Throughout 2021, the Las Vegas real estate market saw an unprecedented rise in home prices, with double-digit increases for the second year in a row.
The median selling price of a single-family home in the Las Vegas area hit a record high of $ 420,000 in November, up 21.7% from the previous year. Meanwhile, Reno’s median selling price hit $ 535,000 this month.
But the new president of the Las Vegas Realtors Association, Brandon Roberts, expects the market to stabilize in the new year.
“I think it’s going to be a strong market. I think it’s good for sellers who are trying to sell at this point. They’re going to get value for a property and be able to cash in some of their equity,” said Roberts. “It’s also good for buyers. Interest rates are low. There are great properties out there. There are new builds online. So there are properties out there and be patient. “
Still, he said homebuyers, realtors and politicians will need to continue to navigate the need for more inventory and more affordable housing.
“When we have a shortage of homes for sale on the market, it obviously drives up prices,” Roberts said. “Which makes affordable housing even harder to find and it’s harder for a lot of people here locally… to afford housing. “
Roberts has worked in the real estate industry for almost 25 years, moving to Las Vegas from Salt Lake City in 2008 and founding his own real estate and property management brokerage in 2013. As of January 2022, he will be president of the Las Vegas Realtors Association, a local business organization representing and serving over 17,000 people working in the real estate industry in southern Nevada.
Roberts spoke with The Independent of Nevada on how the Las Vegas real estate market has changed since the start of the pandemic, what next year may hold for housing, and how rising home prices could shape Las Vegas’ future.
This interview has been edited for clarity and length. Explanations of certain terms or ideas have been added in italics where necessary.
How do you think future development will shape the greater Las Vegas area over the coming year? Are there specific areas where you expect to see more development or where we might expect to see more homes on the market?
We’re seeing a lot more development in the Northwest and even in the North Vegas area. We continue to develop. I think we need it. I think we really have a housing shortage. Hope we will see more growth. I’d also like to see more vertical growth – more skyscrapers or more condo-type projects where you don’t expand the city so much.
What do you think of the need for affordable housing? What challenges does the industry face when building / selling affordable housing versus newer, more luxurious homes?
We need more affordable housing projects. I know there was one that was approved, I believe, off Cactus and between Rainbow and Buffalo, and then we have about 30 affordable apartment complexes, but there aren’t enough. .
The challenge would be when you hear rumors about rent control and stuff like that that can hurt your common retired landlord. I think we need to get some reforms and maybe some incentives for people to build these projects or turn their projects into a little more affordable housing.
Why is it so hard to build affordable housing or find someone affordable?
To build it the land still costs a lot of money, your building materials and time and labor and permits and it all takes a lot of time. And so your costs of owning that land go up. It is therefore expensive to build.
When you spend that money to build it, you want to try and get a return on your investment, and that’s not always the case. [the case] with affordable housing. And then, on the realtor side, there just aren’t many.
What do you think will happen with the housing market in 2022? Do you expect the prices to balance out?
I predict we’re still going to see an increase – not in the double digits like we’ve done the past two years – but maybe a 3-5% increase.
The reason is that we just don’t have the inventory, and supply and demand determine prices (low supply and high demand mean higher prices, high supply and low demand mean lower prices). If interest rates stay low, people’s purchasing power remains strong – they are able to pay more for properties.
Why do we have so much difficulty meeting the demand for housing?
We need more than a million units Across the country. It’s not easy to just throw away a million homes.
But the problem dates back to the Great Recession. To start with, the builders were building a lot of properties, but over the last ten years they had slowed down, but not the population, and so they have to catch up with that, and it’s going to take a little while to do that.
Supply chains, lead time and materials; everything makes it more difficult to satisfy the demand for housing.
From a residential real estate market perspective, what lies ahead for the coming months, say December through March?
I think we’re going to have what we call a “warm winter”. Typically you have a bit of a seasonal change in pricing and maybe inventory as less people can watch, but I think we’re going to stay pretty warm for our season, and we’re still going to see record numbers.
We have seen a record number of sales of luxury homes or homes priced over a million dollars. Do you expect the number of these sales to slow down?
I don’t think it is, because what you get for a million dollars today is not the same as it was five years ago.
And that’s partly because of the overall increase in house prices.
What would you say to people who are worried about a stock market crash similar to the one in 2008? Are we going to another?
Unfortunately, no one has a crystal ball. But I would say I wouldn’t be so scared of what happened in 2008 because of the equity in people’s homes and the way people got their mortgages and bought property.
Back then there were a lot of high risk loans, people basically said what they were doing, bought things that they weren’t entitled to. Nowadays, you have to qualify. You put in the proper documentation showing that you can afford it, and people pay down payments… so I think we’re less likely to see a crash like that.
Can you tell me how the current market compares to the market that led to the housing bubble and recession in 2008? What could be similar? What is different?
Similar would be, you get a price increase, almost this buying frenzy. What’s different is that you don’t have the same amount of build; you don’t have the same number of houses flooding the market. We are running out of stock instead of being oversized.
What would you say to someone about to buy a home right now?
I would say buy a house. If you can buy a house, you are always better off than renting. Rental prices are rising dramatically, and by owning your home, you can somehow control your own destiny and start building equity.
What do you hear from buyers or sellers about the market and where it is heading?
Frustration. Sometimes you have to write a lot of offers to get something accepted. They not only compete with rising prices and other first-time buyers or people who buy in the middle income bracket, but they also compete with a lot of investors who put a lot of marketing into that. , or a lot of cash.
Why do you use the word frustration?
Because you go out and look at houses, you find a house that you like or that you want to buy, and then you put [in] an offer and you don’t get it. You will do it over and over and over again. And it can be frustrating, and a lot of buyers are sidelined by thinking that maybe now is not the right time.
What is the fear of exiting the market?
Rising interest rates and prices. What you could buy a home for today might sound like a lot, but if interest rates change, your payment and what you actually pay for the home over the life of the loan goes up dramatically.
If you buy today at an interest rate of 2-3 percent, what you pay in interest over the life of your loan is much less than, say, if you paid between 3 and 4 percent. And so that means buying a home is costing you more money over time.
How has the pandemic shaped the real estate industry?
When the pandemic started it was not what I expected. In fact, there was a lot of fear going back to 2007, 2008, the market collapsing, all that, but the housing seemed to be in a protective shield, so to speak, as we went through it.
Officers had to adjust to their way of doing business due to the pandemic and people not wanting to go out, but people still had to buy houses. So we saw the increase in Zoom meetings, virtual open houses, virtual tours, a lot of the technology that was already there but was just not being adopted and used a lot by real estate professionals or the industry. industry.
I think our industry could have used this technology, but the pandemic accelerated it.
I think this has affected buyers in a number of ways. Firstly, when you are home, you start to realize that you need more space, or that you want that vacation home, or that you want something in another neighborhood.
Then [with] a lot of people working from home all of a sudden you can go out a bit more on the outskirts because you didn’t have to worry about commute times and stuff. I think it created a great need for a lot of people to upgrade or buy a house.