‘Now a full-price offer is a weak offer’: Las Vegas housing a seller’s market

Jordan Rodriguez had been looking to buy a new house in Las Vegas, and with the market in a feeding frenzy, he put his place up for sale less than a month ago.

Rodriguez, a 26-year-old salesman at a Mercedes-Benz dealership, got multiple offers right away for the two-story house and soon went under contract with a buyer.

He had purchased the southwest valley home from a builder in 2016 for nearly $293,000 — and, he says, is now selling it for $560,000, $10,000 over the asking price.

“I feel pretty happy,” Rodriguez said.

He’s not the only one. Homeowners are cashing in on Southern Nevada’s housing craze, often selling for above the asking price and sometimes fetching substantially more than they paid just a few years ago.

Of course, many sellers face the question of where they will move next, as fast-climbing prices and legions of house hunters are making it difficult to afford or even find another home in Southern Nevada.

But the buying binge has put sellers firmly in control, letting them unload their house in days for top dollar as available inventory plunges and as the accelerating market reaches its fastest pace in years.

“Now a full-price offer is a weak offer,” Urban Nest Realty agent Christina Chipman said.

Extreme seller’s market

Despite the badly bruised economy, Las Vegas’ housing market has been heating up for months, thanks largely to cheap borrowing costs that have let buyers lock in lower monthly payments and stretch their budgets.

Houses are fielding a barrage of bids, with some getting lines of people outside to see them, and buyers are routinely paying over the asking price, brokers and agents say.

Realty One Group agent Ryan Buttle said he held an open house in Mountain’s Edge that drew so many people that local security did crowd control.

The home, which traded for $275,000 in 2019, recently sold for $325,000, more than $10,000 above the asking price.

“It is an extreme seller’s market,” said agent Frank Napoli of Berkshire Hathaway HomeServices Nevada Properties, who recently put a $7 million home on the market and received a full-price offer within three hours.

Lisa Lundt, an agent with Better Homes and Gardens Real Estate Universal, said it’s completely realistic to list a home on a Friday, get 20 offers and sign a sales contract Monday.

Chipman, of Urban Nest, recently listed a house in North Las Vegas for $425,000 — $65,000 above what the owners paid just a year ago — and said it is under contract to sell for “significantly” over the asking price.

“If I don’t have more than one offer on a listing in a weekend, something is wrong,” said Jessica Hallenbeck, an agent with Signature Real Estate Group.

Huntington & Ellis owner Craig Tann said his brokerage firm is getting offers above the asking price on pretty much every house it puts up for sale, noting he listed a house in Summerlin for $649,000 and is selling it for $700,000.

The sellers bought it in 2018 for $556,000.

In more normal times, Tann indicated, it would take 45 to 75 days for that kind of house to land a buyer. Instead, it received 18 offers, all at or above the asking price, within a week of it hitting the market, according to Tann.

As he sees it, homes are selling faster now than they did during Las Vegas’ doomed mid-2000s real estate bubble.

“It feels like the market is moving quicker than ever before,” he said.

Sellers live rent-free

Faced with heavy competition, buyers are sweetening their offers beyond just trying to shell out the most money.

According to multiple brokers and agents, buyers are frequently waiving contingencies, including disregarding the home’s appraisal.

“Buyers are really desperate,” said Randy Hatada, owner of Xpand Realty & Property Management.

As part of their bid, plenty of buyers are letting sellers stay in the home rent-free after the deal closes to give them time to find a new place, real estate pros said. In general, sellers might rent back their house for, say, a month or two if their new one isn’t ready yet. But broker Shane Nguyen, owner of 1st Priority Realty, said he can’t recall seeing rent-free leasebacks in his 24 years of selling homes in Las Vegas until now.

“It’s never been free,” Nguyen said.

Rocco Madsen, who bought his house near the M Resort in 2017 for $465,000, said he loves the home but put it up for sale in March, figuring he would “just gamble and see what happens.”

A parade of would-be buyers came to see it, and the home is selling for just over the $700,000 asking price, he said.

After the sale closes, Madsen said, he will pay rent to the buyers to stay for a while as he waits for his new house.

With the home he’s buying, however, he agreed to let its sellers stay rent-free as their next house gets built.

“I had to make the deal as sweet as possible,” Madsen said.

Fuel on the fire

Southern Nevada’s housing market was initially hit with turbulence when the coronavirus outbreak upended daily life last March, as the pipeline of sales shrank fast.

But the market regained its footing and heated up with record-high prices and rising sales amid rock-bottom mortgage rates. Housing took off despite steep drops in tourism, the backbone of Las Vegas’ casino-heavy economy, and devastating job losses sparked by the pandemic.

Southern Nevada has long been a popular spot for people to move to, though people from California, a big source of newcomers to Las Vegas, seem to be picking up more homes than usual in the valley. The pandemic has left many people working from home without the need for a commute, and buyers can get a bigger house for less money here than in, say, Los Angeles or the Bay Area.

Still, the housing market seems to have reached dizzying speeds lately as vaccines rolled out, the economy regained momentum and daily life began to sort of return to normal.

“It’s like the fuel got thrown onto the flames,” Chipman said.

The median sales price of previously owned single-family homes — the bulk of the market — was a record-high $363,000 in March, up nearly 14 percent from a year earlier, according to trade association Las Vegas Realtors.

Buyers picked up 3,726 houses in March, up 35 percent from the same month last year, and 74 percent of the houses that traded hands in March had been on the market for 30 days or less, compared with 59 percent of sales in March 2020, the association reported.

Only around 1,770 single-family homes were on the market without offers at the end of March, down nearly 69 percent year-over-year.

“The minute we put a listing on, we’re getting calls to get people in the door,” said Realty One’s Buttle, who noted that some of his recent listings had at least 20 offers each, all within a week of hitting the market.

Newly built homes tend to be more expensive than resales, but buyers aren’t finding it easy to get a place at a construction site either. Homebuilders in Southern Nevada are regularly raising prices, putting buyers on waiting lists and taking bids for lots, multiple sources have said.

Feeding frenzy

It’s anyone’s guess when and how Las Vegas’ housing boom will end. Real estate pros have figured increased borrowing costs would let some air out. Interest rates ticked higher the past few months, but they remain historically low, and the market is still gaining speed.

Las Vegas’ tight inventory has been a key reason for the market’s hot streak, as demand has shot past supply. But with prices still rising, it’s unclear whether the shortage of available listings will ease anytime soon.

Keller Williams Realty agent Zach WalkerLieb said people who would normally sell and move to a new place would now enter a “feeding frenzy” and are worried about what they can buy.

Nguyen, of 1st Priority, said it doesn’t make sense for some people to sell even if they would make a lot of money, as they don’t know where they will move next.

Lundt, of Better Homes and Gardens Real Estate, figures her house has climbed in value by tens of thousands of dollars. But amid low supply and rising prices, she hasn’t thought about selling.

“I’m happy,” she said. “Where would I go?”

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