More in Las Vegas now rent than own

Las Vegas is now a city of renters, though it’s far less expensive to buy a home here than to rent one.

From a peak of 64 percent in 2000, as measured by the U.S. census, Las Vegas Valley home ownership is now at 48 percent — and will continue to fall.

About half of the 100,000 existing homes sold in the region over the past two years have been all-cash transactions, an indication that they’re being bought by investors rather than primary residents, and that most will end up as rentals.

The decline in home ownership is a concern because it threatens the fabric of a community, said Kolleen Kelley, president of the Greater Las Vegas Association of Realtors.

Renters tend to be less meticulous about home and yard maintenance and not as committed to neighborhood preservation. And home ownership fosters stronger communities, creates social stability and contributes to a stronger economy, she said.

Jeremy Aguero, principal analyst with Las Vegas-based Applied Analysis, said Las Vegas isn’t like New York or Los Angeles, where home ownership is out of reach for moderate-income families.

“Those markets evolved to become more renter-oriented as a result of relatively high prices compared to incomes,” Aguero said. “Our sharp decline in home ownership is largely the result of a historic economic downturn and the resulting credit challenges for consumers. Relatively speaking, we have low prices relative to income. Consumers have a problem with credit, not cash flow, which suggests growth in the share of renters over the next five years.”

Of the 821,486 dwellings in the greater Las Vegas area, 394,082 are now owner-occupied, according to Applied Analysis. Those numbers include single-family homes, condos, townhomes and apartments.

For now, owners still outnumber renters in the single-family home market. The Clark County assessor’s office shows 289,962 single-family homes occupied by owners, compared with 190,782 rentals.

Aguero said he noticed a tipping point in the fourth quarter of 2011 when the majority of single-family homes sold in the region were being taxed at 8 percent — the rate for rentals or second homes — rather than the 3 percent maximum for owner-occupied homes. That’s an indication that even single-family residences are shifting to renters.

“Renters have gone up considerably in the market due to people losing their home from foreclosure and short sale, and they can’t get a loan again for a couple of years, and with so many investors coming in and buying, I would say we have probably escalated from the 2010 census numbers,” Kelley said.

Yet a combination of record-low home prices and lending costs have made buying a home relatively cheaper than renting in nearly 100 major U.S. metro areas, including 11th-ranked Las Vegas, according to Discovery Bay, Calif.-based Trulia.com, an online listing service.

Trulia calculates the price-to-rent ratio for 100 major U.S. metros by estimating the ratio of asking sales prices to asking rents, adjusting for attributes of the properties and their locations. A home with an asking sales price of $200,000 and monthly rent of $1,500 would produce $18,000 in annual rent, for a price-to-rent ratio of 11.

Anything under 15 indicates that buying a home is a better deal than renting for people planning to live in a home for at least five years. Even if the buyer plans to live in the home for less than five years, buying could be a better deal if the index is 10 or less, depending on moving and closing costs.

Las Vegas has a price-to-rent ratio of 7.0.

“There’s no reason not to own,” said Zolt Szorenyi, president of Lenders Clearing House Las Vegas, a company that sells foreclosed homes for banks. “It’s much cheaper than renting. The mortgage could be as much as half the rent.”

But cost isn’t the only factor.

Aimee Romero, a young public relations professional, said she wouldn’t feel comfortable buying a house right now. She rents in east Henderson because she doesn’t want to make any sort of financial commitment in such a volatile economy.

“A renter can give 30 days’ notice and pack up and drive to another area for a cheaper place, if you need to,” she said. “I’ve had a couple different jobs in the last five years, and I’ve lived in three different homes as a renter. You don’t want to hang your credit out there when you don’t know what your employment situation is going to be.”

A 1,400-square-foot home rents for about $1,000 a month, Szorenyi said. That same home purchased for $100,000 at
5.5 percent interest would carry a mortgage payment of about $650 a month.

That’s if the would-be buyer can get a mortgage.

“Even if buying is much more affordable, you have to save for a down payment and qualify for a mortgage, and that’s hard to do if you’ve lost your job in the recession,” said Jed Kelko, chief economist for Trulia.com. “The homeowner rate has fallen, but not as low as places like New York (39.7 percent), which has always been primarily a rental market. But there’s a clear shift from home ownership to rental in Las Vegas because of the foreclosure crisis.”

While credit conditions have loosened slightly, many potential homebuyers are struggling with credit requirements. Roughly 8 percent of contract cancellations are the result of a buyer not qualifying for a loan, according to a March report from Capital Economics analytics firm.

The average credit score required to obtain a mortgage loan is 700. It’s higher than scores required before the mortgage crisis, but constant with requirements a year ago.

While indicators in the Las Vegas region point to a continued decline in home ownership, there indications that a loosening of credit availability may help slow the trend, Capital Economics noted. Banks are lending amounts up to 3.5 times borrower earnings. That’s up from a low during the crisis of 3.2 times borrower earnings.

