The COVID-19 pandemic caused havoc to Las Vegas' real estate market, but the city is expected to rebound soon. Las Vegas is one of the world's most beloved vacation spots, heavily dependent on tourism for job creation and local economic stability.
1. Unemployment Rate
The impact of the COVID-19 pandemic on Las Vegas' real estate market was immense. Local economies rely heavily on casinos, hotels, and other tourism industries which were shut down due to infection. This put a severe strain on housing stock and left many homeowners feeling vulnerable and scared.
When large numbers of people lose their jobs, home prices tend to crash as well. That is why it is essential to be aware of the unemployment rate in your area - as it can serve as an excellent indication for how strong the real estate market is. During the COVID-19 pandemic, unemployment in the United States reached an all-time high of 4.9% - a level not seen since 1930s. This was primarily due to disproportionately higher job losses among Black and Latino workers.
According to the Bureau of Labor Statistics, an individual is considered unemployed if they are currently unemployed and unable to find another job. This could occur if you've been laid off, lost your job, or are new to the workforce. These workers are typically classified into groups based on the reason for their unemployment, such as job losers, leavers, reentrants and new entrants. The unemployment rate is calculated using these categories so it can be used to compare the number of unemployed workers across different states and cities.
Southern Nevada boasts a low unemployment rate of only 9%, meaning most residents in the Las Vegas area are employed full time. With an improving economy and more jobs available, demand for homes in Las Vegas should increase. This should give buyers more bargaining power, making it simpler to purchase a property.
Las Vegas' real estate market is expected to remain strong in 2022, driven by a 6% unemployment rate and high buyer demand. This market offers an ideal solution for those seeking an alternative environment than major metropolitan areas in the US; one where people can live safely and affordably.
2. Home Prices
Las Vegas is a beloved destination for partygoers looking to have an enjoyable time. Unfortunately, the COVID-19 pandemic has taken its toll on the city's economy, leading many businesses to close their doors in response. While some businesses have succumbed to the economy's challenges, others have managed to find new ways of remaining successful. The real estate sector is no exception.
Home prices in Las Vegas have remained steady, and the market remains favorable to sellers due to high demand and limited inventory.
Another factor contributing to the rising prices of homes in Las Vegas is the growing work-from-home trend. This movement has had a beneficial effect on the housing market, encouraging more buyers to relocate outside major metropolitan areas and seek out homes that provide them with an enjoyable quality of life.
Despite the ongoing coronavirus pandemic, home prices in Las Vegas continue to rise. According to the Las Vegas Realtors trade group, the median price of a single-family home in the region rose to $330,000 in July. This marks a new all-time record for the city; the previous mark was set back in January 2012.
Due to an uptick in home for sale in Las Vegas Nevada and a decrease in inventory available for purchase, interest rates have fallen, making it more appealing for home buyers. These factors have caused a new surge in luxury homebuyers to flock to Las Vegas, providing much needed revenue to the real estate sector in the city. These homebuyers are known as COVID buyers and they were motivated by the coronavirus pandemic to move closer to home.
These buyers tend to come from California, where the economy has been hit hard by natural disasters and high taxation. Due to these issues, these buyers are willing to pay higher prices for homes in Las Vegas; high-end properties have become particularly popular among this group of purchasers.
3. Rental Rates
During the pandemic, Las Vegas experienced a variety of economic issues. One major one was a decline in tourism and hotel industry revenue; another was an interruption to construction projects and house flipping. Nevertheless, the real estate market has managed to rebound and is once again growing strongly.
Though some may believe the COVID-19 pandemic is only having a temporary impact on Las Vegas real estate markets, experts anticipate long-term effects. This is because Las Vegas relies heavily on hospitality, travel and restaurants for its economic wellbeing; thus, government measures have been put in place to guarantee these industries can reopen in the future.
For instance, the government has banned real estate open houses and evictions are strictly forbidden. Furthermore, new tenants cannot move into rental homes until they pay all of their rent and utilities in full. These factors have caused a shortage of rental units in Las Vegas and caused rent prices to soar. This has resulted in an influx of renters, having an adverse effect on the local real estate market.
However, this trend should begin to slow down in the coming months. According to Susy Vasquez, executive director of Nevada State Apartment Association, rent prices should begin to stabilize by 2022. Another factor contributing to Las Vegas' real estate boom is its welcoming business climate. Businesses are opening their doors at a faster rate than the national average, creating more jobs and encouraging residents to settle here.
This has made the area an attractive option for those seeking a better quality of life, whether they're looking to relocate or just need a change. Not only is the city surrounded by stunning landscapes and famous for its casinos, but there's so much more that residents have to offer.
Las Vegas' real estate market has several positive characteristics, such as a low unemployment rate and high home prices. Furthermore, other sectors in the city are experiencing strong growth which makes its economy more resilient.
4. Demand for Apartments
When the COVID-19 pandemic hit, many Las Vegas residents were worried for their economic future. Tourism - which had been shut down - had been disrupted and businesses were also hit hard, particularly those located along the strip. Casinos and other businesses on the strip suffered particularly. However, demand for apartments has grown as more people relocate to Las Vegas from other states or parts of the US. This explains why apartment prices are now higher than they were a few years ago.
According to the National Apartment Association, Nevada requires 7,000 new apartment units annually in order to keep up with growing demand. As a result, more and more people are exploring apartment communities within this region. One factor affecting apartment prices is the rise of work-from-home activities. This has resulted in an influx of digital nomads and snowbirds who desire to live near outdoor activities and entertainment options.
These people may not be able to afford the purchase of a home in their desired neighborhood, so they are turning towards more budget-friendly rentals. This trend has positive repercussions for the Las Vegas housing market as it helps maintain prices and keeps them under control. Conversely, however, the rising mortgage rates have some homeowners concerned about their ability to finance their homes. This is because the Federal Reserve has been raising interest rates in an effort to combat inflation.
If this trend continues, some people could lose their jobs and home values may decrease. Therefore, it is essential to stay abreast of the real estate market and ensure you make informed decisions based on current conditions. As previously discussed, the COVID-19 pandemic is having an unprecedented effect on the Las Vegas real estate market. Not only has it had detrimental effects on the local economy, but also changed dynamics within the local marketplace.
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