NV Sellers and Agents Enjoy Record Profits While Buyers Face Uphill Battle
2020 was a banner year for Nevada real estate as the Silver State continued to draw in those relocating amid the pandemic. In fact, for every one person who left Las Vegas, 1.32 moved in. This increased demand has driven up home prices and fundamentally changed the local housing market. We sat down with Stephen Edge, a veteran Las Vegas agent, to discuss the fact that, while local sellers and agents alike benefit from increased home prices, buyers could face an increasingly aggressive market moving forward.
Increased Demand in Nevada
Nevada’s housing market is nothing short of red hot. The state has become a popular destination for pandemic-era relocations, and it’s easy to see why. “A lot of people like going to the casinos… the dining is wonderful, you can literally be skiing up on a mountain top over there in Mesquite and you can come down and go in your boat at Lake Mead,” said Edge. Between hiking, biking, fishing, and gaming, the state has been shortlisted by many working remotely and newly pursuing a higher quality of life.
Industry is also a bright spot in Nevada’s economy. “Amazon is out here, Zappos is doing a lot of things, so you've got a lot of nice infrastructure here in addition to the gaming structure,” said Edge. Between the robust quality of life and promise of industry, it’s no wonder that Nevada is one of the most sought-after destinations for pandemic moves. As it turns out, this influx of transplants has repercussions, both positive and negative, depending on your role in the market.
Rising Home Prices in Nevada
Nevada has long boasted some of the fastest growing median home prices, even before the pandemic. In fact, Edge estimates prices across the state have increased a whopping 133% over the last 10 years. With increased interest thanks to the pandemic, the average home value has increased 8.1% statewide over the past year alone and 7.6% in the Las Vegas metro area specifically. Amid this increased demand and rapidly rising prices, agents and sellers alike have brokered some seriously profitable sales, but buyers are facing an uphill battle.
What Rising Prices and Shrinking Inventory Mean for Nevada
Increased demand and limited supply adds pressure to the market and those looking to operate within it. If you’re working with sellers, clue them in on the intricacies of this very unique market. “It’s a feeding frenzy out there right now, it’s really crazy,” said Edge. “The inventory is just nonexistent at the moment.” This means that sellers may be flooded with multiple offers and can choose the one that most appeals to them, whether that involves a quick closing, high offer, waived contingencies, or just getting the right person into the home. Because prices are so high, you may also want to help your seller differentiate their home by highlighting the very best features to justify the higher price buyers are likely to pay.
On the other hand, if you’re working with buyers, you’ll want to be honest and upfront, tempering expectations as needed. With rising prices, buyers may need to really consider their “wants” versus “needs”, explore neighborhoods that weren’t at the top of their list, or wait to buy entirely. Rising prices mean homeownership is out of reach for many Nevadans as the state retains the nation’s second-highest unemployment rate. “When they started shutting things down here in Vegas, we were up to pretty close to 34% unemployment rate,” said Edge. “The casino industry shut down, everything was closed… The rate’s still a little high, we’re at 11.5% as far as unemployment rates [as of January 2021].”
Even if high unemployment rates haven’t affected your client, limited inventory might. “There’s just not a lot of inventory out there right now. When you have no inventory out there, it’s going to cause prices to run… It’s a seller's market right now,” said Edge.
Either way, Edge has some sage advice for agents finding their footing in this whirlwind of a market: “Be honest, have compassion, and have some level of morals and values… just don't over-promise, under-deliver. Be honest, be true to yourself.” Whether you’re working with buyers, sellers, or just getting your feet wet, make a point to understand and communicate the state of the market to your clients. There may be some challenges in navigating Nevada’s current housing market, but there’s also plenty of potential. “Just be upfront and honest and you'll be fine,” said Edge.
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