And Joel Sarmiento, senior vice president for Wells Fargo Home and Consumer Finance Group in Tucson, Ariz., who was in Las Vegas last week for a foreclosure workshop, said he has seen a reversal from investor purchases of Wells Fargo-owned homes around the West to more individual families buying.

ad-high_impact_4
Business
Mecum Car Auction in Las Vegas
The Mecum Auctions is held at the Las Vegas Convention Center. Bizuayehu Tesfaye/ Las Vegas Review-Journal @bizutesfaye
Construction underway for new Google Data Center
Henderson is slated to be home to a new Google data center in December 2020. The Governor’s Office of Economic Development approved $25.2 million in tax abatements for Design LLC, a wholly-owned subsidiary of Google. The company plans to build the data center on 64 acres of land on Warm Springs Road west of Boulder Highway.
Anthony Rufo talks about his new product, an in-home digital companion and monitor.
Anthony Rufo talks about his new product, HAPPIE Home technology, an in-home digital companion and monitor designed for unpaid family caregivers that gives personalized alerts, messages and reminders. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Holiday parades help bring shoppers to Downtown Summerlin
Sports Town USA floor manager Angela Gardonio talks about the work that goes into the Downtown Summerlin holiday parades and how they benefit her and other businesses there.
Final vote on CG Technology
Final commission vote on the $2 million settlement for CG Technology.
Happie Home Startup Establishing Headquarters In Las Vegas
Digital companion startup company Happie Home is establishing its headquarters in Las Vegas after receiving tax abatements from the Governor's Office of Economic Development on Nov. 15. (Bailey Schulz/Las Vegas Review-Journal)
A Facebook-branded space inside of Macy’s at the Fashion Show shopping center
A Facebook-branded space inside of Macy’s at the Fashion Show shopping center will showcase 13 small businesses in November and December and seven in January. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
T-Mobile uses ticketing data to plan for event
T-Mobile Executive Director of Arena Operations explains how ticket sales data and demographics help plan staffing, vendors, parking and operations for an event.
Costco opens its doors in southwest Henderson
Costco has opened its fifth Las Vegas-area location near the intersection of St. Rose Parkway and Amigo Street. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas strip mall and office park
The Krausz Cos. and WG Group bought a strip mall and an office park in Las Vegas for nearly $80 million total. They acquired a portion of Tropicana Beltway Center in the southwest valley for $59 million. They also acquired the Westbay office complex in the Las Vegas Medical District. The buyers are former owners of The Gramercy, a once-mothballed mixed-use project in the Las Vegas suburbs. They sold The Gramercy in phases for more than $100 million.
Mario Barth talks about the growth of the tattoo industry
Celebrity tattoo artist and business owner Mario Barth talks about the growth of the tattoo industry at The World of Tattoo industry trade show at Planet Hollywood in Las Vegas
$7.5M Las Vegas pot dispensary opens near Las Vegas Strip
Planet 13, which bills itself as one of the largest dispensaries in the world, opened to the public Thursday. It has entertainment including an interactive floor and floating orbs. (K.M. Cannon/Las Vegas Review-Journal)
Caesars CEO to step down next year
Caesars Entertainment Corp. CEO Mark Frissora will leave the casino company in February. Frissora has been CEO since July 2015. He was named CEO right after Caesars' operating company filed for Chapter 11 bankruptcy protection Caesars Entertainment emerged from bankruptcy protection in October 2017 Before Caesars, Frissora spent seven years as chairman and CEO of Naples, Fla.,-based Hertz He led the consolidation of the rental-car industry through Hertz‘s acquisition of the Dollar Thrifty Automotive Group.
Planet 13 in Las Vegas adds twist to marijuana dispensary look
Planet 13, which bills itself as one of the largest dispensaries in the world, opened to the public Thursday. The dispensary is located near the intersection of Desert Inn Road and Sammy Davis Jr. Drive, near Trump International, in Las Vegas. Planet 13 has plans in the future for a coffee shop, a tasting room for marijuana-infused beer and wine, a lounge for consuming marijuana on site if that is legalized and space for food.
Caesars Entertainment opening 2 resorts in Dubai
Cove Beach will open on Meraas’ Bluewaters Island in Dubai in November and Caesars Palace Bluewaters Dubai and The Residences at Caesars Palace Bluewaters Dubai will open in December. (Caesars Entertainment)
Bellagio, MGM Resorts International’s luxury hotel turns 20
The more than 3,000-room Bellagio hotel is situated on the site of the former Dunes Hotel. The Dunes was imploded in 1993, and construction of the Bellagio started in 1996. It cost $1.6 billion to build, making it the most expensive hotel in the world at the time. The Bellagio was former Wynn Resorts Ltd. Chairman and CEO Steve Wynn’s second major casino on the Strip after The Mirage. MGM Resorts International acquired the property from Steve Wynn in 2000. (Tara Mack/Las Vegas Review-Journal)
Facial recognition software at G2E – Todd Prince
Shing Tao, CEO of Las Vegas-based Remark Holdings, talks about his facial recognition product. (Todd Prince/Las Vegas Review-Journal)
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Bobby Baldwin to leave MGM
MGM Resorts International executive and professional poker player Bobby Baldwin is set to leave MGM.
Caesars has new armed emergency response teams
Caesars Entertainment Corp. has created armed emergency response teams. They are composed of former military and law enforcement officials. "These teams provide valuable additional security capabilities,” Caesars spokeswoman Jennifer Forkish said. Caesars is hiring Security Saturation Team supervisors, managers and officers, according to LinkedIn. The company did not say how many people it plans to hire for the units. (Las Vegas Review-Journal)
Las Vegas, airlines prepare for CES
CES in January is expected to attract more than 180,000 attendees. (Las Vegas Review-Journal)
AGS partners with Vegas Golden Knights
AGS is the nation’s second-largest manufacturer of Class II slot machines used primarily in tribal jurisdictions. It announced a marketing partnership with the Vegas Golden Knights NHL team. (Las Vegas Review-Journal)
Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like