The future of the Las Vegas housing market is riding a hot streak of record prices and rising sales despite the bleak economy. Many experts have predicted that the Las Vegas real estate market will crash as it did during the Great Recession. On the contradictory, by the end of the year 2020, the Southern Nevada housing market was in the midst of a real estate boom. Even during these tough times, the Las Vegas real estate properties are still selling at record prices. The Las Vegas market has been making headlines during the Covid-19 pandemic. But it is not for the reasons you might expect, but it is due to the bursting housing bubble or a full-blown housing market crash.
Reasons why the Las Vegas real estate market is so hot
Some of the reasons why the Las Vegas real estate market is so hot are such as –
Low supply
One of the main issues present in the real estate market for the past few decades is the low supply. People are not selling their homes and new constructions are hard to come by. Construction companies still exist, but their building rates have fiercely slowed. They are also looking for profitable opportunities, which do not always align with buyer interest. As any basic economics student can tell you, a low supply will lead to higher prices of the real estate property, if demand is consistent. Accordingly, with a swarm of eager real estate buyers and a limited number of homes for sale, prices are driven up.
Limited land
Why do not people simply invest in new construction if they are concerned about the rising prices of existing real estate? The basic answer is that there is a finite amount of land. Las Vegas itself is so large if you want to build any real estate property there. You will either have to tear down a real estate property that already exists or you will have to move further outside the city, which not many people are willing to do. This may reduce the available opportunity for people who want to buy homes in the Las Vegas real estate market, driving up the prices of real estate properties further.
Increased mobility
The Covid-19 pandemic has also allowed millions of people the convenience to work from home, in some cases permanently. Because of this, people can now live wherever they want to disregard where they work. This increased mobility has led people to seek out real estate homes in areas that were previously inaccessible to them.
Low mortgage rates
One of the most decisive trends right now is the record low mortgage rates that are available to real estate buyers. Depending on where you live and what your credit score is, you can secure a 30 year fixed rate mortgage for less than 3%. This makes it extremely easy to borrow large sums of money and still incur a low monthly payment. People see the long-term future here, with such a low-interest rate. You can easily buy and manage a rental property for a compelling profit. Or you could sit on the real estate property for many years and capitalize on long-term gains.
Economic disparities
The Covid-19 pandemic has substantially impacted the economy, but it has not impacted everyone the same way. The people hit hardest have been people in lower-income brackets, they have lost jobs and have faced reduced income on already thin earnings. By contrast, many middle-class and upper-class individuals have profited from the Covid-19 pandemic. The latter groups are the ones buying the real estate homes, and they have a lot of money to do it.
Plans for the future
Las Vegas may not be fully open yet, but after the Covid-19 pandemic is over. It is likely to be a developing area where people can associate and party once again. People are looking ahead to it and adapting to be part of the action. Buying a home in or near Las Vegas now, before the coming boom, could put you in a great position.
Increasing buzz
The buzz around Las Vegas real estate market also results in a kind of snowball effect. Lots of people are talking about how hot the real estate market is, which leads more people to investigate the situation. They also want to get convoluted before prices get any steeper. So they drive the prices of real estate property up even further. The excitement grows because excitement is already high, resulting in a feedback loop of rising enthusiasm.
Where does Las Vegas real estate market go from here?
This is a complicated question without a straightforward answer. Even the most experienced and experts in the real estate industry are powerless to predict the future. If interest rates remain low and inventory does not budge, prices could continue to climb well into the future. If there is a sudden turn to an economic recession, prices could begin to unravel. Or things may level out and sustain in the coming months. There is no clear answer because there are too many intersecting factors, and all of them are variable. The next few months could lead to any number of developments for the real estate market.
Conclusion
Ready to start investing in the Las Vegas real estate property? Buying a rental real estate property in the Las Vegas real estate market in 2022 could mean deals and cash flow. Start your search here at Real Estate Diary or you can call us at +1-662-200-5160
