Friday, September 2, 2022 / by Juan Grimaldo
Tracking the housing impact of households moving from pricey coastal markets to boom cities
LaDora Fields became a real estate agent in Las Vegas in January 2020, three months before everything in the U.S. shut down because of the Covid-19 pandemic.
While the state of Nevada recognized real estate as an essential business, many of Fields' earliest transactions didn't make it to closing. So much of Las Vegas' population is comprised of independent contractors, including those who work in the casinos that power Las Vegas' economy, and were losing their jobs — sometimes the morning they were scheduled to close on a home, Fields said.
Like many other real estate agents, business went flat in the spring of 2020 for Fields. Activity started picking back up later that year and, by January 2021, the Las Vegas market had fewer than 1,000 homes on the market.
That same month, Las Vegas ranked No. 3 among major metro areas tracked by Redfin Corp. (Nasdaq: RDFN) attracting out-of-state buyers.
In particular, buyers from California were routinely putting in offers $30,000, $50,000 or more above list price — and in cash.
"A lot of locals got priced out," Fields said.
Specifically, the run-up in home prices from out-of-state households and sheer demand meant buyers who weren't able to close on home purchases at the onset of the pandemic — when housing in Las Vegas was more affordable and less competitive — had trouble reentering the market. That's either pushed those households to outlying towns and cities an hour's drive or so from Las Vegas' commercial district — where many have gone back to work — or to renting a house, frequently with two or three roommates to offset the impact of soaring rental rates.
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Between Dec. 31, 2020, and July 31, 2022, the median home value of Clark County, Nevada, where Las Vegas is located, increased 44.6%, from $313,778 to $453,764, according to Zillow Group Inc. (Nasdaq: ZG) data.
Heading into (and during the first year of) the pandemic, Clark County saw the largest number of out-of-state relocations from a single county — Los Angeles County, California — than any other in the U.S., with 6,856 tax filers moving from Los Angeles to Clark counties in 2019 and 2020, according to an analysis of U.S. Census and Internal Revenue Service data by The Business Journals.
The U.S. housing market has cooled since the frenetic pace seen in 2021 because of surging mortgage rates earlier this year and record home-price appreciation sidelining more buyers.
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Written by Ashley Fahey – Editor, The National Observer: Real Estate Edition.