Starter home prices at record highs in Las Vegas, report says
The total number of starter homes for sale in the Las Vegas Valley increased more than any other metro in the country year over year, according to a new study.
Redfin estimates the median sale price for a starter home in the U.S. is approximately $260,508 (a record high) with a midpriced home starting at around $370,000. Active listings of properties for sale deemed starter homes rose 42.9 percent year over year in the valley, the biggest jump from August of last year out of any metro in the country, beating out Miami (35.8 percent) and Seattle (33.7 percent).
The company defines a starter home as any property for sale that falls within the 5th to 35th percentile, on the lower end of the price range in a market, compared with midprice homes (35th to 65th percentile) and high-price homes (65th to 95th percentile).
The median price for a starter home in the valley sits at $344,737, a 4.5 percent increase year over year, and the number of starter homes sold in August of this year was up 1.8 percent from last year at the same time, according to the Redfin study.
But pending sales of starter homes in the valley were down 2.3 percent year-over-year across the same time frame while new listings were up 2.8 percent, according to Redfin. The median number of days a starter home sits on the market in Las Vegas is 47.
Las Vegas finds itself in the middle of an economic slowdown and housing crisis as tourism numbers are down across the board, biting into the state’s casino and gaming sectors. Home prices also remain close to record highs, but sales have dropped off since a high-water market set during the pandemic, and sales have yet to return to pre-pandemic norms.
A significant chunk of homeowners are locked into mortgage rates they got during the pandemic when rates bottomed out while potential homebuyers have yet to grow accustomed to higher rates. Freddie Mac has the current rate for a 30-year-fixed term at 6.3 percent, and mortgage rates in the U.S. have not gone below 5 percent since September 2022. They got as low as 2.6 in January 2021.
Daryl Fairweather, Redfin’s chief economist noted in another recent report that the valley has one of the fastest shifting markets — from a seller’s to buyer’s market — in the country.
“There are more sellers than buyers of homes in Las Vegas,” she said. “This means it takes longer for homes to sell, which means homes pile up on the market.”
Redfin also has Las Vegas with the fastest declining rental market in the country now as a wave of new multifamily projects come online coupled with a slowdown in the local economy depressing prices.
“Potential first-time homebuyers are finding better deals in the rental market, which means that it is especially hard to sell starter homes,” Fairweather said. “It’s more affordable in the short run to rent a one-bedroom apartment, than it is to pay for a mortgage on a one-bedroom condo, and that’s especially true when buyers can only afford small down payments and face higher interest costs.”
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.
