Las Vegas housing market ‘going nuts’ despite pandemic

In the summer of 1909, not long after a land auction got Las Vegas started, a businessman announced plans for a housing development in the tiny railroad town.

The project called for 40 concrete-block homes, but the developer hoped others would build too, noting the growing area needed far more houses than his company set out to construct.

“Vegas should get busy and build houses – just as many as possible – and then we will find that we have not enough to accommodate all our new population,” the Las Vegas Age newspaper declared.

Today, Southern Nevada’s housing market is again seeing increased activity — albeit under drastically different, and wholly unexpected, circumstances.

Las Vegas house prices are on a monthslong streak of record highs, and homebuilders have ramped up construction plans, all while the broader economy limps along, having been pummeled by the coronavirus outbreak.

At first glance, this makes no sense. How could the housing market heat up with frenzied sales activity and rising prices amid a public health crisis that has crippled tourism, the bedrock of Las Vegas’ economy, and put masses of people here out of work?

The answer: cheap money.

By all accounts, record-low mortgage rates have provided much of the fuel by letting people – at least those who are still working or otherwise have strong finances – lock in lower, more affordable monthly payments.

Nationally, the average rate on a 30-year home loan last month was 2.83 percent, down from 3.69 percent a year earlier, according to mortgage-finance giant Freddie Mac.

Overall, rates have tumbled to “unheard-of” levels, Frank Nothaft, chief economist at housing tracker CoreLogic, told me Friday.

Buoyed by shrunken borrowing costs, Las Vegas’ housing market has reached new heights multiple times during the pandemic.

The median sales price of previously owned single-family homes — the bulk of the market — set a record for the fifth consecutive month in October, at $340,200, up nearly 11 percent year over year, trade association Las Vegas Realtors reported.

Buyers picked up 3,225 houses last month, up 11 percent from October 2019 as well, according to LVR, which pulls data from its resale-heavy listing service.

Despite all that, Southern Nevada’s broader economy is in rough shape, with monthly visitor totals and gambling revenue far below year-ago levels.

All told, an estimated 14.8 percent of the Las Vegas-area workforce was unemployed in September, highest in the nation among large metro areas, federal data shows.

Still, homeowners are fielding multiple offers after they list their place for sale, and quickly striking deals.

Josh Line, a 40-year-old headshot photographer in Las Vegas, put his house on the market this summer. He and his wife had another child and wanted a bigger home, and interest rates were “super low,” he said.

Their house was listed for sale on a Friday, and they went under contract with a buyer on Monday, he recalled.

His impression of the market?

“It was going nuts,” he said. “Everything was moving so quickly.”

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