According to a report released this summer by online real estate tracker Zillow, only two markets in the country have experienced more upward growth in real estate value than Las Vegas: Dallas and Seattle.
Double-digit annual growth in home values has become the norm in Southern Nevada, and industry analysts aren’t confident that pace will ebb any time soon.
Naturally our inventory issues help explain why the Las Vegas housing market is performing with such upward mobility.
Any time there is less of a product when demand is high, it’s price will rise; because: economics.
Pushing that decline in available housing could be due also to slow development of more reasonably-priced housing.
Developers have been focusing on apartments and condos, as well as higher-priced up-market homes.
Communities like Summerlin, for example, have also become the domain of single-family rentals owned by large investment groups.
With a steady supply of tenants and a very low entry point, institutional residential investors have made out very well in Las Vegas, and will have little reason to execute an exit strategy any time soon.
People have expressed concern about another bubble forming across the country, and especially here in Las Vegas.
Realtor.com points out that Great Recession was spurred on by shoddy lending, the pursuit of large gains, and over-development.
In contrast, today’s home value is being supported by job growth while under much tighter lending standards.
Last month, the unemployment rate was at its lowest point in 17 years, assuming those complicated measurement tactics are on point.
Those standards have also slowed flipping and over-building, further stabilizing markets around the country.
We have to use the term “stable” carefully because new home building is down considerably. Yes, markets aren’t volatile, but they are extremely short on inventory for all these people with new jobs to purchase.
It looks like what we need is more time for home building to catch up with the markets that need it.
We won’t hesitate to recommend that now is a great time to look to buy a home in Las Vegas. However, we want to stress that it’s probably going to take longer than it did a few years ago.