May 14, 2021 - 2:18 pm
Updated May 17, 2021 - 12:33 pm
Ultra-luxury sales are boosting the cumulative value of home sales in the Las Vegas Valley, and it won’t be surprising if Las Vegas sets an all-time record in 2021 for the highest price ever paid for a home.
Las Vegas Realtors sold $1.68 billion worth of $1 million-plus homes during 2020, a 60 percent increase over 2019, and 2021 shows no signs of slowing as the leading brokerages vie for the No. 1 spot to topple perennial luxury category champion Berkshire Hathaway HomeServices.
The year is already off to a strong start during the first four months of 2021 with 524 luxury sales of $1 million and higher between January and April, according to the Multiple Listing Service of the Las Vegas Realtors association and tracked by Forrest Barbee, corporate broker with Berkshire Hathaway HomeServices. With the winding down of the COVID-19 pandemic, the year is on pace to blow away the 856 luxury home sales during 2020, according to research firm BrokerMetrics, which tracks Realtor transactions on the MLS.
Barbee said there were 162 sales of $1 million and higher in April alone, the second-highest month in history behind the 170 in March. There are 257 pending luxury sales on the MLS, he said.
The luxury market has been on fire since the economy reopened from the COVID-19 shutdown as people relocate from California and other states and local residents look to upgrade.
The value of the sales is outpacing the volume of sales, as not only prices appreciate but as more buyers than ever look to purchase uber-luxury homes of $4 million and above.
Rob Jensen of the Rob Jensen Group said there were 53 sales of $4 million and above in the Las Vegas Valley alone in 2020, more than double the 26 in 2019. Through the first four months of 2021, there were 43 sales of $4 million and above compared with seven from January through April 2020.
The 856 luxury sales on the MLS in 2020 blew away the 587 worth $1.05 billion in 2019 as tracked by BrokerMetrics. That’s a 46 percent increase. There were 493 luxury transactions in 2018 worth $894.2 million, the firm reported.
Firms will have to go a long way to surpass Berkshire Hathaway as the No. 1 luxury brokerage in the marketplace, according to BrokerMetrics.
Berkshire Hathaway handled 285 luxury transactions in which it was the buyer’s or seller’s agent totaling $630.3 million. That’s a 20.3 percent market share. It had a 18.5 percent market share in 2019 when it handled 217 transactions totaling $428.3 million.
“There’s not a segment in the market that isn’t hot, including luxury.” said Mark Stark, CEO of Americana Holdings, which includes Berkshire Hathaway HomeServices, Nevada Properties, Arizona Properties and California Properties. “We’re dealing with a true supply and demand issue. We’re low on inventory because in the past downturn in 2007 to 2011 we didn’t build anywhere near the homes we should have. Now, we’re dealing with that challenge. You got household formations growing, and for our business that’s going to grow. Then you have low interest rates and a (strong) stock market. There are a lot of things fueling the success of the marketplace.”
The 2021 rankings of luxury teams in Las Vegas haven’t been unveiled yet, but in its 2020 release, Colorado-based Real Trends placed Realtor Ivan Sher’s group with Berkshire Hathaway as the No. 1 team with $322.8 million in sales. He was 19th in the nation among large teams.
Sher already has the top sale for 2021 at $11.3 million in the Country Club Hills, home of former gaming executive Barry Shier. And Sher has a home under contract in Ascaya in Henderson that is listed for $15.9 million, according to the MLS. Sher holds the all-time record of $17.5 million for a Summerlin home bought by magician David Copperfield in 2016.
When the 2021 rankings are released measuring 2020, it should show $443 million in volume, Sher said. That is his highest ever for his team of 14 agents and should be surpassed by what he is doing so far this year with volume approaching $250 million, he said.
Sher stands out in a highly competitive segment.
“Some people talk about it being a cutthroat business, but I’m not a part of that,” Sher said. “Most of us are friends. If I focus on what somebody else is doing, I’m never going to help my client, myself or my team.”
Sher credits longtime Las Vegas Realtor, mentor and business partner Florence Shapiro, who died of cancer in 2016, for helping set the stage for what he has been able to do, building a great team and support staff. He partnered with Shapiro in 2005.
“We have a great referral network to send clients my way through word of mouth,” Sher said. “Because of the business that we do, we’re able to reinvest back in our clients and create more leads and business that comes from our feeder markets.”
The No. 1 individual Realtor in Las Vegas in volume from the 2020 list is Kristen Routh-Silberman, an agent with Synergy Sotheby’s International. Her $99.2 million was ranked No. 103 in the nation among national firms.
