The Las Vegas Strip was in the news spotlight last week as casinos reopened for business following 78 days of shutdown ordered by Gov. Steve Sisolak to halt the spread of the coronavirus. The reopening brought out crowds of gamblers and tourists eager to engage the profitable acquaintance of Lady Luck.
Tom Blanchard, 2020 president of Las Vegas Realtors, welcomed the revived activity in the city’s most famous industry.
“It’s great to see this after bicycling up and down the Strip and seeing nobody except other bicyclists,” said Blanchard, who is also sales director/broker at Renters Warehouse – Nevada. “The parking lots for the casinos are packed. The casinos are packed, although they are restricted in how they have people stacked up. People strolling around downtown with whatever separation they can – it’s great to see.”
As the Las Vegas attractions regain their audience, the city’s housing market is also poised for a comeback – and not a moment too soon. In May, Las Vegas Realtors reported sales of 2,075 existing homes, condos and townhomes, down by more than 300 in April and down by nearly 1,400 from March.
Blanchard acknowledged the weeks of shutdown were a challenge for Realtors trying to sell properties. He added that “no one really wanted to learn” how to conduct virtual home tours, but they had no choice under the circumstances.
“We were able to show properties by appointment and following all the CDC guidelines, but still it was very difficult,” he said. “We were not able to show any homes that were tenant-occupied, which took about 40% of our inventory out of the market. So, we’ve been working on a reduced amount of homes to really sell and doing the best that we could through the virtual process.”
But now with the city reopening for business, more potential homeowners are on the prowl for property.
“I deal with a lot of Realtors here in town,” said Jeff Guinn, CEO of Battle Born Capital. “I’ve spoken with them over the last four or five days since Las Vegas has opened up. It seems like the traffic has just been phenomenal, that people are coming back and buying and looking again.”
Guinn pointed to vehicular evidence of a newly animated market.
“Traffic on our freeways here in Las Vegas has increased tremendously,” he added. “I talk to the guy that sells a lot of gas here in town. He says gas sales are going up and up. I think when you have all that together, the housing market is going to continue to do well here.”
One key aspect helping sales has been a level of stability in home prices. While sales slumped during the pandemic period, home prices in the market remained steady. Las Vegas Realtors reported the median home price in May was $315,000, up from $310,000 in April but down from the record high of $319,000 set one year earlier.
Housing and mortgage professionals within this market give credit to local home prices for bringing a wave of California residents in search of residential property.
“What you can buy for a half million dollars here is a heck of a lot different than California,” said Guinn.
Leo Vekslin, branch manager and senior mortgage adviser at C2 Financial Corp., blamed “some liberal policies in California” for fueling an exodus into Nevada, but he also noted this movement was a long time coming.
“Before the COVID-19 started, I would say almost every month I had transactions with clients from California,” he said. “They were either purchasing primary residences or second homes, and some were looking for investment properties.”
Blanchard observed that Las Vegas was “becoming a bedroom community” for southern California residents, although he worried that this influx would inflate prices and keep local residents from obtaining affordable homeownership opportunities.
“It’s a double-edged sword,” he said. “I’m glad they’re coming, but I just wish they’d be more frugal with their money. First-time homebuyers have a harder hill to climb because of the price points that we’re at, but there are still homes that are more in the affordable range.”
Ivan Sher, broker/owner at The Ivan Sher Group, highlighted another selling point that is reeling in the California buyers.
“Nevada has no state income tax and California has the highest state income tax,” he said.
Sher’s focus is on the luxury housing market, and he reported seeing a dramatic increase of buyer interest in this sector. Helping to stir this activity, he added, was an increase in luxury home construction and the increased availability of jumbo mortgages.
“There was a time when it was very difficult to get jumbo mortgages, but that has eased up dramatically,” he said. “And the rates are phenomenal.”
But how long can this new euphoria for homebuying continue? Sher was reticent to give a 12-month forecast, noting the uncertainty on how the economy would react following November’s election. Guinn, however, was certain on what the near-future held.
“I think it will be fantastic,” he said. “I think now that Vegas has opened up, it’ll continue to grow like it was before. We still have the Raiders’ stadium getting ready to open up here and you have a couple more hotels that have anywhere from 4,000 to 5,000 rooms opening up, so we can have anywhere between 4,000 and 6,000 people employed. You’re going to continue to see a housing demand here with everything that’s coming on.”
Velksin predicted the near-future will also see an increase in bidding wars among buyers.
“It’s really picking up as far as the purchase transactions and the interest,” he said. “I see more and more buyers now submitting the applications. Yesterday, I had a buyer make an offer and the offer was rejected because they received multiple offers, and some were above list price. That should tell you something.”
