Investors continue to snatch up Las Vegas homes
The Las Vegas Valley saw the biggest year-over-year jump in investor purchases of homes in the entire country, according to a new Redfin report.
Investor purchases were up 27 percent year-over-year in the second quarter, the highest in the U.S. (tied with San Jose, California), Redfin said. Redfin defines an investor purchase as one made by a company.
A Lied Center for Real Estate at UNLV study from last year found corporate investors own approximately 14 percent of all residential single-family housing stock in the valley, and 25 percent of North Las Vegas specifically.
Redfin Economics Research lead Chen Zhao said there are a number of things that could be making Las Vegas Valley residential real estate attractive to investors.
“Investors could be attracted to Las Vegas because rents there are increasing more than the national median,” she said in a statement. “In addition, Las Vegas is a tourist destination, so short-term rentals are another reason for investors to want to buy there.”
Las Vegas also hit the top five for cities that had the highest share of investors buying homes (22.3 percent) at the end of the second quarter of 2024 behind Miami which led the country with 28.5 percent, according to Redfin. Las Vegas (4.2 percent) beat Los Angeles (3.3 percent) to lead the country in terms of year-over-year increase of investor purchases.
This is part of a larger trend as investors nationwide posted the biggest increase in two years, snatching up $43 billion worth of homes in the second quarter of this year, a 13.7 percent increase from this time last year, according to Redfin.
Redfin senior economist Sheharyar Bokhari said as home prices rise in Las Vegas and across the country and mortgage rates remain elevated, more people are forced to rent as they are unable to buy. Redfin has the average home in the valley priced at $450,000, a 7.5 percent increase from this time last year. Mortgage rates, including fees, are still around 7 percent.
Rental rates increasing slowly
Rental rates in Las Vegas have slowed, but are still rising across the city even though most U.S. cities are now seeing a drop in rental prices, according to Redfin.
“One reason real estate investors are coming out of hibernation is to take advantage of robust demand from renters,” Bokhari said in a statement. “Elevated home prices and mortgage rates have pushed homeownership out of reach for a lot of Americans, which is fueling demand for rentals. Investors, many of whom can afford to pay in cash to avoid the sting of high mortgage rates, are cashing in on that demand.”
Las Vegas finds itself in the middle of a housing crisis as the median sale price for a single-family home is nearing a record high again, and condos and townhomes have already broken previous sale price records. Real estate stakeholders who spoke to the Las Vegas Review-Journal said federal control of most of the land in the valley is severely hampering developing and driving up costs on both the residential and commercial side.
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.