House Prices Increase In August

According to LVR stats, median sales price of existing single-family homes sold in August was $476,875 which is about a 6% increase but shy of the all-time record of $482,000 from May 2022.

Las Vegas also hit the top five for cities that had the highest share of investors buying homes (22.3 percent) at the end of the second quarter of 2024. Las Vegas leads the country in terms of year-over-year increase in investor purchases. Here is the article.

Sales are slowing with 5,268 single-family homes on the market with no offer at the end of August.  For condos and townhomes, there were 1,640 properties listed without offers at the end of August to mark a 67.7% increase from one year earlier. Overall, the number of single-family homes available has increased, and the inventory is expected to continue to increase.  Prices of homes generally decrease slightly from the fall through the winter as buyers hunker down for the holidays. 

Mortgage rates continued to drop for the sixth straight week. This drop to about 6% has motivated some buyers. However, from an investors perspective, this incentive to purchase doesn’t overcome the reality of cash flow. A single family home generates less than a 4% return and there is more potential for deprecation than ever before. Rents will probably continue to fall as there is more rental inventory. Purchasing single family homes in this environment still doesn’t make financial sense for investors.

Rents Decrease In Clark County

More new apartments are opening up, lowering both demand and price.  The median rent for all types of rentals in Las Vegas dropped $34 from the previous month to $2,085. Zillow says the Las Vegas Rental Market has cooled from the peak rental season. There are over 4,400 rental units available.

North Las Vegas –  The median rent for all types of rentals in North Las Vegas dropped $15 from the previous month with a median rent of $2,066.  There are only 516 rental units available.

Henderson –  The median rent for all types of rentals in Henderson dropped $30 from the previous month to $2,250. The Henderson Rental Market has cooled from the peak rental season. It is the only market that has shown a traditional demand curve this year. There are 1,044 rental units available. See all the statistics here.

We anticipate further declines in rents as we head into the winter. Limestone Investments is experiencing the largest amount of vacancies ever as the number of vacancies heading into September has nearly doubled from last year. Slashing prices has only made a slight dent in standing inventory. All these vacant properties are keeping us up at night. We have been encouraging all our investors to do what they can to keep current tenants. Advertising properties 10% below market with leases ending in the summer of 2025 has been a successful tactic in getting vacant units filled.

Record Number of Evictions

Clark County has one of the highest eviction rates in the country according to Princeton’s Eviction Lab. Las Vegas has almost 52,000 eviction filing so far this year, a 42% increase over the pre-Covid average. 14.0% of renters are petitioned in the courts. Grace Hartley, a research specialist with the Eviction Lab said “The population of (Clark County) has the seventh highest rate in terms of pure filing counts,” she said. “And that’s more than a lot of the states we track.”Read the full report here.

In our experience, the majority of these motions to stay are filed by tenants who are from California. They are used to liberal laws and are accustomed to singing country western songs in front of sympathetic judges. Unfortunately, we have to sit through these as the judges have become more sympathetic. In the good old days, we could get rid of a naughty tenant in 3 weeks. It now takes 3 months.

At least once a month, we receive a desperate phone call from an owner who is self managing their property. Professional rent dodgers have better tools to fool amateurs in the screening process. We are experiencing a dramatic increase in the number of fraudulent documents used in applications and have doubled our efforts to screen these clever tenants out. Our standards have risen and we have purchased more software services to mitigate this problem. A tremendous amount of effort is spent on screening so we don’t have to put our clients through the trauma of an eviction. Here is our video on our screening process.

12 Billion Dollar Train Project 

Of all the major construction projects underway, I believe this train will have more impact than all those  other mega projects combined.

In December 2023, NDOT, in partnership with Brightline West, an intercity passenger high-speed rail service company, was awarded $3 billion from the Federal Department of Transportation toward its planned $12 billion Las Vegas-to-Los Angeles high-speed rail system. The 218-mile, all-electric high-speed rail service will include a flagship station in Las Vegas, with additional stations in Apple Valley, Hesperia, and Rancho Cucamonga. At 186+ miles per hour, trains will take passengers from Las Vegas to Southern California in 2 hours and 10 minutes, twice as fast as the average drive time.

Brightline West broke ground in early 2024 and is expected to take approximately four years to build. It will probably take 6 years but so what? The number of visitors from California will jump and we may even see more Californians move to Las Vegas. A two hour train ride is not too far off from the average commute on the congested freeways in Los Angeles and the Bay Area.