Las Vegas Valley real estate market is ‘historically volatile’
The Las Vegas Valley’s residential real estate market has been “historically volatile” as Redfin reports the local scene is cooling faster than anywhere else in the country right now.
The Redfin report noted that the valley is a “historically volatile housing market” given “it’s housing market crashed during the 2008 financial crisis, and boomed from an influx of Californians moving in during the pandemic. Now, with tourism suffering and migration into Las Vegas dropping off, the housing market is on a downward trend.”
The report also noted that new short-term rental restrictions have led many rental property owners to put their homes on the market.
Chen Zhao, the head of economic research for Redfin, said the valley is feeling the effects of affordability pressures and elevated mortgage rates “more acutely” than most other metro regions partially because the local economy is so heavily dependent on tourism.
“The resulting pileup of supply paired with slow demand is a tough pill for sellers to swallow, but it’s good news for buyers. With so many homes on the market—and so many sitting for so long—buyers can take their time choosing from a plethora of options, and they may be able to negotiate prices down. And now that mortgage rates have dropped near their lowest level in 10 months, Las Vegas buyers may be able to snag a meaningfully lower monthly payment.”
Active listings in the valley jumped 31 percent in July compared to the same month last year, the largest increase of any metro region in the country, according to Redfin. Pending home sales have subsequently dropped 8.6 percent over this same time frame, while closed sales fell 8.5 percent, which Redfin said signals that there is serious hesitation from buyers in the local market.
Las Vegas finds itself in the middle of a housing crisis caused by a number of factors including a lack of land to develop, increased construction and labor costs for homebuilders and elevated mortgage rates which have sidelined many potential homebuyers and homesellers. Home prices currently sit at record highs in the valley however other cities across the country are starting to see drops in their price points for homes.
Economic uncertainty is also abound due to U.S. President Donald Trump’s whipsaw tariff strategy to bring other countries to the bargaining table, which has cooled investment in a number of sectors including the housing industry along with a slowdown in multifamily builds across the country, which Las Vegas is acutely impacted by due to a lack of sufficient affordable rental units.
Cherra Bergman, a Realtor based in Las Vegas who works for Redfin, said she has seen an uptick in buyers over the last several weeks as mortgage rates have declined.
“Buyers who put their search on hold over the last year are resurfacing,” she said. “Savvy buyers know there are a lot of homes on the market and that they can get a better deal now than two or three years ago. Because some sellers are giving concessions and reducing prices, some buyers are able to get a lower monthly payment than they would have when mortgage rates were higher.”
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.