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Demand for properties in the Las Vegas area leads to bidding wars, lotteries and waiting lists

Thursday, October 21, 2021   /   by Ken Couture

Demand for properties in the Las Vegas area leads to bidding wars, lotteries and waiting lists

Demand for properties in the Las Vegas area .png
There is a relentless demand for extremely low inventory homes in the Las Vegas Valley.

Historically low-interest rates have more buyers in the market.
 
According to the online real estate company Zillow, in 2020, Las Vegas got the highest amount of online page views out of several other major cities in the country.
 
Zillow also listed the cities where people are moving from.
 
Los Angeles was the most common origin, followed by Chicago and Seattle.
 
Founder of The New Homes Experts Las Vegas, Jennifer Graff, said the demand for housing right now is something she's never seen before.
 
"Unprecedented. You know I’ve been doing this for almost 20 years. So pre great recession time and at that time the market was in extremely high demand- but I haven’t seen anything like this," Graff said.
 
She said financing has gotten a lot more strict and people buying homes are extremely well qualified. Graff shared that the pandemic has made people realize they can get more space, have a backyard and they're not locked into living close to work anymore.
 
"There’s no state income tax, housing is relatively affordable to other places in the country so its sort of like why not? Why not consider something I would’ve never considered maybe a year and a half ago, and all of a sudden Las Vegas is on a lot of people’s map,” Graff said.
 
Graff is not surprised that people are relocating from Los Angeles, and that it ranked top of the list.
 
“I would say most of our traffic especially towards our website that are coming in to buy new or of course resale are from out of state. I just had a person from Montana buy a house in North Las Vegas site on seen. They just came in this weekend and to pick out their options and they had never seen the house before," Graff said.
 
She said one of the factors behind the price increase of homes is simply supply and demand.
 
There's more people that want to buy than there are homes. 
 
“The amount of resale homes that are on the market are less than one half of a percent. Point 4 percent of homes as far as the resale market goes are currently on the market. Prior to the pandemic we were hovering about one point one which was still low," Graff said.
 
Currently, when a house goes on the market, there's at least 10-15 buyers for every single home. 
 
According to the California Association of Realtors, in March, the statewide median home price was $758,990. That's an increase of 23.9% from March of 2020.
 
In Nevada, Las Vegas Realtors (LVR) reported that the median home price in March was $363,000. That's up 13.8% during the same month last year.
 
“Which is incredibly high so you think on average home prices are normally in an average year go up about three-four, maybe 3% a year is about the norm. Housing prices should not be going up you know 10-15% every year that’s just, that’s not normal that does not equate to normal inflation because you think about people’s salary right," Graff said. 
 
North Las Vegas couple Jesus Rodriguez and his wife Veronica started to search for their second home after they found out they were expecting a baby girl this summer,  but their search has been a struggle since December competing with out of state buyers. 
 
"They come with more money than us because they sold their house for a million dollars and now they’re buying a house in my price range for cash. Obviously the home builders or anybody selling their home -even you would do it yourself and say I would take this cash offer over this guy that’s getting a loan because the money is more secure," Rodriguez said.
 
They were working with Lennar Homes in Las Vegas, but were caught in bidding wars that became too much for them.
 
“Lets do 430 cause that was our budget and they say ok there’s another offer that came in 460. I’m already over my budget so I agree. And then it just kept getting higher and higher and it happened really fast, so I was out of my element it got me frustrated because I don’t have that kind of money. That’s just money you’re spending that you really don’t have," Rodriguez said.
 
When the couple wanted to see an older home for sell, the seller requested that they submit an offer before viewing the home.
 
“But it’s crazy that they won’t let you see the house. Without even making an offer. Even our realtor was like, yeah this is kind of scary to me because now they just want you to buy a site on seen," Rodriguez said.
 
And with inventory of houses so low, people are being driven to the new homes market.
 
Currently the couple is on a waitlist with DR Horton. 
 
"I just got a call from the guy recently about a week ago and he says we’re sixth on the list and we’re hoping the price they gave us – stays the same. Because the price of lumber is going up," Rodriguez said.
 
Over the past 12 months, lumber prices have tripled. According to the National Association of Home Builders, the price of lumber will increase the price of an average single-family home by $35,872.
 
Aside from bidding wars and waitlist, new construction companies are holding lotteries or 'drawings.'
 
Brian Kunec, the regional general manager for KB Homes, said new build companies are running into the same type of situation. Demand is far exceeding the supply. In the last few months KB Homes started holding drawings since they have more interested buyers than built homes. 
 
“The process we’ve instituted is a drawing and the drawing we believe is the most fair and equitable way to go about it so we don’t charge people more money after we publish what the prices are. What we do is randomly select people from the interest list and give them the ability to buy that next release of lots," Kunec said.
 
KB Homes opened eight new communities this year, with five more on scheduled. In total they have 28 communities throughout the valley.
 
“I think most importantly if you look at the western side of the United States, this is still one of the most affordable cities to live in from a lot of perspectives. So that coupled with the entertainment and the amenities and the weather I just think people are seeing this as a great destination to move to," Kunec said. 
 
When it comes to affordability, Graff recommends North Las Vegas.
 
“When you’re speaking to a home here lets say in Summerlin where brand new construction you’re looking realistically for a single family home no less that $500,000. That same home you can purchase in North Las Vegas for about $363,000 so it’s almost a $150,000 less for that same home. And then so now people are really looking North Las Vegas as the new sanctuary for affordable housing," Graff said. 

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