Given our reliance on tourists who come here to eat, drink, gamble, and party, Las Vegas’ economy has long been subject to extreme ups and downs.
But across the valley, in the land of sticks and red-tiled stucco, the Las Vegas real estate market has shown it can be just as volatile.
Home prices in southern Nevada have skyrocketed over the past two decades: the market is flooring, slowing down and repeating itself.
It has accelerated further over the past year with rapid sales and record prices, in large part thanks to cheap borrowing costs which have allowed buyers to stretch their budgets. Las Vegas isn’t alone – house prices have gone up across the country as well.
But southern Nevada home values ââhave skyrocketed faster in the past than they are today, and at a much faster rate than the national average. After the economy collapsed a decade ago, house prices here have also fallen faster than the United States as a whole.
Lately, our frenzy has largely resembled that of other cities, marked by tight stocks, multiple bids, and sellers firmly under control as people try to buy a seat amid historically low interest rates. .
According to the S&P CoreLogic Case-Shiller Index released this week, house prices in southern Nevada rose 23.8% year-on-year in August, compared to a nationwide jump of 19.8%.
In August 2020, house prices at the local level rose 4.7% from the previous year, while they rose 5.8% nationally, according to the index.
In the mid-2000s, Las Vegas was the zero point of the US housing bubble, with lenders providing mortgages to virtually anyone. Builders developed waves of subdivisions in the valley, investors drew up plans for many condo towers, and house overthrow was an easy source of money.
Overall, home prices in Las Vegas in September 2004 were up 53% from the previous year. Nationally, annual price growth reached 14.5% in September 2005, according to the Case-Shiller Index.
When the bubble burst and the economy got a facelift, few areas were hit as hard as southern Nevada. Job losses skyrocketed, property values ââplummeted, construction largely came to a halt, and the valley was littered with abandoned and partially constructed projects.
Many people across the valley have also lost their homes to foreclosure, which has created a widespread squatter problem.
By the end of 2008, home prices in Las Vegas had fallen almost 33% from the previous year. Nationally, the fall in prices peaked in early 2009, at nearly 13%.
The Las Vegas market rose again in 2013, with bargain-hunting investors buying cheap homes wholesale and turning them into rentals. Considering the severity of the crash here, there was no shortage of supply and prices accelerated further, albeit this time out of the gutter.
By the summer of 2013, home prices in Las Vegas had climbed 29% from the previous year, up from a 10% nationwide jump at the time, according to Case-Shiller.
Housing is a cyclical industry, subject to ups and downs, but the Las Vegas market has been more volatile than most. It has a transient population and always seems to attract foreign investors, and there is still a lot of land to build.
Plus, in its essence, buying real estate can be a type of game: you bet that a property is going to rise in value, and at some point you can cash it in.
Some win big and some get eliminated. What could be more Vegas than that?