t seem to be around.

Still, the market is showing no signs of cooling.

Matthew Addison, who sold his northwest valley house because he and his wife wanted a smaller home with an RV garage, said he figured it would take at least three to four months to find a buyer, never thinking they would land one without even trying.

It also took them months to reserve a lot with a builder for their new place because the developer was selling so fast.

“It’s the freaking Comstock Lode in real estate out here,” Matthew Addison said.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter. Review-Journal staff writer Subrina Hudson contributed to this report.

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