Home prices up, supply down in Las Vegas

Dive Brief:

Home prices in Las Vegas are on the upswing as the city faces a housing shortage. The Las Vegas Review-Journal reported that median sales prices in Southern Nevada rose 2.9% from March to April to $249,000, an increase of 12.9% over April 2016.
The region has less than two months’ worth of for-sale homes, according to VegasInc. The 5,083 single-family homes for sale without an offer in late April was 31% less than the previous year, while for-sale condos and townhouses were down 71% for the period to 639 properties.
Homes are selling faster in 2017, following a 2016 that saw sales increase by more than 3,000 units.

Dive Insight:

After years of booming activity, the Great Recession hit Sin City hard, with developers halting major commercial projects. But three major projects — the Raiders Stadium, an expansion of the city’s convention center and a new Wynn resort — are expected to jumpstart the market.

The housing market is recovering as well, including affordability that is drawing buyers from pricier cities in California and elsewhere. Still, only 0.6% of homes in Las Vegas have returned to pre-recession values, Trulia found, the lowest percentage of all major U.S. metros.

One ongoing challenge to housing supply is the number of underwater homeowners: Las Vegas led the country in borrowers in negative equity, with 16.6% at the end of 2016, the Las Vegas Review-Journal reported. Investors also are holding on to properties they purchased for bargain prices during the recession.

Rental prices also are climbing in Vegas, with rents for three-bedroom, single-family homes rising more than 3% from Q1 2016 to Q1 2017, a percentage point higher than the national average. Apartment rents went up 5% for the period in Vegas and increased 15.5% (one-bedroom) and 11.7% (two-bedroom) in the suburb of Henderson during that time.

Foreclosure rates in Las Vegas rank 12th-highest among the country’s largest cities, with one in every 304 homes versus one in every 569 homes nationwide getting a foreclosure filing in Q1 2017. Still, the city saw a notable drop of 29.5% in foreclosure filings from Q1 2016 to Q1 2017.

For more housing news, sign up for our daily residential construction newsletter.