When Kharisma Rodriguez considered selling her house, she knew the Las Vegas market was hot. But she didn’t realize the extent of the frenzy.
An offer came in within hours of her home in the Southern Valley in February, she recalled. The listing didn’t even have photos.
Despite the battered economy, the Las Vegas real estate market is in full swing. Homes are selling fast, prices are at record highs, and many buyers are paying in cash.
Meanwhile, builders regularly raise prices, put buyers on waiting lists, take bids for tickets, and in some cases even hold lotteries, according to multiple sources.
When Matthew Addison mentioned to a neighbor a few months ago that he was thinking of selling his house in northwest Las Vegas, the neighbor replied that he knew someone who was looking for a place. Addison recalled the friend calling the next day and soon hitting a deal to buy the house.
“It’s a bit like the toilet paper rush with COVID. … All of them are filling up with real estate, ”said his wife, Kristyl Addison.
In any case, the boom is being fueled in large part by low borrowing costs, as well as a tight supply of homes for sale and an above-average volume of California buyers.
‘Free for all’
Kirby Scofield, owner of Scofield Realty, said his brokerage firm trained clients to act quickly and told them, “We don’t want window shopping.”
Realtor Aldo Martinez, president of the Las Vegas Realtors trade association, said he was always concerned about rapid growth in the real estate market.
In more normal conditions, a home can take months to sell, but buyers are now reaching for homes within days of listing and, according to Martinez, it’s not uncommon for people to pay above asking price.
“If it has a pool, it’s a jack-of-all-trades,” he noted.
Overall, the median sales price of previously owned single-family homes – most of the market – hit a record high of $ 363,000 last month, up nearly 14 percent from March 2020, Las Vegas Realtors reported.
Buyers picked up more than 3,700 single-family homes in March, an increase of 35 percent compared to the same month last year, while at the end of March only around 1,770 such houses were on the market without offers, which corresponds to a decrease of almost 69 percent compared to the previous year, the association said .
With offers flooding in and dwindling supply of homes, competition to buy a place is fierce.
“It’s harder than ever,” said Randy Hatada, owner of Xpand Realty & Property Management.
Southern Nevada has long been a popular place for people looking to move. But with offices closed and many people working from home amid the pandemic, out-of-state shoppers seem to be more active than usual in Las Vegas, which has larger and cheaper homes than Los Angeles or the Bay Area, for example.
Rodriguez, the youngest saleswoman, said she was looking at a house for sale in the Spring Valley area and a number of people were waiting to get inside. Some would have looked over the walls and looked through the windows.
“Every single car that was waiting had a California license plate,” she recalled.
‘It’s crazy’
The real estate market in southern Nevada was initially hit by turbulence when the coronavirus outbreak triggered widespread business closings and other chaos last March.
The home sales pipeline quickly shrank after Nevada’s casinos shut down and Las Vegas’ main financial engine, tourism, effectively shut down. Resorts and other businesses later reopened, despite the fact that Las Vegas’ tourism-dependent economy was among the hardest hit in the nation during the pandemic.
However, the real estate market found its way back to where it was and began its hot phase, which had now lasted for months, when people – at least those who could still afford to buy a place – seized the chance for rock-bottom mortgage rates and were able to lower their monthly payments and stretch theirs Budgets.
Bobbie Starr Dust, an agent at Berkshire Hathaway HomeServices Nevada Properties, said people “fall for themselves to buy a home”. There is a surge in California cash buyers in Las Vegas, many sellers have multiple listings, and if a buyer wants to think about a home overnight, it will be gone, she said.
She recently listed a house in the Northwest Valley that received a cash offer on day one that is nowhere to be seen.
“It’s crazy,” she said.
Realty One Group’s agent Michelle Hardy-Rodriguez said that some buyers are bidding on multiple homes at the same time, which she doesn’t recommend considering what could happen if more than one seller says yes.
“As an agent, you shouldn’t let your customers do that,” she said. “But it happens.”
House lotteries
In the midst of the scarce supply of resales, many buyers are trying to get a home from a contractor, but that may not be an easy task today.
According to several real estate professionals, builders around the valley are putting buyers on waiting lists. When builders post a new set of sites, buyers may be notified in the order they signed up while some are asked to bid.
Klif Andrews, Las Vegas division president for contractor Tri Pointe Homes, said 20-25 percent of its sales are cash, up from the usual 10-20 percent, and most of its subdivisions in the valley have waiting lists.
His company began creating waiting lists for particularly busy projects in January, around the same time as other builders, according to Andrews.
“You could only say that demand was ahead of supply,” he said.
Across southern Nevada, home builders generated more than 11,000 net sales in the past year – newly signed sales contracts minus cancellations – the most since 2007, according to Home Builders Research.
Several real estate sources also said they knew about a developer in the valley who holds lotteries, KB Home.
Scofield Realty agent Gustavo Lopez said he participated in KB lotteries and was able to secure home locations for his clients. He said he calls the contractor at least once a week to find out when the next drawing will be and that he is arriving “super early” to put in his name on behalf of his clients.
He has run lotteries in person and through Zoom, with a KB representative pulling names out of a hat or bowl.
In a statement to the Review Journal, KB Home spokesman Craig LeMessurier cited the “extremely dynamic housing market in the Las Vegas area” and said that in some communities where less land is available and “demand far exceeds supply, sometimes hold drawings to select a buyer from the prospects as we believe it is a fair and equitable course of action. “
“We take this selection approach on a case-by-case basis and only when the number of potential buyers significantly exceeds our supply of available homes in this community,” he added.
“Comstock Lode”
Overall, the housing frenzy bears some resemblance to the doomed mid-2000s Las Vegas real estate bubble that locals often don’t want to repeat as it ended with sweeping foreclosures, falling property values, and abandoned construction sites.
Home prices are back to record levels, buyers don’t seem to be getting enough homes, and as developer Wayne Laska, owner of StoryBook Homes, noted, lotteries were common during bubble days.
Gail Payonk, sales and marketing director at StoryBook, said home builders allowing sealed listings on certain homes are reminiscent of the years before the crash.
“It gives you a little bit of the chill,” she said.
There are also major differences between then and now. During the boom days, sloppy mortgage lending made virtually everyone buy a home, if not several, and fins and other investors flocked to homes.
Credit requirements are much stricter today than they were before the crash, and the type of buyers who helped inflate the bubble in the mid-2000s doesn’t seem to exist.
Still, the market is showing no signs of cooling.
Matthew Addison, who sold his home in the Northwest Valley because he and his wife wanted a smaller home with an RV garage, said he expected it would take at least three to four months to find a buyer without believing they were would land one without trying.
It also took them months to reserve a lot with a contractor for their new space because the developer was selling so quickly.
“It’s the damn Comstock Lode in real estate out here,” said Matthew Addison.
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter. Review Journal contributor Subrina Hudson contributed to this report.
