Las Vegas is hot and it’s not because of its casinos and vibrant nightlife.
Sin City is the hottest housing market of 2018 based on home price growth. It has become a place where people want to live, not just play. Vegas has benefited from the high cost of homes and generally high cost of living in southern California and other neighboring cities. While Vegas’s home prices have skyrocketed this past year, the southern Nevada city is still among one of the cheaper metropolitan areas to live in the U.S.
“People are coming to Las Vegas. We have been seeing major job creation and diversification in industries,” said Chris Bishop, president of the Greater Las Vegas Association of Realtors. “All those things together led to a perfect storm.”
RELATED: Take a look at the top celeb homes to hit the market in 2018:
Top celeb homes to hit the market in 2018
Top celeb homes to hit the market in 2018
Tiger Woods' ex-wife Elin Nordegren, who was married to the pro golfer for six years, has placed her 11-bedroom Florida mansion on the market for $49.5 million.
An unassuming, Spanish-style residence in the ever-more expensive, boho-chic hills above L.A’s Silver Lake Reservoir, owned via trust by Tinseltown A-lister Leonardo DiCaprio and long occupied by a family member, hit the market at $1.749 million in October.
The star was asking $3.795 million earlier this year for her longtime mansion in the historic Hollywood Dell neighborhood that winds through the foothills between Hollywood and the Hollywood Reservoir.
Just over six months after her Los Angeles residence was busted into by an intruder/stalker, the superstar singer unsurprisingly hoisted the property near the base of Nichols Canyon up for sale at $7.495 million earlier this month.
One of the highest-paid actors on television, with a $20 million annual contract for her long-running role on “Grey’s Anatomy,” sold a 1920s Spanish villa positioned high on an elevated double lot in the historic Whitley Heights neighborhood in the foothills above Hollywood for a tad less than $2.8 million in July.
The politically engaged actor, best known as Kumar in the hilariously low-brow “Harold & Kumar” comedy film franchise, put a mid-century contemporary on a slim cul-de-sac in a particularly celeb-packed pocket of the Hollywood Hills up for sale at a touch under $1.5 million in late August.
(Photo by Noam Galai/Getty Images for Global Citizen)
The 26-year-old singer put her L.A. mansion that she was rushed to the hospital from after overdosing on the market in Sept. The HollywoHillslls abode, which she purchased for $8.3 million in September 2016, is up for sale for $9.495 million.
The low-profile but card-carrying member of the rock ’n’ roll aristocracy sold a vintage Spanish bungalow nestled into a quiet cul-de-sac in the foothills above Hollywood for a bit more than $2.3 million in October.
Blake Masters, the creator of the crime drama "Brotherhood," listed a four-story, mullet-style residence in the hills between L.A.’s Beachwood and Bronson canyons for just under $2.2 million in January.
Having recently completed a carefully considered, comprehensive and no doubt exceedingly costly restoration, update and addition of a swimming pool and guesthouse, the comedian listed an architecturally significant hillside home in the Silver Lake area of Los Angeles with a dead serious asking price of $5.125 million in October.
The actress and talk show host cut her West Coast real estate ties in early 2018, listing her longtime residence in the posh, sea breeze licked Pacific Palisades area of Los Angeles with an asking price of $8.795 million.
Fast on the heels of reports that the actress, one of the stars of the cult favorite 1990s series “Beverly Hills, 90210,” and third husband, Dave Abrams, are headed for divorce court, she’s unsurprisingly listed her custom-renovated residence in L.A.’s less-renowned but still keenly sought-after 91604 zip code in July with an asking price pushing up on $4.5 million.
Since June, Vegas has led the S&P CoreLogic Case-Shiller 20-City Composite, dethroning Seattle as the city with the fastest home price growth. Vegas posted a 13.5% year-over-year increase in September. It, along with Phoenix and Tampa, had the biggest gains and largest losses 10 years ago, according to S&P.
“Vegas has been a boom and bust market,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones. “It was consistently one of the four fastest rising prices cities around and when the crunch came it was one of the cities that went down the most. It seems to be repeating its big swing practice now.”
Home prices are still 20% below its peak, according to Lawrence Yun, chief economist at National Realtors Association. Home prices plunged 62% to its bottom in 2012 from their peak in 2006, according to ATTOM Data Solutions, a real estate tracking firm.
Although prices have been heading upward, buying a home in Vegas is still far cheaper than most parts of southern California. In the third quarter, median home price in Vegas was $294,600, compared with $628,900 in Los Angeles, $830,000 in Orange County-Anaheim and $650,000 in San Diego, according to Yun. Earlier this year, Trulia noted that people living in coastal California markets tend to migrate to Sun Belt areas, namely Vegas. Similarly, Redfin examined searches from more than a million of its users in 90 metro areas and found the top destination for people leaving Los Angeles is Las Vegas.
“There are many people from Southern California who make a day trip and weekend trip,” said Cheryl Young, senior economist at Trulia. “Some may have realized that things are much more affordable in Vegas and consider a permanent move.”
Population and employment growth have fueled home price growth. The metropolitan Vegas area boasts a population of about 2 million — the city is among the fastest-growing U.S. cities. For the past few years, jobs in Las Vegas have increased at about 3% year-over-year, above the national job growth rate.
A hotbed for non-tourist industries
The job creation in recent years is also not necessarily from the usual sources: entertainment, hospitality and mining. While casinos like Wynn Resorts still dominate the Vegas economy (there’s an estimated $15 billion worth of development along the Vegas Strip in the works), the city is also home to online shoe retailer Zappos, which renovated Las Vegas City Hall for its headquarters in 2013. Zappos has been credited for the revitalization of downtown Vegas.
Additionally, Vegas has become a hotbed for professional sports teams and other events. The Raiders are constructing a new $1.9 billion stadium set to be completed by 2020, the same year the city is expected to host the NFL Draft. In 2017, Vegas Golden Knights NHL team was created, and this year the Las Vegas Aces WNBA team and Las Vegas Lights FC soccer team kicked off their inaugural seasons.
“This all added more value to the community,” said Bishop. ”It’s why people love our town.”
Facing similar challenges
Like the rest of the nation, Vegas is dealing with a housing affordability crisis. While jobs are being added, they aren’t well paying jobs. And as home prices rise in the region, wages aren’t catching up. That said, Vegas is still considered a relatively affordable market to buy a home in the U.S.
But in recent weeks, the Vegas housing market reportedly started experiencing a slowdown like the rest of the country. Home prices and sales activity have slipped, and inventory of homes doubled in November from a year earlier. Bishop isn’t too concerned, noting that with 7,000 homes for sale currently, the figure is short of the normal 12,000 homes and a far cry from the days of the housing crash when there were 20,000 homes for sale. “What I see is traditional appreciation and a stable market,” he said.
But some are a little bit more pessimistic and are asking whether the downward trend will continue into 2019. “It’s a gamble,” said Blitzer.