Property Prices Continue To Fall In Las Vegas
Redfin data, reported a median sale price for a Las Vegas home was $375,000 in December 2022, down considerably from the all-time-high of $432,000 in June 2022. A typical home sold for 3 percent below list price. And more than 23 percent of homes had a price drop, a 9.4 percent increase over December of 2021. Homes spent a median of 69 days on the market before selling in December — a huge 40 percent increase over 2021.
A lot of agents are misled by the shortage of inventory. They believe the shortage of inventory is an indication that it is still a sellers market. What they don’t realize is investors have started putting properties back into the rental pool because they didn’t get the price they wanted. This happened to a couple of our clients. For the first time in my memory, the rental market is being flooded.
Rents will be declining steadily through 2023. Most of our investors have not caught up with the latest increases because we didn’t want good tenants to flee. Leases that expire this year will only get modest increases if at all.
Builders Pulling The Plug
Las Vegas homebuilders ended 2022 with sharp drops in sales and construction plans from year-earlier levels, with a dramatic change for the over heated market. Builders also pulled 427 new-home permits in December, down 67 percent from a year earlier, and their land-buying activity was “extremely slow for the majority of the past six months or so,” the firm’s president, Andrew Smith, said in the report.
Overall, builders logged almost 8,600 net sales in Southern Nevada last year, down 33 percent from 2021, and pulled around 10,970 home construction permits, down 27 percent.
It’s also important to understand the ramifications of decreasing construction. Half the blue collar workers who support the building industry will be leaving. This will put even more pressure on rentals with the increase in inventory. The combined effect of loss of jobs and inflation is setting Las Vegas up for a rocky economy.
Water Shortage In Las Vegas – Correction
In a previous broadcast, I was using information from the wrong source about where our water is coming from. No pun intended. Our association received a very lengthy presentation from the regional water district about our water, where it comes from and the plans to continue to accommodate population growth. This video is a little tiresome to sit through but very comprehensive. In summary, Las Vegas will continue to get water even if the water levels drop. Arizona and California will not receive any water if Lake Mead drops below a certain point.
MSG Sphere in Las Vegas expected to open in September
Crews are expected to finish installing the LED screens on the outside of the Sphere by the end of the month. There will be 580,000 square feet of fully programmable LED lighting on the exosphere, making it the world’s largest LED screen.
I can’t wait to attend an event at this amazing structure.
About The Author
Jim Eagan is the Broker at Limestone Investments (license 1000724) and has been managing investment properties for over 30 years. He has written two books on the subject of property management has taught hundreds of other property managers the art of managing property.