Merri Perry, the newly appointed president of Las Vegas Realtors, is optimistic about the Las Vegas housing market. Speaking to business magazine Vegas Inc., the veteran real estate agent advised aspiring buyers to take advantage of the current market conditions despite rising interest rates.
A Snapshot of the Las Vegas Housing Market in 2023
By the end of 2023, the Las Vegas housing market continued to show signs of stability. The state of Nevada, in general, saw a slight increase in home and condo prices from 2022. The average home price rose by 1% to $400,354. Perry held the same position as most housing experts, predicting 2024 to be another banner year for the city’s real estate market.
Merri Perry also highlighted the National Association of Realtors forecast of increased home sales in 2024 if mortgage interest rates drop. This is highly likely given the downward trend recorded in recent months.
However, the Las Vegas housing market faced several challenges in 2023. These included:
- Affordability issues
- Inventory shortage
- Low sales volume
What Caused These Challenges?
Like the rest of the country, the Las Vegas housing market faced affordability issues in 2023. In September, mortgage rates were at their highest in over 22 years. This priced out most potential home buyers, especially first-time homebuyers and veterans.
As a result of the high mortgage rates, sales went down, as noted by the experienced real estate agent and Las Vegas Realtors president. Las Vegas realtors sold fewer homes in 2022 than in 2021, which was a record year where sales exceeded the 50,000 mark. This was despite the high demand for housing.
The high mortgage rates discouraged existing homeowners from listing their homes. This was because they would have to pay higher interest rates when purchasing a new home. As a result, housing inventory went down significantly. This further explains the low sales activity.
The Las Vegas Realtors Association had a three-month supply at the turn of the year, significantly below last year’s four-month supply. Given that mortgage rates will not floor any time soon, Perry challenges builders to act quickly to alleviate the market imbalance.
How Does the Las Vegas Housing Market Compare With Other Markets?
Las Vegas compares favorably with other hot markets across the U.S. This is particularly true for California’s metros like San Diego, with a high cost of living that’s pushing many locals to find residency in more affordable cities like Las Vegas.
Also, Las Vegas has recently become a major sports hub following the arrival of Dallas Maverick, Oakland Athletics, and Formula 1. Additionally, Hollywood figures are increasingly choosing Las Vegas as a tour destination, which is a clear sign of its vitality and a solid foundation for real estate growth.
Expert Predictions for the Las Vegas Housing Market for 2024
The Las Vegas housing market outlook for 2024 will largely hinge on the fluctuation of interest rates. As it stands, potential buyers are waiting for the opportune moment to make a purchase.
If the downward trajectory persists, we will likely see a surge of homebuyers entering the market. Should interest rates remain moderate or begin to climb, which is unlikely, the market may see a continued slowdown in sales.
Expert Advice to Las Vegas Homebuyers
The slight dip in interest rates has resulted in more sellers stepping into the market. Although this has slightly increased inventory, the situation could shift once the interest rates significantly drop and home buyers flock to the market.
Merri described buying a home now as a sound financial decision, even with the high interest rates. When rates decrease in the future, homeowners can always refinance to take advantage of the lower rates. You can also buy down the rate.
Benefits of Investing in Las Vegas Real Estate
Las Vegas is a prime market whose quality of life is exceptional. While renting is usually convenient, buying is a better long-term financial decision. Additionally, the IRS allows deductions on mortgage interest and property taxes.
Homeownership offers financial security through stable mortgage payments, unlike fluctuating rental payments. Plus, owning a home elevates your social status aside from building generational wealth as property values appreciate over time.
