Needless to say, the worldwide economic hit due to COVID-19 has been staggering. In the U.S. alone, hundreds of thousands of small businesses have closed for good, but certain markets have remained untouched. Others are doing better than ever before. In every crisis their lies opportunities, and the Las Vegas real estate market is one such opportunity. Despite the Las Vegas tourism economy taking a heavy hit, the Las Vegas real estate market is doing better than ever.
Here’s why the Las Vegas Real Estate market is booming despite COVID-19
Low Mortgage Rates
Lower monthly payments are inspiring those who would typically rent to buy their homes. They also help expand any investor’s budget.
Prior Market Health
The Las Vegas Market was doing exceptionally well before Nevada declared a state of emergency. Home sales surpassed last year’s pace and existing home prices had just surpassed their longstanding record of $315,000, which was set back in 2006.
Crisis = Opportunity
There are still plenty of Americans with jobs and cash on hand. The layoffs that were caused by COVID-19 mostly affected low-income workers. Investors are snagging up homes directly from builders and buyers. Flippers such as Opendoor have resumed making offers for Las Vegas homes in full force.
Las Vegas is also a strong rental market. Nearly 40% of the population rents in Las Vegas, making it an attractive hub for real estate investors.
Another opportunity that has been unexpectedly created is early retirement. Many have decided to enter into retirement early due to COVID-19. It’s been a major motivating factor for older workers to enter their golden years ahead of schedule. Now is a perfect time to buy homes with more outdoor space in warmer climates.
Smart Sellers
For sellers, it is a great time to sell. Buyers are looking for houses for sale, and there isn’t nearly as much competition as there usually is. Many sellers have chosen to back out during this time. As more and more buyers enter the market, the prices are only going to increase thanks to the small supply.
COVID Buyers
The cost of living in Nevada is considerably lower compared to states such as California and New York. Thanks to the newfound freedom provided by working remotely, new Las Vegas homebuyers can afford more with the same income. Thousands of companies all over the U.S. have realized that employees can be just as productive from the comfort of their own homes. Since an increasing number of employees can work from anywhere, home buyers from out of state are buying up Las Vegas properties in record numbers. The technology required for digital work will only improve, meaning that areas which offer a great quality of life will see a surge in newcomers.
Tax Reasons
Nevada is one of nine U.S. states with no income tax. There is a mass exodus from New York, California, and Illinois due to rising tax rates in these states. There is no reason to stay in these “economic hubs” if more lockdowns are likely and white collar workers can work from anywhere.
In Conclusion
Be fearful when others are greedy and greedy when others are fearful.
-Warren Buffett
As is the case with any investment decision, the best time to act is when no one else feels like they should. The current state of the market is proof that there are still plenty who can keep a cool head in the midst of uncertainty.