weather icon Partly Cloudy

Las Vegas’ housing market facing risky times as valley shuts down

After starting the year with a burst of sales, Las Vegas’ housing market now faces risky terrain.

Sales could tumble as Southern Nevada shuts down to contain the new coronavirus, real estate pros said. In just a few weeks, the outbreak has shut off the valley’s main economic engine — tourism — with statewide casino closures and waves of canceled or postponed conventions, not to mention sweeping retail lockdowns and consumer hoarding of toilet paper, bottled water and other goods.

There are still plenty of unknowns, including the virus’ ultimate reach and how long businesses will remain closed to help contain the spread. But the public health crisis could leave a huge portion of Las Vegas jobless for a stretch of time, wiping out their ability to buy a house, or too rattled to wade into the market.

All told, Nevada “will likely lose” 5.3 percent of its private-sector jobs — more than 66,650 positions — because of the outbreak, according to the Economic Policy Institute.

Nevada’s possible job loss, as a share of the workforce, is the highest in the nation, the institute projected.

“Everybody’s scared,” said broker Tom Blanchard, president of trade association Las Vegas Realtors.

So far, there are no signs the housing market evaporated as the valley shut down the past few weeks. But the longer people go without a paycheck, the more it can dent the housing market.

“It’s pretty safe to say sales activity will go down for new homes,” said Las Vegas housing tracker Andrew Smith, president of Home Builders Research.

There’s also a chance that, given Southern Nevada’s heavy reliance on tourism, its housing market could take a worse beating than other cities.

“I think Las Vegas will get hit harder,” said Lawrence Yun, chief economist with the National Association of Realtors.

‘Huge negative impact’

Locally this month, newly signed sales contracts and new listings are down 27.5 percent and 7.7 percent, respectively, from year-ago levels. But sales cancellations also fell nearly 30 percent, showing that people under contract to buy aren’t bailing in rising numbers, according to Las Vegas Realtors data.

Still, Blanchard expects prices to drop. Las Vegas’ recently set record median price of $316,000 for a previously owned single-family house will be “short-lived at best,” he said.

Nationally, homebuyer interest has dropped sharply this month, a new report indicates.

The National Association of Realtors said 48 percent of members reported in a survey this week that buyer interest has decreased because of the outbreak. That’s triple the share of members who reported last week that buyer interest had fallen over the virus.

It would be “naive” to not expect sales to slow amid the turmoil, though a pullback in would-be sellers could “moderate” the price drops, said Cheryl Young, a senior economist at listing site Zillow.

Frank Nothaft, chief economist with housing tracker CoreLogic, said mortgage rates are “dirt cheap,” lowering buyers’ borrowing costs. But he also pointed to the “huge negative impact” the outbreak is having on the economy, and how rapidly the virus has changed the country.

“It’s just crazy,” he said.

‘Stronger than before’

Just a few weeks ago, Southern Nevada’s economy was on strong footing after years of clawing back from the depths of the Great Recession.

Locals could point to billions of dollars’ worth of real estate projects underway. Tourism numbers were strong, and home sales, after slumping in 2019, were surging.

On the resale market, buyers picked up about 2,470 single-family homes in February, up almost 26 percent from the same month last year, and around 2,280 in January, up 25 percent, according to Las Vegas Realtors, which reports data from its listing service.

Meanwhile, builders closed about 740 sales in January, up 21 percent from a year earlier, Home Builders Research reported.

Then the coronavirus hit, pushing the nation into a rapid shutdown.

Blanchard hopes Las Vegas recovers faster from this crisis than it did after the housing market crashed more than a decade ago.

Once the hotels reopen and tourists return, he said, “the lights will come back on, and Vegas will be even stronger than before.”

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.

