Las Vegas home prices soaring, but still below bubble years

Las Vegas home prices, as buyers and brokers know, are climbing fast, outpacing major markets and sparking affordability concerns around the valley.

But in a sign of just how extreme last decade’s boom and bust was, resale prices still haven’t hit pre-recession peaks, which were reached more than 12 years ago.

The median sales price of previously owned single-family homes, the bulk of the market, was $300,000 last month. That’s more than doubled since hitting bottom in early 2012 at $118,000, but it is still below the boom-era peak of $315,000 in mid-2006, according to the Greater Las Vegas Association of Realtors.

Adjusting for inflation, the market has much more than a $15,000 gap from the previous high. In today’s dollars, the peak resale price was around $390,000.

Southern Nevada’s prices have “made up substantial ground” since the economy crashed, but unlike in Las Vegas, prices in most U.S. markets have surpassed previous peaks to hit new highs, according to Brian Gordon, co-owner of Las Vegas consulting firm Applied Analysis.

Resale prices aren’t the only aspect of the valley’s housing market that remains off from the bubble years.

Homebuilders closed around 10,670 sales in Southern Nevada last year, up from just 3,900 in 2011 after the market collapsed but nowhere near the peak of almost 39,000 sales in 2005 alone, according to Home Builders Research.

When the housing market gains speed, locals often wonder if we’re in, or about to enter, another bubble. It’s a legitimate fear, and there’s no question that things accelerated in 2018.

Sales prices and rental rates rose at some of the fastest clips in the country, builders sold the most homes in more than a decade and fetched record prices, and newly built apartments filled with tenants.

A bubble could always happen again, and it’s tough to forget how the last one — with its bloated property values, rampant construction and widespread house-flipping — led to years of financial misery after it burst, including sweeping foreclosures, plunging home prices and masses of underwater borrowers.

The market has cooled off in recent months, though whether this turns into a full-on crash is anyone’s guess. As it stands, resales are tumbling, the tally of available listings has soared, and there are some signs of cracks in the homebuilding market.

But it is worth noting that, by all accounts, the market’s acceleration of the past year or so was fueled by an expanding population, a growing job market and a low supply of homes for sale, not by sloppy mortgage lending, like it was last decade.

“That’s what led us down that last road,” said Aldo Martinez, a branch manager for Berkshire Hathaway HomeServices. “We can’t forget history.”

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.