Investment Housing Trends Las Vegas 2021-2022

Investment Housing Trends Las Vegas 2021-2022

What in the world in going on with Las Vegas housing? Why are local housing prices up 20% in less than 4 months? To better understand current investment housing trends in Las Vegas you need to understand the simple economics of housing supply being kept artificially low by government policies and the pandemic:

  • Institutional investors such as Progressive Residential and Invitation Homes (Blackstone Group) are swooping into our market and purchasing up the entry level SFRs. They tend to go neighborhood by neighborhood and started in the less expensive areas of North Las Vegas in early 2021 and have since expanded to other parts of the Las Vegas Valley. In the beginning of 2021 their price point was under $400k. Now we are seeing them focus on houses up to $450k+. In some situations these institutional investors are overpaying for houses just to get units as they have quarterly quotas. We see higher offers toward the end of the quarter.
  • Individual investors swarmed our market from 2010-2017. Almost half of detached single family homes are owned by cash investors and these rentals houses are occupied by Tenants.
  • There was a Governor mandated eviction moratorium through May 31st, 2021. Landlords could not serve evictions notices to get Tenants out which is limited our housing supply. This was extended multiple times but is no longer in effect. 
  • The governor had also limited landlords from serving 30 day “no cause” notices to vacate if a tenant was delinquent on rent. Landlords were having a hard time gaining control of their properties which was limiting supply 
  • Some homeowner’s are terrified of COVID and would have wanted to sell but don’t want strangers entering their house (limiting supply)
  • As a real estate broker and property manager many houses are being sold and rented to people moving here from out of state for remote work or other reasons. We have a tremendous increase in demand 
  • Shannon Chambers, president of Home Means Nevada, a state-affiliated nonprofit organization that assists homeowners, estimated that more than 8 percent of mortgage loans in the state are in forbearance, which she said is upwards of 100,000 loans.
  • CA residents are coming to Nevada for the low cost living, no state income tax and other reasons…this is pushing up demand.

Such a fascinating time in Las Vegas residential real estate. The long-term question is how the institutional investors will impact residential real estate if they ever decide to liquidate due to low return on investment, vacancies or unknown future government policies. 

The residential single family residence real estate market was previously reserved for individual investors and accidental landlords. The institutional investors have changed that in 12-18 months time. Wall Street colliding with main street…what will be the outcome? Only time will tell.

For additional reading, here is an article by the Senior Industry Fellow at Joint Center for Housing Studies of Harvard University titled: “THE EXTRAORDINARY AND UNEXPECTED PANDEMIC INCREASE IN HOUSE PRICES: CAUSES AND IMPLICATIONS”

It’s a fascinating read for anyone trying to understand why the Henderson and Las Vegas residential real estate market was seeing 20-30% appreciation during the first 4 months of 2021. 

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