Don't miss the big stories. Like us on Facebook.
Business Videos
Allegiant burning over $2M per day, many workers on leave with half pay - VIDEO
Allegiant Air’s parent is burning through at least $2 million in cash per day and hundreds of workers are taking two-month leave at half pay as the carrier grapples with the fallout from the coronavirus pandemic. (James Schaeffer / Las Vegas Review-Journal)
Small business owners talk about shutdown impact
Small business owners talk about shutdown impact. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Top stories Friday April 3, 2020
Rj Business reporters Bailey Schulz, Subrina Hudson and Eli Segall talk about the top trending stories at the Review-Journal
Caesars furloughing about 90% of US workers
The furloughs come amid the COVID-19 pandemic, which has prompted all U.S. commercial casinos to temporarily shut their doors.
Amazon blocks sale of N95 masks to public - VIDEO
Amazon established a new section of its website where U.S.-accredited hospitals or state or federal agencies can apply for supplies. N95 masks, surgical masks, facial shields, surgical gowns, surgical gloves and large-volume sanitizers are among the restricted items. (Las Vegas Review-Journal)
Cars line up for over 4 miles for food
Cars were lined up along Sahara Avenue from Palace Station to South Rainbow Boulevard for food distribution sponsored by Three Square and Central Church in Henderson.
US weekly jobless claims jump to 6.6 million - VIDEO
The U.S. Labor Department reported 6.6 million people filed for unemployment insurance in the past week. A reported 10 million people have filed over the past two weeks. (Las Vegas Review-Journal)
When will self-employed get unemployment money in Nevada? - VIDEO
President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act into law March 27. It allows states to expand unemployment insurance benefits, including to independent contractors, self-employed and gig workers. (Las Vegas Review-Journal)
Free Business Updates
For more information head to: https://www.reviewjournal.com/vegas-business-updates/
Walmart’s new safety measures at stores: Checking temperatures - VIDEO
In an effort to intensify safety measures in their stores, Walmart and Sam’s Club will check the temperatures of all employees as they arrive for work. (Kevin Cannon / Las Vegas Review-Journal)
Macy’s to furlough majority of 130,000 employees amid coronavirus closures - VIDEO
On March 30, Macy’s Inc. announced their decision to furlough a majority of their employees and instead move to the “absolute minimum workforce needed.” (Las Vegas Review-Journal
An empty Las Vegas Strip from the air - Drone Video
For the first time in forever, the famed Las Vegas Strip is closed for business amid the coronavirus pandemic. (Michael Quine/Las Vegas Review-Journal)
Nevada construction continues as coronavirus spreads
When Gov. Steve Sisolak ordered Nevada businesses closed, he let construction workers stay on the job, deeming homebuilding and other construction “essential” lines of work.
US weekly jobless claims soar to record-breaking 3.28M - VIDEO
The U.S. Department of Labor released the shattering numbers on Thursday. Jobless claims had been as low as 282,000 the previous week. The 3.28 million jobless claims for last week is more than double the 1.5 million new claims that analysts were expecting. (Las Vegas Review-Journal)
Worker at Allegiant Stadium tests positive for COVID-19
Construction of Allegiant Stadium is unlikely to affected by the coronavirus outbreak that is having an impact on just about every industry across the Las Vegas Valley. (Michael Quine/Las Vegas Review-Journal)
Casino companies burning through millions daily
RJ reporter Bailey Schulz talks about how much Las Vegas Casino companies are losing and how the Emergency bill could help if they run out of money or need help recouping what was lost.
Albertsons, Walmart, Amazon increase pay amid coronavirus impact - VIDEO
Grocery stores and other retailers have raised employee pay as they work to meet customer demand during the coronavirus pandemic. (James Schaeffer / Las Vegas Review-Journal)
Las Vegas police tells nonessential businesses to respect the shutdown - VIDEO
The Las Vegas Metropolitan Police Department reminds businesses in Clark County that all nonessential businesses are to be shut down as mandated by Nevada Gov. Steve Sisolak, due to the coronavirus crises. (Las Vegas Metropolitan Police Department)
Amazon Prime delays are now as long as a month - VIDEO
As of Sunday, many nonessential items ordered with Prime delivery are showing an April 21 delivery date. (Las Vegas Review-Journal)
Fed announces unprecedented actions to stabilize markets - VIDEO
The Federal Reserve announced several new measures on Monday. Among the announced programs is a further commitment of $300 billion "supporting the flow of credit" for Main Street businesses. (Las Vegas Review-Journal)
Lee’s Discount Liquor stores close on Sunday - VIDEO
Lee’s Discount Liquor stores across the Las Vegas Valley closed at 3 p.m. Sunday, March 22, the company announced on Twitter. (Las Vegas Review-Journal)
Local Businesses Message To Customers After Closing - Video
Local movie theaters and stores leave signs on their doors for customers as businesses close after being ordered to shut down.
Valley businesses react to mandatory order to shut down - VIDEO
All non-essential businesses in the Las Vegas Valley have to shut down. We spoke with store owners who would remain open for the benefit of the community and others who were still confused as to why they had to close. (James Schaeffer / Las Vegas Review-Journal)
Nevada casino closures impact 206K workers, AGA finds - VIDEO
About 206,000 direct casino employees in Nevada are without work after Gov. Steve Sisolak’s Tuesday mandate, according to the American Gaming Association. (James Schaeffer / Las Vegas Review-Journal)
More Las Vegas Valley grocery stores offer early hours for seniors - VIDEO
A growing list of Las Vegas Valley retailers are offering special shopping hours for seniors in light of the COVID-19 pandemic. (James Schaeffer / Las Vegas Review-Journal)
Nevada casinos closing for 30 days following state order - VIDEO
Gov. Steve Sisolak’s unprecedented order on nonessential Nevada businesses will shut down 440 licensed casinos. (James Schaeffer / Las Vegas Review-Journal)
Wynn CEO and Dr. Rebecca Katz go over coronavirus - Video
The Wynn CEO Matt Maddox and Dr. Rebecca Katz give a warning about the coronavirus in Las Vegas and around the world.
The Bellagio casino floor cleared as guests get ready to leave hotel - VIDEO
The Bellagio casino floor cleared as guests get ready to leave hotel (James Schaeffer / Las Vegas Review-Journal)
Tourists upset with MGM Resorts' lack of closure notice - VIDEO
Tourists like David and Emma Walker, who are visiting from Scotland, found out about MGM Resorts' property closures through Google, instead of the Luxor where they are currently staying. The Walkers are upset with how MGM has handled the situation by not making their customers aware of the closures first. (Cassie Soto/Las Vegas Review-Journal)
All Las Vegas MGM casinos, hotels to temporarily close - VIDEO
MGM Resorts International announced Sunday it is temporarily suspending operations at all Las Vegas properties “until further notice” effective Tuesday. (James Schaeffer / Las Vegas Review-Journal)
Sisolak orders halt to all evictions

Sisolak said his order applies to evictions that were already filed before the declaration, and prohibits new lockouts, evictions filings and notices to pay. It also applies to commercial buildings, to protect small businesses closed by Sisolak’s previous order.