Are home prices dropping in Las Vegas? If you are a seller, you want that answer to be, “No” and if you are a buyer you’re cheering on the lower prices. While prices consistently change it’s important to keep on top of what’s happening in the real estate market. Always feel free to reach out to me if you want even more insights into the current housing market trends beyond what I’m sharing here. There are always fluctuations based on what’s happening with supply and demand, interest rates, and the general state of the economy.
Are Home Prices Dropping In Las Vegas?
Currently, home prices have warmed up in Las Vegas, and not just because of the weather. Since last year there have been more homes available for sale and the median price is $475,000 for a single-family home which is up 7.7% from $440,990 back in June of 2023. And it’s not just single-family homes that are on the rise. The condo/townhouse market trend shows the current median price at $295,000 which is up 7.3% from $275,000 back in June of 2023.
Several factors go into price fluctuations and I will outline some below:
Supply and Demand
The Las Vegas area is currently a seller’s market. Demand for houses is high, while the inventory is lower. When this happens, oftentimes there can be bidding wars that drive the home prices up even higher than the asking price. There have been constraints on land availability for new construction which also curbs the number of new homes available. As of June 2024, the number of new listings for single-family homes was 2,819 units which was down 9.7% from the prior month. The number of new listings for the condo/townhouse market was 828 units, which was down 8.7% from the prior month.
Part of the demand is also due to an increase in population growth in the Las Vegas area. The growth has to do with benefits like no income tax, the warm climate, many job opportunities, a relatively affordable cost of living, and the fact that many people choose to retire in Las Vegas. Investors are also seeking to get their hands on Las Vegas real estate for either long-term investment opportunities or rental income. When there is an increase in investment capital it also raises property values. Therefore, when people want to live and/or buy in Las Vegas and the inventory is low prices are going to go up.
Interest Rates
The current interest rate can make a difference when buyers are looking at what they can afford. Since we’ve had higher interest rates than in the past it means buyers can afford less. For example, the approximate monthly cost of a $300,000 30-year mortgage at a 4% interest rate is $1,432.25. If you look at the current interest rate which is around 7% then that same $300,000 mortgage would cost approximately $1,997.95 a month. When interest rates are higher people want to upgrade to new homes, and fewer investors. With less demand, it can cause prices to decline. However, even though interest rates are higher now than in past years, because of limited supply and higher demand house prices have not plummeted. If interest rates do start to go down then the lower borrowing costs will increase the purchasing power and could add to buyers bidding even higher prices for homes.
Economic Development
The leisure and hospitality sector has seen significant growth in Las Vegas. There has been a resurgence in tourism with major events like the Formula 1 Las Vegas Grand Prix and Super Bowl LVIII being hosted there. Rebounding from the pandemic, in 2023 alone this sector saw an increase in 16,000 jobs.
Las Vegas has seen a lot of economic growth in areas besides the most popular ones of entertainment and tourism. Sectors like healthcare, technology, and logistics have been growing, resulting in a demand for not only residential real estate but also commercial real estate. Google has invested in data centers in the area, with plans to expand even more. Amazon has multiple fulfillment centers in Las Vegas which has created thousands of jobs. Both FedEx and UPS have a significant presence in Las Vegas with major distribution centers. Providing more job opportunities in specialized careers which have higher incomes transfers into the market because people have more money to bid on what they want and therefore drive home prices up.
Another benefit of economic growth is the direct impact it has on communities. When such growth happens there is a positive effect on the infrastructure that enhances area schools, healthcare facilities, and community parks and recreation facilities. Improvements in neighborhoods make them desirable and also lead to an increase in property values.
The Bottom Line
If you’re looking for some of the highest-priced homes in Las Vegas there are some exclusive and sought-after areas. The Ridges is a gated community located in Summerlin offering views of both the Las Vegas Strip and Red Rock Canyon. Another prestigious community is Queensridge which is located in the western part of Las Vegas. Then if views of the Las Vegas Valley are what you’re searching for the MacDonalds Highlands in Henderson might be your top choice. The list of luxury neighborhoods goes on as Las Vegas definitely delivers the glitz and glamour in all areas from entertainment to homes.
