Californians with higher incomes beating out Nevadans for homes, report says
Californians moving to Nevada earn about a third more than in-state residents who didn’t move, according to a new study by UNLV.
So it’s pretty clear the data shows the Silver State can’t compete with the Golden State’s purchasing power, said Nicholas Irwin, the study’s author and research director for UNLV’s Lied Center for Real Estate.
“At a state-level, California is the largest state from which new Nevada residents originate, with two out of every five new residents from our western neighbor,” he said. “Former Californian households are much wealthier on average than nonmoving Nevada residents by 32.7 percent.”
A Las Vegas Review-Journal investigation found that nearly 158,000 people have relocated to Nevada from California from 2020 though 2023, making up 43 percent of all new residents to the Silver State during the past four years, according to data from the Nevada Department of Motor Vehicles.
Large wealth gap in movers
The UNLV study, which analyzed IRS tax return data, found that the average income level of a California resident who did move to Nevada is approximately 93.1 percent higher than an in-state resident who bought a home in the same year. Irwin said this means California residents have supreme purchasing power when it comes to Nevada’s residential real estate market and can easily outbid them for homes.
“Given the large gap in wealth between recent arrivals and current Nevada residents, current residents may be outspent by recent arrivals, which may exacerbate statewide housing affordability and availability issues,” he said.
The median price for a house in Las Vegas currently sits at $433,975, according to Redfin, and the average home price in Los Angeles, the city that makes up most of the migrants to the valley, is $1 million. The median Nevada household makes $76,364 while the median Californian household income is $91,905.
Las Vegas finds itself in the middle of a housing crisis as home prices are close to setting a record high that was previously set in 2022. This has been compounded by a lack of land to develop as the federal government controls approximately 88 percent of the land in Clark County and has been slow to release it.
On top of this, is a macroeconomic climate that has created what analysts are calling a locking phenomenon where many homeowners got into the market when interest rates bottomed out at the start of the pandemic, but now can’t move because their mortgage payment would be too high.
“I would say probably the single biggest factor that’s impacting everything and the housing market in general is high interest rates,” Irwin said. “We have a lot of people right now who have that classic housing misallocation, we have a lot of folks who would like to move, maybe their family circumstances have changed or they want a bigger house or smaller house but they just can’t move because they would end up paying an extra $1,000 a month. Nobody wants to give up a 2.5 (mortgage) interest rate for say 6.5.”
The valley’s housing market has seen a flood of new listings coming onto the market as it leads the country regarding that metric, however this has not translated into higher sales as prices remain elevated and homes are sitting without offers.
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.
