$1B in homes: Las Vegas leads nation in investor purchases of homes

The valley posted a 27.9 percent increase from the second quarter, the biggest jump of any metro in the country, according to the study. This was higher than Seattle (21.8 percent) and San Jose, California (19.5 percent).

A UNLV study from 2023 found that corporate investors own approximately 15 percent of Clark County’s housing stock, a figure than has likely risen since this year. The study, which was conducted by UNLV’s Lied Center for Real Estate, found that investors already own approximately 25 percent of North Las Vegas, specifically.

Investors purchased approximately $1.02 billion worth of homes in the third quarter in the valley, according to Redfin, and the average price of a house they bought was $420,000.

Investor purchases across the country have “plateaued,” according to Redfin as they purchased 2.3 percent fewer homes this quarter, down from an all-time high at the start of the pandemic.

Redfin data journalist Dana Anderson said investors usually target a specific type of home to buy.

“Low-priced homes are appealing to investors mainly because they cost less,” she said in the Redfin report. “Because of their relatively low price, investors who buy them have a bigger pool of buyers if they’re looking to re-sell, and a bigger pool of renters if they’re looking to become a landlord.”

Anderson added the leveling off of investor purchases is interesting given the roller coaster ride the entire housing market has been on since the start of the pandemic, noting that it’s “harder for investors to buy homes then sell them for a big profit than it was during the pandemic because home prices and loan costs are high.”

Despite two interest rate cuts this year, mortgage rates, which are tied to the treasury bond market, sit at approximately 6.7 percent for a 30-year fixed rate, according to Redfin. Anderson said the housing market appears to be returning to its pre-pandemic norms finally.

“The small size of the change is notable because it comes after four years of huge swings driven by the wild pandemic-era housing market,” she said in the report. “For instance, investor purchases surged as much as 144 percent year over year in 2021, then dropped as much as 47 percent last year.”

Redfin defines an investor as any purchasing entity that ends in following keywords: LLC, Inc, Trust, Corp, Homes.

Las Vegas does, however, have one of the smallest investor capital gains for home sales, according to Redfin. Las Vegas ranked second in the nation (34 percent) behind Phoenix at 32 percent. In contrast, investors made approximately 135 percent in gains in Detroit in the third quarter. In roughly half of the metros in the country, investor median capital gains declined year over year.

Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.