The Las Vegas real estate market is in a complicated spot right now.
Land to build on is becoming more scarce and more expensive. Mortgage rates remain elevated, along with home prices. And the affordable housing crisis continues to worsen.
As droves of people continue to move to Nevada, what does the state's real estate market look like?
HOME PRICES AND INTEREST RATES
Home prices skyrocketed shortly after the COVID-19 pandemic and many thought they would come crashing down, but that still hasn’t happened.
According to a recent Las Vegas Realtors Association report, as of June 2024, the median home price for a sold home is $475,000. A year ago it was $440,990.
Interest rates have remained flat as well, between 6.5 and 8 percent for a typical 30-year fixed-rate mortgage.
Jonathan Gedde, founder and CEO of SimpliFi Mortgage, said there might be some rate cuts in the future because unemployment rates have increased and inflation has decreased.
“That’s giving the Federal Reserve the confidence to say ‘okay, our elevated interest rate environment is working and soon we’ll be able to cut interest rates and loosen the economy a little bit,” he added.
Shanta Patton-Golar, CEO for Patton and Associates Real Estate Group, said a lack of homes being built along with migration of many people from California is driving prices higher.
“If people can sell their $3 million house, come here and buy something for cash, or even put a significant amount of money down, that also drives up the price,” Patton-Golar said.
“People who live here currently cannot afford to compete against them.”
AFFORDABLE HOUSING
Real estate is not just about home ownership. It also encompasses multi-family housing like apartments and rentals.
For lower-income households, renting is the only option. But Lorri Murphy, board chair of the Nevada Housing Coalition, said those people are in crisis because there are so few affordable housing units available.
“One in four renters are paying more than 50 percent of their income on housing,” she said. “Clark County has a shortage of about 78,000 affordable housing units.”
Additionally, developers need more land as much of Clark County is, in a sense, landlocked. Of 5.15 million acres, most if it–4.45 million acres–is owned by the federal government.
Murphy added that some developers are struggling with a gap in financing. Costs have risen, but interest rates also remain high–meaning borrowing money is much more costly. It’s a double whammy some developers just can’t overcome.
Murphy said recent federal and state programs have supplied some money to help cover that gap, but those funds are running out.
“We’re struggling to find ways to replace that gap financing. We’re going to have to get creative.”
Murphy continued.
“We may be proposing some things that are going to be difficult for people to accept. We may look at certain fees that may make a funding stream available, but the problem is, if we don’t close that gap--building will stop.”
Guests: Jonathan Gedde, founder and CEO, SimpliFi Mortgage; Lorri Murphy, board chair, Nevada Housing Coalition; Shanta Patton-Golar, realtor and CEO, Patton and Associates Real Estate Group
