Increasing Home Prices, Historically Low Interest Rates, and a Shortage of Developable Property are Driving Up Land Prices in Southern Nevada
Last year, median home prices for a new detached home in Las Vegas increased 18% to $469,772, while the median prices for a new attached home increased 25% to $350,428.1
New home sales are increasing too. Nevada ranked 3rd in the nation in population growth. New residents migrated from California, Florida, Washington, and Texas where residential real estate prices remain significantly higher than the prices in Clark County.2 This favorable dislocation in real estate prices favors incoming residents because it drives expedient residential purchases.
Southern Nevada’s existing residents enjoyed the highest employment growth rates in America last year.3 Tourism rebounded, and local economy benefited. Residential home buyers took advantage of historically low interest rates and the demand for new residential properties increased by 27.3% year-over-year (annualized at the rate of 16,786 units).4
There is a Shortage of Developable Land In Las Vegas
Right now, there are less than 8,500 vacant developable lots available in the Las Vegas market. This is less than an 8-month supply of property – which is down almost 30% from last year.5
Interest Rates Are Likely to Rise This Year – Making Home Loans More Expensive
The consensus of the informed opinions we follow suggests that the Federal Reserve will raise interest rates 3 – 4 times in 2022. The Feds’ action is an effort to stem inflation and accelerate the stimulus wind down.6 If this occurs, then home loans will be more expensive and more difficult to acquire.
In our view, this will slow down residential consumption in the intermediate term (6 – 12 months) and decelerate the builders’
appetite for land in 2023.
In the Short-term it’s a Sellers’ Market
The current real estate market is cresting in Southern Nevada. Taken together, increased migration, a strong local economy, favorable interest rates and a shortage in the supply of developable land, translates into a short-term sellers’ advantage.
Sunbelt Development & Realty Partners Can Help Maximize the Value of Your Property
We specialize in raw land development and brokerage in Southern Nevada.
We have been in the land development business for more than 30 years. During this period we brokered, sold, and own more than 10,000 acres valued at more than $2 billion. Our investment partners and clients include some of the largest builders in America. KB Homes, Lennar, Richmond American, Beazer and Tri Pointe are among the brands we work with.
We welcome the opportunity to provide you with a complimentary brokerage price opinion. This is an independent assessment intended to help you objectively assess the value of your property.
You may reach us at 702.365.5312 or [email protected]
Notes
1 Market Report, Las Vegas-Henderson-Paradise, NV CBSA, by Zonda, Feb. 28, 2022
2,3 Southern Nevada’s Economic Forecast, For Las Vegas Global Economic Alliance, by Applied Analysis, Nov. 9, 2021
4,5 Market Report, Las Vegas-Henderson-Paradise, NV CBSA, by Zonda, Feb. 28, 2022
6 Fed Officials Project Three Interest Rate Rises in 2022 and Accelerate Stimulus Wind-Down, The Wall Street Journal, by Nick Timiraos, Dec. 15, 2021 https://www.lasvegasrealtor.com/housing-market-statistics https://www.wsj.com/articles/fed-officials-project-three-rate-rises-next-year-and-accelerate-wind-down-of-stimulus-11639594785