Much like its desert climate and booming tourism industry, the Las Vegas housing market has been one of the hottest in the country. The U.S. Census Bureau ranked the Las Vegas metro area as the 97th fastest-growing, with 19,000 new residents from the summer of 2020 to 2021. And in the past decade, Las Vegas’ population has exploded, increasing by nearly 20% to about 2.3 million people today.
However, this market’s seller-friendly housing trend has become more of a buyer’s market in 2023, with home sales and prices showing signs of weakening in the first few months of the year.
Las Vegas Housing Market Trends
There’s no doubt that the Las Vegas real estate market is rebalancing. For instance, a September 2022 Redfin report for the nation’s 100 most populous U.S. metropolitan areas declared that Las Vegas is the second-fastest cooling market. Seattle took the top spot.
Simultaneously, the city is one of the 10 most popular migration destinations. While selling a house in this metro area is becoming more challenging, data indicates people remain interested in moving to Las Vegas.
Home Prices Are Dipping
A piece of good news for homebuyers is that median home prices are trending lower. Las Vegas Realtors® (LVR) reports the median sales price for a single-family home was $495,000 in May 2023, down 5.71% from a year ago.
Digging deeper, Redfin’s data shows that 23.3% of listings had a price drop in May 2023, or a 1.6% decrease year over year, suggesting that more sellers are having to acquiesce to lower offers in a tight market.
In addition to lower prices, fewer homes are selling above their listing price. Redfin reports that only 26.5% of homes sold above list price in May 2023 for a 32.7% year-over-year decrease, signaling a more balanced market. This figure peaked at 58.7% in April 2022.
Fewer Homes Are Available
Unfortunately for buyers, there’s not enough inventory of single-family homes in Las Vegas. The number of single-family homes on the market in May 2023 was a little over 6,500, which is down 3.28% from the year prior. However, the busy spring and summer selling months could bring more listings—and buyer competition—to the Las Vegas housing market.
Las Vegas Home Price Index
Home prices in Las Vegas have softened considerably this year, mirroring national housing market forecasts for lower home prices and fewer sales. These trends are due to a combination of higher mortgage rates and a lack of affordable single-family homes.
According to the latest S&P/Case-Shiller NV-Las Vegas Home Price Index, the price index was 270.45 in April 2023, down 6.78% from a year ago and notably lower than July 2022’s peak of 300.05.
Buying a home in Las Vegas is currently more affordable than other markets across the U.S. but still well above the city’s previous record high of 234.78 in August 2006.
Median Days on Market
Active listings within the Las Vegas-Henderson-Paradise metropolitan statistical area remain on the market longer, although homes historically take longer to sell during the fall and winter seasons.
The median days on market in May 2023 was 46 days—double the post-pandemic low of 23 days in April and May 2022.
As a long-term comparison, the pre-pandemic median average in October from 2016 to 2019 was 49 days, suggesting that the market is returning to its historical norm.
Las Vegas Housing Market Forecast
Like most local real estate markets, Las Vegas is shifting from a seller’s market to a neutral environment that can please buyers and sellers.
Home Prices Are Likely To Keep Declining
Current trends suggest home prices will continue to decline from the highest median listing price of $499,900 in May 2022 as buyers become more selective since mortgage rates hover near 20-year highs and inflation continues to squeeze consumers’ budgets.
Unfortunately, the Las Vegas market predictions don’t publicly estimate how much lower they’ll go over the next 12 months and if they’ll ultimately return to the pre-pandemic median sales price of $320,000.
For now, home prices are leveling out and a sudden market crash is unlikely due to a healthy local economy and interest from out-of-state migrants wishing to reside in Southern Nevada.
Homes Will Take Longer To Sell
Las Vegas sellers will see their homes sit on the market longer and may have to negotiate on their list price more this year.
Plus, buyers may be less eager to make an offer as soon as an MLS listing goes active. Additionally, data suggests that seller price reductions have become more prevalent since median listing prices peaked in the summer of 2022.
With current mortgage rates at 7.12% for a 30-year, fixed-rate mortgage, homebuyer demand has waned. Less competition among buyers means sellers should plan on waiting longer to receive an acceptable offer.
Is It a Good Time To Buy a House In Las Vegas?
With home prices moderating, it may be a good time to buy a house in Las Vegas and Southern Nevada. However, there may be slim pickings to choose from, with less inventory to choose from compared to previous years.
Since listing prices began their rapid run-up in February 2021, the market momentum no longer strongly favors sellers. Still, homes remain historically expensive for many buyers who are also facing higher borrowing costs. In the current market, buyers might have success negotiating seller concessions and submitting a lower initial offer.
It’s difficult to predict how much higher mortgage rates might go and if the rate increases will offset potential home price decreases. So, you may decide to buy now if you can find an affordable house that fits your needs and budget.
Additionally, first-time homebuyers may also qualify for special programs that make housing more affordable.
Is It a Good Time To Sell a House In Las Vegas?
Existing owners contemplating selling are not in as competitive a position as they were post-pandemic. While home values have cooled since last summer, they’re still near record highs and many homeowners who purchased before the pandemic are likely to have home equity.
As the housing market slows, competition is increasing among sellers. If you do plan to sell your home in 2023, ensure your home is priced competitively and that it stands out from other listings. Consider sprucing up the landscaping, fresh paint, minor repairs and other cosmetic upgrades that give your home an edge in online property searches. Taking these steps can help your home attract more buyers and compete with other homes on the market.
Josh Patoka – Forbes Advisor
