Redfin has officially published the results from its latest report, which reveals that total number of homes for sale in Las Vegas went up by 31% year-over-year during July.
Going by the available details, this particular report discovered that pending home sales fell 8.6% year over year in July, and closed sales fell 8.5%. Not just that, homes that are selling in Las Vegas were also found to be taking longer to do so than they have in the past. The typical home sold in July took 55 days to go under contract, 16 days longer than a year earlier.
All in all, while overall U.S. housing market has been slow for many months due to high homebuying costs and widespread economic uncertainty, the latest piece of data props up Las Vegas as a leader of this slowdown.
“Las Vegas is feeling the effects of affordability pressures and elevated mortgage rates more acutely than many other markets, partly because the city’s economy is dependent on a slowing tourism industry,” said Chen Zhao, Redfin’s head of economics research. “The resulting pileup of supply paired with slow demand is a tough pill for sellers to swallow, but it’s good news for buyers. With so many homes on the market—and so many sitting for so long—buyers can take their time choosing from a plethora of options, and they may be able to negotiate prices down.”
Talk about the whole report on a slightly deeper level, we begin from how it discovered that most homes are unaffordable for Las Vegas locals. This translates to no more than 20% of Las Vegas listings emerging as affordable to a family earning the local median income.
For better understanding, the typical Las Vegas household would need to spend 40% of their income to buy the median-priced home. The stated data can be further contextualized once you consider a home is typically considered affordable only if a household spends no more than 30% of its income on housing.
Next up, Redfin report deemed renting to be a more affordable alternative. In Las Vegas, the median monthly asking rent is $1,586. While that’s up 2.6% from a year ago, it’s much less than the typical mortgage payment.
You see, to purchase the median-priced Las Vegas home at today’s average mortgage rate, a buyer would pay $2,472 per month.
Another detail worth a mention relates to how tourism is also suffering from wider economic uncertainty.
From a statistical standpoint, the number of visitors to Las Vegas dropped 11% year over year in June. This happens to be the case because Americans are spending less money on discretionary things due to tariffs, layoff jitters, and declining consumer confidence. Much of the slowdown in tourism also birthed by a drop-off in Canadian visitors post-tariffs,
Hold on, we still have a couple of bits left to unpack, considering we haven’t yet touched upon the fact that Las Vegas is typically considered a volatile housing market compared to other major metro areas.
We get to say so because the city’s housing market suffered one of its worst crashes during the 2008 financial crisis, whereas it boomed from an influx of Californians moving in during the pandemic. Now, thanks to recent drop offs in tourism, Las Vegas’ housing market is again on a downward trend.
Redfin report also, while preaching renting as a more affordable option, discovered some short-term rental restrictions for owners. These restrictions stem from Las Vegas implementing strict short-term rental rules over the last several years, making it less attractive than it once was to own a rental property in the city.
Despite all the given challenges, though, Cherra Bergman, a Redfin Premier agent in Las Vegas, has observed an uptick in buyers over the last several weeks as mortgage rates have declined.
“Savvy buyers know there are a lot of homes on the market and that they can get a better deal now than two or three years ago. Because some sellers are giving concessions and reducing prices, some buyers are able to get a lower monthly payment than they would have when mortgage rates were higher,” said Bergman.
