Gambling on Las Vegas as a Place to Call Home
While some housing markets in the United States struggle with affordability or even availability, others are flourishing and should continue to do so through at least 2024, if not longer.
Take the Las Vegas-Henderson-Paradise market for example. That’s right, people are gambling on this market now rather than just identifying it as a vacation spot or a transient town – a reputation the market has been trying to shed for some time.
It, along with several other markets that are doing well, should all outperform initial projections for that market over the next three to five years, according to a study released in December by the National Association of REALTORS® (NAR).
“Some markets are clearly positioned for exceptional longer-term performance due to their relative housing affordability combined with solid local economic expansion,” said NAR’s Chief Economist Lawrence Yun. “Drawing new residents from other states will also further stimulate housing demand in these markets, but this will create upward price pressures as well, especially if demand is not met by increasing supply.”
The 10 most notable markets expected to outperform projections also included Charleston, S.C., Charlotte, Colorado Springs, Colo., Columbus, Ohio, Dallas-Fort Worth in Texas, Fort Collins, Colo., Ogden, Utah, Raleigh-Durham-Chapel Hill in North Carolina and Tampa-St. Petersburg in Florida.
There were a number of factors that made these markets project to be the hottest as far as real estate over the next half-decade, including job growth compared to the national average, housing affordability, the structure of the age population, their attractiveness to retirees, how likely they are to attract new residents from out of the area and also the appreciation of home prices over time.
“Potential buyers in these markets will find conditions especially favorable to purchase a home going into the next decade,” said NAR President Vince Malta, a broker at Malta & Co., Inc., in San Francisco. “The dream of owning a home appears even more attainable for those who move to or are currently living in these markets.”
Job growth is the primary factor driving up prices in the Las Vegas market. It has seen a jobs boost of nearly three percent in the last three years, almost doubling the national average of 1.6 percent.
About 16 percent of the total population in Las Vegas-Henderson-Paradise (approximately 363,000 people) moved into the area recently, and 71 percent of those are renters.
However, more than a third (34 percent) of those recently moved renters can afford to buy a home at the median price of $291,600 assuming a 20 percent down payment. The median income of individuals who have recently moved to Las Vegas-Henderson-Paradise is $46,500, which would also indicate those looking for workforce housing (middle-income earners) are finding what they need in this market.
The median age of these folks moving to the area is 32 years old and 47 percent of them are single individuals, meaning they might be looking for an opportunity to settle down in their new careers. The average length of time for people to own a home in Las Vegas-Henderson-Paradise is seven years.
Most people who are moving into the market are coming from out of state, making it a true destination location for folks looking to jump start their careers or find a place to put down familial roots.
In fact, the nine largest areas that people come from to move into this market are from outside Nevada. Only Reno cracks the top 10, and it comes in at No. 10.
The largest influx of migrators comes from Southern California (Los Angeles-Long Beach-Anaheim).
In addition, there are notably significant numbers of people coming from other California locations such as San Francisco and San Diego as well as the New York, Chicago, Phoenix, Denver and Honolulu markets, suggesting that people are on the hunt for better opportunities away from some of the larger markets in the country that also face affordability and availability concerns.