Some of the world’s largest real estate investors have poured billions of dollars into Las Vegas over the past several decades, developing some of the most iconic pieces of real estate in the country. While these major investments may get all of the attention, a larger number of investors are looking at Las Vegas to capitalize on its growing population and real estate market.
Why consider Las Vegas for real estate investing?
Las Vegas is most well known as the country’s gambling and entertainment hotspot, but many people don’t realize the city is seeing a lot of growth in other industries. Las Vegas has been attracting a number of businesses relocating from other cities and is also gaining popularity as a place for startups.
Not only is Las Vegas one of the sunniest cities in the country, but it also has a very friendly business climate. Neither the state of Nevada nor the city of Las Vegas has personal or corporate income tax. The city also has a much more affordable cost of living than other startup hotspots like Silicon Valley.
Another thing many people don’t realize about Las Vegas is that the famous Strip only makes up a very small piece of the city and doesn’t accurately represent the lifestyle and culture of most people who live there. Several areas outside of the Strip offer safe, family-friendly places to live, work, shop, and eat.
The state of the market
Las Vegas has been hit especially hard from the COVID-19 pandemic because the local economy is still heavily dependent on casinos and resorts, and these industries have yet to bring back all of their staff since the shutdown.
When looking at the Las Vegas market, we’ll review the entire surrounding area known as the Las Vegas-Henderson-Paradise metropolitan area. This area is also often referred to as Las Vegas Valley because of the surrounding landforms. This area includes Las Vegas, North Las Vegas, and Henderson.
- Unemployment is still high. While casinos and resorts are beginning to open back up, and the number of travelers heading to Las Vegas is slowly increasing, the unemployment rate is still quite high. Luckily, this isn’t a long-term problem resulting from companies leaving the area. The unemployment rate should improve each month as we get the COVID-19 pandemic under control.
- Rental vacancies are low. Despite the high unemployment rate, rental vacancies have been trending downward to record-low rates. This shows a growing demand for rentals in the area and a positive sign for investors in the area.
- Rental prices are up. As the vacancy rate lowers, the rental prices in the area are increasing. This has been a positive trend since 2016, and prices are increasing at a faster rate than the national average. This is a further indication that the demand is strong in this market.
Las Vegas housing demand indicators
Charts courtesy of Housing Tides, an EnergyLogic company.
Las Vegas’ unemployment rate was improving steadily from 2016 to the beginning of 2020, and at a faster pace than the national unemployment rate. However, once the city shut down due to the COVID-19 pandemic, the unemployment rate quickly shot up to its peak of 34% in April 2020.
While the unemployment rate has been improving in Las Vegas, it is still trailing behind the rest of the country by a hefty margin. Since the city’s economy is so heavily dependent on tourism, the area won’t see any meaningful improvement in its unemployment rate until coronavirus fears subside and social distancing is a thing of the past.
Median home price
While home prices are up in Las Vegas, it’s more important to note the area’s median home price compared to the national average. Home prices are up across the country because low interest rates are making homes more affordable and bringing more buyers to the market. It’s not necessarily a sign of a strong market since it could come crashing down if you took low interest rates out of the equation.
What is a positive sign for the Las Vegas real estate market is that the median home price started rising at a faster rate than the national average in 2018 and has continued that trend most months since.
Contact Blackbird Realty And Management
For more information about Las Vegas rental properties, or to speak with us about our property management services, contact us today by calling (702) 903-3556 or click here to connect with us online.