March 10, 2023 - 2:16 pm
As a Realtor in Las Vegas since 2006, I have seen the extreme highs as well as the lows of our local real estate market — many of which are unique to our valley.
I started in Las Vegas with a new homebuilder in 2006 and spent most of the recession years as a sales executive for the iconic CityCenter Residential project.
In that time, I witnessed firsthand the decline of buying euphoria that started in late 2006 and early 2007 as our economy tumbled and local real estate prices fell by, in some cases, more than half.
No one expected the homebuying frenzy of 2021 and early 2022. But the combination of low interest rates, a shift toward working remotely, and (by most standards) affordable home prices made Las Vegas a destination of choice for many.
Just as quickly, we watched the real estate market come to a halt this past summer after a sudden rise of interest rates that sidelined a lot of potential buyers. We all held our collective breaths with flashbacks to the recession of 2008 and wondered if history would repeat itself in the coming year.
But what we’ve seen so far in 2023 took us by surprise again. Typically, real estate is slow at the start of the year and sales don’t pick up till the second quarter. This year, however, the sales activity this past January and February mirrors what you would see in the spring.
What happened was buyers who waited out the end of last year realized a big correction wasn’t going to take place with huge price drops and rushed back into the market to take advantage of what deals were there to be had.
Homebuilders made a quick pivot late last year and cut inventory home prices, while offering higher and more attractive incentive packages for buyers and increased commission structures for agents. In addition, homebuilders scaled back their building permits for 2023, meaning less homes would be built in the coming year.
It’s important to keep in mind Las Vegas holds a unique place in the overall U.S. real estate market with a tremendous amount of growth forecasted for the next one to five years. We will continue to see more people moving to our valley and still not enough housing inventory to support the influx of new residents. Currently, the Nevada Department of Motor Vehicles is registering an average of 6,000 new residents per month with just about half hailing from California.
What does this mean for 2023? While higher interest rates have definitely contributed to the cooling of our overheated marketplace, reduced builder inventory coupled with low resale home inventory will keep prices from falling further. In other words, we can expect more “normal”conditions for the Las Vegas real estate market. The reports of an impending market crash were greatly exaggerated. On the other hand, don’t expect long waiting lists for homebuilders or multiple offers above the asking price either.
Jennifer Graff is the founder of The New Home Experts Las Vegas and a co-host on Living Luxury Las Vegas. She is a Realtor at Coldwell Banker Premier Realty.