Is Buying A House in Las Vegas A Good Investment? (2024)
*This post contains information from 2023 when the article was written. The findings can help inform homebuyers in 2024.
Prospective homebuyers want to know whether it’s a good idea to buy an investment home in Las Vegas today.
Our answer is generally Yes, although investors may want to wait until the market favors buyers to commit to a purchase.
There is currently a seller’s market in Las Vegas due to the relatively short housing supply.
Side Note: Those who are interested in buying a home to use as a rental property are in a fair position to see a positive cash flow, plus additional value from home appreciation.
Las Vegas’ Growing Population
Las Vegas is a growing city in need of single-family homes, apartments, and office spaces, which is why real estate investments generally remain a smart strategy.
According to Statista, the estimated population of the Las Vegas metro area in 2021 was 2,292,476 people.
Compare this to the 2010 population estimate of 1,952,640 people, and you’re looking at an increase of 339,836 people over an 11-year period.
This represents a sizable market that investors can benefit from.
Las Vegas Housing Appears To Be Stabilizing
Housing demands during the pandemic housing boom led to a very hot market in 2021 and 2022, although home prices cooled somewhat in 2022 due to rising interest rates.
In 2023, we expect the demand for real estate to remain fairly robust, despite the slowdown.
We’d argue that we’re reaching a more stable market at present, which allows for a relatively equal playing field between buyers and sellers.
In the coming year, sellers will have to adjust their prices since there are enough opportunities for buyers to acquire property elsewhere.
We Are Still In A Seller’s Market
At present, Las Vegas has approximately a 4-month supply of available homes.
While this is a much bigger supply than last year, the market still hasn’t transitioned to a buyer’s market yet, which is why investors may want to wait before opening negotiations with sellers.
Housing supplies of more than 6 months are advantageous to buyers since sellers have to compete with other listings. Buyers with numerous options are naturally going to be discriminating.
Investors who are looking to secure excellent deals on homes in Las Vegas may have enough room to negotiate at present, but caution is advised.
Will Las Vegas Housing Prices Go Down?
A 2022 report from Las Vegas Realtors states that, in Southern Nevada, the average December price for an existing single-family home was $425,000.
This price is about the same as it was in 2021, indicating that prices may be reaching a peak.
Stagnating housing prices imply that buyer demand has decreased and the supply of available properties is increasing.
Will Las Vegas Housing Prices Rise?
We don’t believe prices will drop too much—certainly not like what we experienced in 2008. It is actually possible that prices could rise.
If this happens, Millennials will be the cause or at least part of it. This is because Millennials today range from 27 to 42 years of age, which is when most US buyers get homes for the first time.
In 2021, there were an estimated 72 million Millennials in the United States, who made up around 23 percent of the population (Statista).
It’s inevitable that some of this population pool will want to relocate, and Las Vegas presents a viable and appealing option.
Reasons Why People Are Moving To Las Vegas
Cost of Living
While living expenses in Las Vegas are higher than the national average, city residents benefit substantially from Nevada’s tax laws, which do NOT include state income tax.
Las Vegas residents also have low property tax rates and the ability to deduct sales tax payments.
Additionally, only around 40 percent of goods have a sales tax in Las Vegas. Many important products, such as most grocery items, are sales tax exempt.
House Prices
At the end of 2022, the median sale price of an existing home in Las Vegas was $425,000.
By contrast, in the third quarter of 2022, the median price of existing homes in the USA was $392,000 (Statista).
As you can see, Las Vegas does have a higher median housing price compared to the national average, although this difference is partially offset by the tax benefits provided by the state of Nevada.
Job Opportunities and Employment
Nevada is currently experiencing a strong labor market, according to a report by the Nevada Department of Employment, Training, and Rehabilitation (DETR). The report states that Las Vegas added 46,300 jobs from October 2021 to the end of 2022.
Here are some other interesting facts from the Nevada Governor’s Office of Economic Development:
In 2019, Clark County had over 300,000 jobs in the Tourism, Gaming, and Entertainment sector.
State-wide, Casino Hotels comprised approximately 172,000 jobs in 2019, with average earnings of $46,618 per job.