Other luxury brokerage rankings
■ No. 2 on the list of brokerages in 2020 based on value of luxury transactions was Simply Vegas, handling 136 transactions representing both buyers and sellers. It handled 82 transactions in 2019. Their 2020 transactions were worth $285.7 million with a market share of 8.5 percent. It had a 7.1 percent market share in 2019.
■ No. 3 was Synergy Sotheby International Realty with 74 luxury transactions, up from 48 in 2019. Its volume was $176.6 million with a 5.2 percent market share.
■ No. 4 was Realty One Group with 96 luxury transactions totaling $162 million and a 4.8 percent market share. It handled 74 transactions in 2019.
■ No. 5 was Luxury Estates International with 41 transactions totaling $95.4 million.
Others on the luxury list in order of money volume were Luxe Estates and Lifestyle, Luxury Homes of Las Vegas, Urban Nest Realty, eXp Realty and Windermere Prestige Properties.
The top companies handled 852 of the 1,730 luxury transactions representing both buyers and sellers for a market share of 53.8 percent and $1.8 billion in transactions.
The average price per transaction for the top companies was $2.13 million compared with $1.95 million for the luxury market as a whole. The average price for the market as a whole in 2019 was $1.79 million, while the top companies had an average of $1.94 million.
■ Luxe Lifestyles had the top average at $2.67 million.
■ Synergy Sothebys was No. 2 in average at $2.38 million.
■ Luxury Estates International was No. 3 in average at $2.32 million.
■ Berkshire Hathway was No. 4 at $2.21 million.
■ Luxury Homes of Las Vegas was No. 5 at $2.20 million.
Volume and transactions
There were 42,249 sales in 2020 with volume of $15.3 billion, up from 41,492 sales in 2019 with a volume of $13.4 billion in sales. The average price was $362,735 in 2020 compared with $324,074 in 2019. The sales volume was $5.8 billion in 2010 after the Great Recession. It reached $9 billion in 2015, $10.2 billion in 2016 and $12.2 billion in 2017.
In the overall marketplace in 2020 that includes all price points, Realty One Group kept its perennial No. 1 ranking with 7,319 transactions, an 8.7 percent market share. In volume, it ranked No. 2 at $2.58 billion, or 8.4 percent market share.
Berkshire Hathaway, which was second in transactions, ranked No.1 in overall sales volume followed by Realty One Group in a Las Vegas marketplace that had $15.3 billion in sales. Berkshire had $2.6 billion in volume and 5,787 transactions for an 8.7 percent market share. It had a 6.9 percent market share with units.
In the volume category, the other companies starting with No. 3 were Simply Vegas, Urban Nest Realty, Signature Real Estate Group, Coldwell Banker Premier, eXp Realty, Platinum Real Estate Professionals, Keller Williams Marketplace and Huntington and Ellis.
In the transaction category, the other companies were Simply Vegas, Signature Real Estate Group, Urban Nest Realty, Coldwell Banker Premier, eXp Realty, Platinum R.E. Professionals, Keller Williams Marketplace and United Realty Group.
In the 2020 rankings, Nora Aguirre of Century 21 Americana had the most transactions in the state with 130. That was good for 147th in the nation.
Brokerages talk competition, market
“There’s a lot of business that’s out there, but there’s still a tremendous amount of competition in the marketplace,” said Bob Hamrick, chairman and CEO of Coldwell Banker Premier Realty.
The marketplace is “extremely competitive” because a lot of new agents are getting into the industry because they lost jobs during the pandemic, especially those who worked in hospitality, Hamrick said.
The Las Vegas Realtors association said its membership peaked in 2007 at 16,159 ahead of the crash in the real estate market and Great Recession. The numbers hit bottom at 10,343 in 2013 and have risen to where in 2021 they are the second highest on record at 15,287.
“Many of the new agents have worked in the hospitality industry, and that has been a big positive to the overall quality of agents,” Hamrick said. “Many were professional sales people either in the convention industry or other parts of the gaming industry. We’ve been able to attract a lot of those to our company, and they have a respectable database of clients. They are reaching out to them and getting points on the board quickly.”
Not everyone has such a positive outlook on some of the new agents pursuing the profession. For Kuba Jewgleniew, CEO and founder of Realty One Group, said it reminds him of what happened in the mid-2000s.
