Monday, July 26, 2021 / by Ken Couture
Investors have now bought homes across the United States during the buyout runaway, with South Nevada having the largest increase in trading, especially in the market.
Residential real estate investment rose 279.4% over the same period last year, when overall sales fell at the beginning of the pandemic, acquiring 3,043 homes in the Las Vegas area in the second quarter, according to a new report from listing site Redfin.
Investors accounted for 22.8% of all homes bought locally in the previous quarter, according to Redfin's report.
Overall, Southern Nevada's total investment purchases were listed in the report, ranking fifth of the 41 metropolitan areas. Investors' share of the Las Vegas home buying market is the fourth highest in the country, with Chicago taking second place with an annual purchase rate change of 208.8%.
Redfin didn't provide an analysis of investor types, but in general, these buyers include flippers and those who buy rental homes.
Driven by lower borrowing costs and more out-of-state buyers than usual, the home market in Las Vegas has been seeing record high prices and rapid sales over several months. Sales in the usually busy spring buying season fell for several months, but overall, house-hunters poured in real estate offers and regularly paid their asking prices.
At the same time, there are potentially lucrative times for being a landlord as the rental market in southern Nevada is also overheating, and tenants are facing higher rents and tighter availability.
Redfin senior economist Sheharyar Bokhari said in a news release that investors “see soaring home prices as an opportunity,” as “solid returns are pretty much guaranteed — especially when you’re an investor who has access to extremely cheap debt.”
Investors are also capitalizing on the “surging demand” for rentals, he noted.
“With so many Americans priced out of homeownership, investors can turn an easy profit by buying up properties and renting them out,” Bokhari said.
Aldo Martinez, chairman of the Las Vegas Realtor Trade Association, told ReviewJournal on Friday that investors expect home prices in southern Nevada to reach the point where ordinary buyers cannot afford to buy a house and have to rent.
“They’re banking on it,” he said.
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