Las Vegas home prices continue to increase despite a national slowdown
This year, home prices in the Las Vegas metropolitan area rose higher and faster than most areas in the country.
Real estate prices in Southern Nevada increased by 7.1% year-over-year in April 2019, according to the S&P CoreLogic Case-Shiller index. This is a considerable rate of growth relative to the more modest national average of only 3.5%.
In the first quarter alone, home prices have increased by over 10% compared to the same period last year, a recent report by the National Association of Realtors revealed. The median home price after the first quarter of 2019 was recorded at $298,900, whereas it was at $270,200 a year ago.
This is an encouraging trend, as home price gains have been slowing down on the national scale, especially affecting large metropolitan areas. The CoreLogic index reveals that where most housing prices in the United States have either fluctuated or retreated over the past 13 months, Las Vegas continues along a relatively steady trajectory.
In comparison, markets that are already competitive and high-priced markets only rose marginally. San Francisco, CA saw just a 1.8% increase, while San Diego, CA grew by only 0.8%. Seattle, WA home prices remain unchanged from where they were a year ago.
Only a few other major metros exhibited growth similar to that of Las Vegas. Phoenix, AZ follows Las Vegas as the second-fastest growing market with a rate of 6%. Tampa, FL comes next at 5.6%.
Phoenix is the only other metropolitan area that has maintained month-over-month price growth since January 2018, according to the index.
The Las Vegas real estate market is not in a vacuum, however; it has also shown signs of cooling down. The 7.1% year-over-year growth rate is notably lower than it was in August 2018, for example, when the city recorded a 13.9% increase.
How Las Vegas is tempering the national slowdown trend
- The local economy is thriving
The strong local economy is anchoring the steady performance of the Las Vegas housing market.
Already known as a vibrant entertainment hub, the city is an attractive tourist destination. But with the city expanding its local business environment with an infusion of new, high-profile enterprises, Las Vegas is also becoming an attractive destination for people looking for quality residential real estate.
The arrival of fast-growing tech companies, for example, is attracting a growing audience of young home buyers. ELEKS Software and Zappos.com are prominent examples. Amazon also recently set up camp for a new fulfillment center in the northern part of the city.
- Affordable real estate prices and cost of living keep demand in Las Vegas high
Proximity to high-priced markets makes Las Vegas a smart alternative for home buyers and investors. Demand remains high here because residential, commercial, and investment-ready real estate are more affordable here compared to what cities like San Francisco and Los Angeles can offer.
Las Vegas also boasts of a cheaper cost of living compared to San Francisco and Los Angeles, despite the glitzy lifestyle commonly associated with it. Nevada also has an average effective property tax rate is just 0.77%, which is one of the lowest in the country. The national average is 1.19%. No taxes are levied on personal or corporate income, as well as on food (for personal consumption) and medicine across the state.
- The local population is growing along with the housing stock
According to the Greater Las Vegas Association of REALTORS (GLVR), the end of 2018 saw significant growth in the Las Vegas housing supply. There were around 10,000 single-family homes on the market by the end of November 2018 – a whopping 54% increase over the previous year.
While the growing housing stock is expected to stifle the rise of home prices in Las Vegas, the influx of new residents is helping keep demand competitive. The US Census Bureau estimates that the city’s population has grown by 10% since 2010. Las Vegas was home to 644,644 people in July 2018, a marked increase from 584,509 in April 2010.
- Low mortgage rates are appealing to buyers
Another reason buyers continue to increase is the decline in mortgage rates nationwide. At around 4%, current rates for a standard 30-year fixed-rate loan are at their lowest level since 2017, putting Las Vegas sellers in an excellent position to reap the most rewards the local real estate market has to offer.
To keep up with the latest news and developments in the Las Vegas real estate market, get in touch with Leading Vegas Realty. Call us today at 702-545-6050 or send an email to Emily(at)LeadingVegas(dotted)com.