Las Vegas real estate market on ‘wild ride’ for past 5 years: Zillow
Las Vegas’ residential real estate market has been on a “wild ride” for the past five years but could finally be getting off the roller coaster ride that started during the pandemic, according to new statistical analysis from Zillow.
The Las Vegas market recently entered more “balanced territory,” said Kara Ng, a senior economist with Zillow, noting this is the first time buyers and sellers have been on “neutral territory” in years; however, home prices are still on the rise and could still break previously set records.
“Home value appreciation remains fairly robust in Las Vegas at 5.7 percent year-over-year, again among the strongest in the country,” said Ng. “The Las Vegas market has been on a wild ride over the past five years from red-hot competition for homes when mortgage rates reached record lows, to a massive pull-back in demand in 2022 when they rose, then a warmer 2023.”
Zillow’s home value index has the average price for a home in Las Vegas at $431,000 in September, a 0.1 percent drop month over month, but a 5.7 percent increase year over year. This is now within earshot of the record high of $433,222 set back in September 2022 during peak of inflation coming out of the pandemic.
Ng noted an increase of building permits following the pandemic should help the housing supply over the next few years. However, mortgage rates once again nearing 7 percent have left many potential sellers “locked” into their homes and the ultra-low interest rates they scored during the pandemic.
Las Vegas finds itself in the middle of a housing crisis as a lack of available land has driven up the price of land and homes in the valley, with the private sector pointing the finger at the federal government as the Bureau of Land Management controls approximately 88 percent of the land in Clark County and has been slow to release it over the past few decades.
‘Leaving the meteor speed of appreciation behind’
Steven Poscente, a Las Vegas Realtor with Remax Advantage who has lived in the valley for close to 40 years, said the research data he’s seen shows a 3 percent decrease in home prices by the end of the year. He said any smart real estate agent should have been putting money away for a rainy day during the boom cycle during the pandemic.
“Many of us were spoiled and have been unrealistically holding our breath,” he said. “Leaving the meteor speed of appreciation behind, we are likely to experience continued growth, albeit at a snail’s pace for now.”
Real estate sales last year were the worst since 2008, and Poscente said he’s optimistic Las Vegas real estate’s tendency to go through pronounced boom and bust cycles may be over.
“It’s very unlikely that the real estate market will crash,” he said. “With our buoyant, almost healthy economy, strong job market and inventory being low are all factors that prevent the market from crashing.”
Poscente agreed that Las Vegas real estate has been on a wild ride for years, even decades as the city has experienced cycles such as the Great Recession and the pandemic more than other parts of the country due to its heavy reliance on tourism as an economic driver.
He said he hopes the city can get off the roller coaster it’s currently on and have a more “sustainable market dynamic as opposed to the explosive growth from previous years.”
“The average price of a house when I moved to Vegas in March of 1991 was $104,500,” he said. “I’ve invested heavily and lost heavily and appreciate the fact that the peaks and valleys are currently stable.”
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.