“In 2005 and 2006, bartenders, waitresses and taxi drivers studied to get their license over the weekend and Monday took the test and felt they were professionals,” Jewgleniew said. “There is a low barrier for entry, and there’s competition from newly licensed Realtors flooding the market, but a lot of this will be flushed out when the market gets normal and be humbled. They are muddying the waters for the true professionals, who treat it as a career and business, and give the profession a bad name.”
Those are the people who want to charge a 1 percent or 1½ percent commission versus an experienced person who can get more money for the property and get paid 2½ to 3 percent, Jewgleniew said.
“Everybody is looking at the bottom dollar right now,” Jewgleniew added.
Stark said it’s a market that is going into two different directions with a competition between full-service brokerages and limited services where agents are on their own.
Stark said a reduction of commissions amid competition is nothing new in the marketplace.
“When it’s a busier market, of course, there’s more pressure on commissions, and they’re always negotiable,” Stark said. “There is no big switch.”
The luxury marketplace has always been competitive among Realtors, but most agents don’t see themselves as ones that can vie for that business, Hamrick said. That leaves a smaller group of agents who specialize in that, he said.
The competition is stiffest in the lower price points.
“There is downward pressure on commissions,” Hamrick said. “The briskness of the market causes agents and more so the public to assume the job of a real estate agent is a lot easier. That is extremely wrong because our work in this type of market is harder than it’s ever been.
When you have 20 to 30 offers on a listing, a good real estate agent has a greater responsibility to go through those contracts to make sure they are helping their client make the best decision possible that will put the most money in their pocket with the most certainty of closing.”
Traditionally, listing agents and buyer’s agents split a 6 percent commission (3 percent each), but there is pressure on that with some Realtors accepting 2 percent or 1 percent or taking a flat fee of $500, Hamrick said.
“There’s a lot of agents who don’t place a high value on their service,” Hamrick said.
Even with homebuilders paying out buyer’s agents, the 3 percent paid by some builders has been reduced to 2 percent, a flat fee of $3,000 or eliminated all together, he said.
“Some builders have eliminated their cooperation with Realtors or reduced it significantly because of a shortage of inventory and builders have their own marketing programs to identify buyers,” Hamrick said. “They are looking to maximize their return.”
Jewgleniew, who launched his brokerage in Las Vegas in 2005, said in a hot real estate market, especially with bidding wars, there are more pocket listings because it’s a seller’s market. That means brokerages look to find a pool of buyers among their own agents rather than put it on the MLS and open up to more buyers. Those won’t be showing up on stats.
“Typically MLS data is about 85 percent to 90 percent (complete), but right now we’re below 80 percent because funny games are being played out there,” Jewgleniew said. “It’s greed. They try to find a buyer before there’s a bidding war. Everybody has buyers, but if you have a listing, you’re the king or queen of the market.”
Realty One has 1,650 agents in Las Vegas to lead the pack and spent a lot of time on training and coaching. Jewgleniew said he’s not losing agents, but other brokerages have, as Realtors look to go off on their own to face less scrutiny than they would by brokerages and increase their income.
On Tuesday, Realty One sold the franchise rights in Singapore. The company has rapidly evolved to include more than 16,000 real estate professionals in more than 300 offices across 45 U.S. states, Washington, D.C., and Canada.
Thomas Wright, the new co-owner and president of Synergy Sotheby’s International in Southern Nevada, already had a franchise in Northern Nevada in the Reno and Lake Tahoe area. Wright said they bought the Las Vegas operation last fall during the pandemic because they saw the opportunity.
“We’re excited about the Las Vegas market,” Wright said. “It’s an incredible place with a desirable climate and incredible tax structure. With the migration patterns we are seeing with the pandemic, we think there’s a lot of upside for the Sotheby’s International Realty brand in Las Vegas.”
Wright said he is not worried about competition. He said it is a full-service brokerage that gives white-glove service to consumers at every price point in the market.
“We’re seeing discount brokerages and limited-service brokerages, and we’re doing just the opposite and going to full service,” Wright said. “We’re finding people in all parts of the market and all price points that respond to that, seek that out and appreciate that high level of service.”
Some luxury Realtors are offering incentives to attract listings in this competitive marketplace.
Anthony Keep, broker and owner of Radio Real Estate, said he is offering several incentives because of the competition. That includes cruises to the Mediterranean or Mexico to people who list and sell their properties with him.
The sellers could transfer the incentive. Keep, who has been a Realtor since 2005, said he has other incentives, including airline tickets, and what he’s offering has generated a lot of leads.
“It generates traffic and people are willing to talk to you,” Keep said. “It’s a market that pushes us to the edge of the envelope to get your name out in front of other people.”