Location: Las Vegas Real Estate
A Historical look at Las Vegas Real
Estate [1989-2005]
We became Las Vegas realtors in 1989, and soon after that the Mirage started
construction and that started a golden age in both the Las Vegas casinos and
for the Las Vegas real estate community and the Henderson real estate community.
As each casino was constructed, first the Mirage, and then Excalibur, MGM,
Luxor, New York-New York, Rio, Bellagio, Aladdin, and Venetian, among others,
jobs, in some cases 10's of thousands of new jobs were created in the community.
This resulted in about 6000 to 7000 people a month moving into town and it
was a great time for Las Vegas real estate. The new home builders had acquired
land at very reasonable prices and continue to sell houses at what now looks
like very, very inexpensive prices.
People were flocking to purchase the new homes available in within the newly
developed Las Vegas real estate. The newcomers that were coming from the East
to retire in Nevada , or to work in Nevada , were buying new Las Vegas homes
because in many cases they were 50 or 60 years newer than the homes they were
moving from. California people were buying new Las Vegas homes because they
couldn't believe the prices of Las Vegas real estate compared with the homes
in California . Locals were buying new Las Vegas homes because when they looked
at the lower interest rates [at the beginning of the 90's interest rates around
7%-8% and compared to the double digit interest rates which they might have
had on their homes], they could take their equity and buy a new Las Vegas home
and in most cases, larger, and in many cases, in better Las Vegas areas, than
their existing homes and have lower payments.
Resale home prices were kept down, in general, because of the prices of the
new houses. People, when given a choice, would buy a new house over a resale. A
lot of locals who were moving into new houses would keep their current houses
as a rental property. And the rents were very fair and landlords were making
out very well at the time. Las Vegas real estate never had a period like the
California real estae market or a California roller coaster market with the
prices going way up and then way down. Las Vegas real estate did have a few
years in the mid 90's, where the real estate market was flat over the period
of 2-3 years. There certainly were probably months and areas where the prices
of Las Vegas real estate actually went down. But by and large, it was a gently
rising real estate market, probably going up at about a 5% rate for more than
a decade. Then a couple of events caused things in the Las Vegas real estate
market to change.
The first thing that caused change in the Las Vegas real estate market
was September 11th. By most peoples estimates, September 11th slowed
the Las Vegas real estate market by 80 to 90% in numbers of homes sold
over the following 6 months. That was the first change faced by those
within the Las Vegas real estate market. The interesting thing is that September
11th didn't have any affect on real estate and home prices. The Las Vegas
houses that were sold, were selling at roughly the same price that they
would have sold for previous to September 11th. No great increase, no
great decrease and there was no real panic experienced in the Las Vegas
real estate market. The market just slowed down, took a deep breath,
people just wanted to see where they were going.
In about February of 2002, the Las Vegas real estate industry picked up and
the phones started to ring again. Some of the first people calling were those
who had purchased their Las Vegas houses to over over the previous 2-3 years.
They were looking to move back to their former areas. Consolidation with family
seemed to be an important consideration. A lot of these people had moved to
Las Vegas either for a new job or to retire and it was easier for them to move
back to their former areas to be with families than it was to bring the family
out to them. Las Vegas real estate, over the next year and a half, until mid
2003, continued to gain momentum, with some price increases, probably a little
bit more than there had been in the annual appreciation in the previous decade.
But not anything dramatic. Just a good healthy market. In the middle of 2003,
late summer, the Las Vegas real estate market started to change again.
It seemed as though most people were getting involved in Las Vegas real estate
because they were dissatisfied with their returns in the stock market. There
were a lot of seminars going around the country saying that people should get
out of the stock market and look into real estate, and where people should
look into real estate were the Sunbelt areas where the baby boomers were going
to be retiring. And within the Sunbelt area, probably one of the best areas
to look at, was Las Vegas and Henderson, because the Las Vegas real estate
and Henderson real estate was much cheaper than homes in California, and homes
on the Gulf Coast of Florida. It was really an undervalued market. And so the
investors moved into the Las Vegas real estate market. And at the time the
new home builders were happy to see investors, and were happy to sell as many
homes to the investors as the investors wanted to buy - and the investors did
buy. In the fall of 2003 and early winter of 2004, the investors essentially
bought up almost every single new home that was available within the Las Vegas
real estate market.
Historically, throughout the 90's and the early 2000's, if you went to a new
home tract, you might get lucky and might find a house that is standing inventory,
ready for a 30-day move in, either because the builder was a little bit slow
or something had just fallen through. You might find 2 or 3 other houses in
construction that were ready to move in within 60 to 120 days, and you might
find a bunch of others that were ready in 6 months and over that they were
just going to build out. By late 2003, when you walked into the Las Vegas real
estate market, you put your name on the bottom of the list, and watched the
prices go up as your name rose on the list. In many Las Vegas communities,
there were 200 - 300 names on the list and they were selling 8 houses, maybe
12 houses a month, and the prices went up $5,000 to $10,000, whatever the builder
felt comfortable with, per release. This had a residual effect on Las Vegas
real estate. If somebody was coming into town to live here and they wanted
to move into a house, most people did not want to wait for months and months
for them to get to the top of the new house list and then not know what the
price is until they got there, and then wait for it to be built. So, there
were still 6000 or 7,000 people a month moving into Las Vegas and if they wanted
to move into a house, most people would not wait for the new houses. They had
to buy resale houses. This was the single biggest factor causing the resale
house market in Las Vegas to take off. Many economists felt that the period
of time in Las Vegas between approximately October, 2003 and June of 2004 was
not only the strongest sellers market in Nevada history or Las Vegas history,
but it was the strongest and most unusual sellers market in the history of
real estate anywhere in the United States . A good number to use is that the
average Las Vegas house went up about 50% during that time period. Just to
use different slants on that, the Las Vegas real estate market has experienced
anything from about 40% to about 55-60%. But if you just said the houses went
up 50% during that time period, it's a pretty good guess. All of a sudden,
in the early summer of 2004, the Las Vegas real estate market changed again.
Following this change, investors (who were still the majority of buyers) in the Las Vegas real estate, started been putting their Las Vegas houses back on the market, either as rentals or to try to re-sell right away. However; at that time the amount of rentals that were available was causing a rental surplus and it was very difficult to rent out a property. Investors stopped buying houses around June or July 2004, leaving the Las Vegas real estate market will a lot of catching up to do. To this day the amount of Las Vegas real estate buyers still remains low, and the market didn't go down in price or change at all through the rest of 2004 and through most of 2005. Currently in late 2005, we are feeling a little bit of a change in the Las Vegas real estate market and will continue part 2 of this article which will be called the current Las Vegas real estate market.
Additional Las Vegas Real Estate Article
THE LAS VEGAS REAL ESTATE AND HENDERSON REAL ESTATE MARKET IN LATE 2005