Likewise, in the same year, there were over 100,000 restaurant jobs in the state, with average earnings ranging from $19,579 for limited service to $29,826 for full-service.
Clark County Is Where The Money Is
Bear in mind that the majority of Nevada’s tourism, gaming, and entertainment opportunities are concentrated within Clark County since this is where most of the population lives.
While the figures above apply to the entire state of Nevada, much can be deduced from them.
It’s difficult to overstate the importance of the Las Vegas area. Unlike other states that have more than one major metropolitan area, Las Vegas is the center of commerce in Nevada.
Reno, Sparks, and Carson City certainly do play a part, but they don’t have nearly the same level of economic concentration.
Las Vegas Healthcare Industry
Beyond the tourism, gaming, and entertainment industries, there is also the Las Vegas healthcare industry, which offers substantial employment opportunities.
Medical centers in the Las Vegas area include:
- Valley Hospital Medical Center
- Horizon Specialty Hospital of Las Vegas
- UMC Trauma Center
- UMC Children’s Hospital
- Kindred Hospital Las Vegas – Sahara
- Dignity Health – St. Rose Dominican Hospital
- Sunrise Hospital & Medical Center
- Desert Parkway Behavioral Healthcare Hospital
- Las Vegas Post Acute and Rehabilitation
- St Louis Medical Center
- Henderson Hospital
- Cathedral Rock Medical Center
- Centennial Hills Hospital
- Summerlin Hospital Medical Center
Medical education opportunities are also available, such as the MD program at the Kirk Kerkorian School of Medicine, University of Nevada Las Vegas.
There is also the:
- School of Community Health Sciences at the University of Nevada Las Vegas, which offers training for individuals to become health care managers/administrators and public health practitioners.
- Milan Institute, which offers programs to teach the skills needed to obtain entry-level positions as an administrative medical assistant, aesthetician-esthetician, and more.
Tourism
The tourism, hospitality, and entertainment industries in Las Vegas are gigantic and offer ample employment opportunities.
According to the LVCVA Research Center, 38.9 million people visited Las Vegas in 2022, which might seem high but isn’t unheard of. Similar figures were present in the years immediately preceding the pandemic.
In fact, in 2019, Las Vegas received a mind-blowing 42+ million tourists.
Given that the current population of Las Vegas is around 650,000 and the metro area population is 2,899,000, this is an astounding figure. Approximately 13 times as many people visited the area in one year as live there.
As you can imagine, hotels, casinos, restaurants, entertainment venues, and more are almost always looking for people to hire to keep up with the number of tourists.
Weather and Outdoors Activities
Las Vegas gets 300+ sunny days a year, making it a phenomenal place to enjoy outdoor activities. The good weather is certainly one of the city’s perks.
Water-Based Activities
There’s no doubt that all the sunshine in Las Vegas makes water-based activities popular, especially during the summer.
Incredibly, the city has around 200,000 residential swimming pools, plus several public pool facilities, and of course, the well-known Cowabunga Bay Water Park located in Henderson.
Hiking and Biking
Bike riding and hiking are also quite popular for Las Vegas area residents, especially in the communities near the Red Rock National Conservation Area and the Sloan Canyon National Conservation Area.
Investing In Rental Properties Las Vegas
Las Vegas has a large rental market that continues to see demand for single-family rental homes.
However, before you invest in a rental property, it’s a good idea to speak with a real estate investor who is familiar with Las Vegas property laws. There are some strict rules in place that need a careful hand to navigate.
Why Buy A Rental Property In Las Vegas?
While no investment is guaranteed to provide investors with an ROI, here are some indicators that signal investment potential:
- A low supply of land, housing, and water
- People are still moving to the Las Vegas area and are eager to find housing
- Rental prices and rental applications are skyrocketing
These three facts put investors and landlords in an advantageous position inasmuch as it gives them options and flexibility when it comes to rental pricing.
Having the ability to pick and choose your tenants and adjust your pricing is critical to achieving a positive cash flow. Good tenants also reduce headaches.
Furthermore, supply and demand are likely to lead to price appreciation.
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