By Eli Segall Las Vegas Review-Journal, published July 23, 2021 5:00 PM
Investors have been snapping up homes across the U.S. during the current buying binge, though one market in particular has seen the biggest jump in deals: Southern Nevada.
Residential real estate investors acquired 3,043 homes in the Las Vegas area in the second quarter, up 279.4 percent from the same period last year when sales overall dropped in the early months of the pandemic, according to a new report from listing site Redfin.
Investors accounted for 22.8 percent of all home purchases locally last quarter, Redfin reported.
Overall, the total number of investor purchases in Southern Nevada was fifth among the 41 metro areas listed in the report. Investors’ share of the homebuying market in Las Vegas was fourth highest nationally, and the year-over-year percentage change in purchases here was by far the highest, with Chicago a distant second at 208.8 percent.
Redfin did not provide a breakdown on which kinds of investors are acquiring how many homes, but in general, such buyers can include flippers and people who purchase houses to rent out.
Fueled by low borrowing costs and more out-of-state buyers than usual, Las Vegas’ housing market has seen record-high prices and rapid sales for months. Sales dropped for a few months during the normally busy spring buying season, but overall, house hunters have flooded properties with offers and routinely paid over the asking price.
At the same time, Southern Nevada’s rental market has also heated up, making it a potentially lucrative time to be a landlord as tenants face higher rents and tighter availability.
Nationally, investors bought 67,943 homes during the three months ended June 30, the highest quarterly total on record, Redfin reported.
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, president of trade association Las Vegas Realtors, told the Review-Journal on Friday that investors expect Southern Nevada home prices to reach the point that the average buyer can’t afford to purchase a place and will instead have to rent.
“They’re banking on it,” he said.