If you know anything about the real estate market in Las Vegas you’ll know that the past decade has been rocky, to say the least. When the recession hit the city in 2007, it hit hard, and it’s taken a long time to recover. Today, the Las Vegas real estate market is in far better shape, but where is it headed and what does the future look like? We’re going to try to answer that question by taking a look at Las Vegas’s market, past, present and future.
What the 2007 Recession Did for Real Estate in Las Vegas
Before the recession hitting in 2007, Las Vegas had an extremely buoyant real estate market. It was a boom town, benefiting from a massive influx of residents who all needed places to live and wanted to buy nice homes beyond their means because mortgages were so readily available. Construction companies were in their element, building home after home in new subdivisions. It was the good life for everyone concerned, until the recession hit and suddenly it all fell apart.
Almost overnight, the new home construction stopped, builders ceased operations, projects went bankrupt, and anyone who hadn’t already bought into Las Vegas was frightened away.
This was terrible news for homeowners who bought at the height of the Las Vegas real estate market as home values plunged from their peak. Add to this the fact that thousands of people lost their jobs and could no longer make their mortgage payments, and suddenly those new subdivisions became ghost towns as homes were abandoned and left to the banks.
The Las Vegas Real Estate Market in 2016
Almost ten years on and Las Vegas is showing many signs of improvement, especially over the past few years. 2007 is when the recession hit, but some homeowners were able to hold out for a few years before they were unable to make payments. Still, it’s shocking to see that in the first quarter of 2009 alone, 17,800 homes had default notices filed against them, according to RealtyTrac.
Today, homes are still being foreclosed on, but the trend in Las Vegas and the country as a whole is that the number of foreclosures has slowed.
The good news for Las Vegas is that real estate prices have been rising since they hit their lowest point around the beginning of 2012 and the rise has been slow and steady. Homeowners who were able to ride it out are now, finally, finding that they are getting back above water. While some other real estate markets have now reached new highs regarding average sale prices – going above what they were before 2007 – Las Vegas is not seeing quite the same growth. However, this is nothing to be concerned about as a slower rise is better for everyone.
Looking at average sale prices for single-family homes in Las Vegas, they reached their peak in June 2007 with a figure of $428,817 whereas in June 2016 that figure was $276,560, a shocking $152,257 lower than the peak. But, as we said above, this slow and steady rise is good for the market.
Alongside the rising prices, unemployment figures are dropping so there are going to be more people wanting to buy homes. Increased demand will push up prices further, especially if there’s low inventory, but there is now plenty of new construction taking place again, especially in the condo sector of the market as many new apartment complexes are being built across the city. However, this is when analysts begin to get concerned again; asking if there are too many new condos in Las Vegas. And, this brings us to the future.
The Future of the Las Vegas Real Estate Market
While there are new apartments being built, the market is not oversaturated with them, nor any other housing types at this time. In fact, if anything, there is undersupply with the number of condos and townhomes available for sale now as low as they have been in the past four years.
The highest demand for Las Vegas real estate is at the lower end of the market, possibly because it is at the bottom end that buyers will have the least risk if another recession were to happen, although, that is not on the cards now, or in the foreseeable future.
With increased demand and lower inventory, prices will continue to rise over the next few years, and if they continue to increase at the rate they have been, while at the same time unemployment levels continue to fall, the future is looking good for the Las Vegas real estate market.
David Maitre of One Percent Realty Maple Ridge is a multiple MLS Medallion Club member, with President’s Club membership status.