Las Vegas may look like a luxury town to outsiders and people focusing on what they can see from the Strip, but the reality is that the Las Vegas residential real estate market has been, and will continue to be driven, not by the Wynns and Adelsons, but by the people that serve them dinner and park their cars.
My friend Keith Lyman, president of the Greater Las Vegas Association of Realtors, has been repeatedly quoted in various articles and reports, that the Las Vegas residential market “has been buoyed by the high-end market”. Many of these articles are telling us that luxury is the place for investors to go in the Las Vegas real estate market. While that may very well be true, I think they’re wrong, and I have a track record of being right about these things…just ask some of my happy clients.
Please don’t for a minute think I’m bucking my friend Keith, because I’m not. Keith is absolutely right and supported by the stats when he says that the recent increase in the median sale price of a Las Vegas home has been spurred higher by an increase in luxury sales. In his defense, he’s not out there suggesting that investors move their money to the upper crust neighborhoods, like so many of the analysts and other real estate bloggers. I believe they using that data incorrectly, allowing dollar signs to cloud their better judgment while ignoring the other, more relevant indicators of the coming market.
As I mentioned earlier, Las Vegas may look like a luxury town to outsiders, but the reality is that the Las Vegas residential real estate market has been, and will continue to be driven, not by the Wynns and Adelsons, but by the people that serve them dinner and park their cars. The folks that work on the strip, support the strip and provide goods and services to the rest of the valley, are the folks who need condos, townhouses and homes to rent. As their jobs come back and their pay increases with the increased health of the tourism industry, they are moving out of mom’s house, dumping the roommates and getting their own places. THESE PEOPLE ARE THE
LAS VEGAS REAL ESTATE MARKET’S FUTURE!
Our market (much like its’ economy) is experiencing an unprecedented period of steady, sustainable growth, as it continues to recover from the recession that hit the market like a proverbial ton of bricks. This is unprecedented in the 14 years I’ve lived and worked here, as well as the 14 years before I moved my family to this desert oasis. Our local history tells of wave after wave of boom and bust, a virtual roller coaster of a financial ride, ending with the abject devastation that was 2007-2012. For those who rode the wave and knew how to get off, a fortune was made. Most small investors though, went down with the ship and were down and out by the end of 2008.
The silver lining in the dark and violent black cloud that rained fire on those who dumped their life’s savings into what so many were calling a no-brainer market before the crash, is that Nevada passed a series of new and strict foreclosure laws that, combined with the new national and state banking regulations, stopped the fatal blood-letting and are now preventing the crazy speculation that got us there in the first place! In a rare instance of government regulation, gone right, these new laws have created an atmosphere where the market is actually reflecting the local economy and is therefore stable and sustainable.
In 2006, the median home value in Southern Nevada was a ridiculous $315,000! What fools we all were to think that price was in any way reflective of the local economics. We should all have seen and known that a Pit Boss at the Wynn could never have afforded a mortgage or the rents that support a $315,000 three bedroom, two and a half bath home!
The same home that in 2006 cost $315,000, is now officially selling for $204,000, but in the real world on the ground in the Las Vegas valley, that price is actually a lot less. The more accurate value for the average 3/2 SFR (Single Family Residence) is in the very affordable $150-180,000 range, not climbing at an unsustainable 20-30% but at a more reasonable 9-13%. If you think that 9-13% is still pretty high, keep in mind how deep a hole we were in just two years ago…yeah, I thought you’d get it! At least for the next few years, 9-13% is reasonable and sustainable here.
It’s funny that when I mention appreciation rates of low double digits to some of my clients, they scoff “Is that all?”, but if I say it to some of my Cleveland, Ohio friends, they think it’s fantastic!!! I guess the message here is, “bring your investing dollars to Vegas and be spoiled.” I’m okay with that, come to Vegas and let me help you get spoiled!
The heady days of riding a tsunami to spectacular appreciation highs are over. I cannot tell you that you can get rich quick in Las Vegas, like I did just a few years ago but that doesn’t mean you can’t do better than most, investing in the Las Vegas market. While we’re not breaking any speed records now or are likely to break any records in the foreseeable future, the traditional long game of investing has gone “Vegas” and it’s still time to buy here, to hold here and to make money here!
“Since 1917 Realty” is a family owned and operated real estate/property management firm located centrally in the Las Vegas/Henderson area. We are not a huge corporate-boxed franchise that requires you to adapt to us, but quite the other way around. We are well organized and effective at helping small-medium sized investors make the right decisions with their valuable investment dollar. Contact me (Jay Rosen, Broker/Manager) with all your real estate investment questions/plans and get the right analysis and help with decision-making from a company whose main goal is to work effectively to meet your goals, without blowing smoke up your pant leg.
