Will The Real Estate Market Sustain This Momentum?

–By Tyler Brady

Las Vegas is a location where people win big or lose big, but what does that mean for your home values? Back in the real estate crisis of 2008 Las Vegas was hit hard. Do we need to worry about repeating the same mistakes in 2020? To answer these questions, we need to come to the present and then talk about the past.

As usual, the winter of 2019 and early spring of 2020 was slow in Las Vegas real estate. Usually the Spring starts to wake up the market for a strong summer break, as people want to know where they are going to live, send their kids to school, and spend their holidays. The COVID break that abruptly started in March 2020, bringing children home from classrooms and many workers home from their places of employment, brought with it a sense of uncertainty that put a halt to real estate activity. The market was experiencing people canceling contracts and second guessing any movement. It seemed that for every three homes that went into contract, two homes would fall out. As a professional in real estate sales I thought I saw the writing on the wall. The world felt like it was coming to an end and my career was about to get difficult. What I didn’t realize is that this industry was ready to get turned upside down, but not for the reasons most people could foresee.

With many casino workers furloughed, when we felt that most home buyers would be afraid or uncertain of the market, real estate sales started to climb and the luxury real estate market started to boom. Now, we have set a record in Las Vegas for the number of homes over a million dollars in contract at one time. During such unprecedented times, I kept working to improve my business and internal procedures and ultimately finalized merging my real estate brokerage, Brady Luxury Collection, with Luxury Homes of Las Vegas.

Current inventory levels have dropped significantly, making this a very strong seller’s market. As interest rates hit record lows, home buyers are in full swing. Beyond all the uncertainties driven by the current pandemic, a primary reason we aren’t seeing more home sales right now in Las Vegas is because homeowners are afraid to sell for fear they won’t be able to find another home to move into. With some predicting that a COVID vaccine could come towards the end of 2020, early 2021, this has the potential to cause a second flood of buyers entering our market. In the third quarter of 2020, we have seen a large spike in real estate sales which could be contributed to a pent-up demand of people previously waiting to see what might happen with schools and the economy. I anticipate the Las Vegas market maintaining this momentum for the foreseeable future. This is especially true when new home construction is dominated by locals and resale is dominated by out-of-state buyers. This signifies that out of state buyers want out, and they want out now. But is this sustainable? My answer is YES, at least for the next year, and hopefully many years after that. At Luxury Homes of Las Vegas, we work with business owners, executives, dot-comer’s, athletes, and other business professionals here in Las Vegas as well as those coming from outside the market. With large companies moving towards increasingly remote workplace opportunities, and some large Silicon Valley companies announcing they will no longer hire at California wage rates, people are fleeing for a better standard of living and tax-friendly areas. Additionally, California is looking to charge a wealth tax, remove landlord rights, along with other potential decisions that may be perceived as making it an unhealthy place to run a business or invest; thus, many business owners are fleeing to a state that is more business friendly, with tax incentives, and bringing their businesses with them. Las Vegas is the place to be, with low cost of living and no state income tax. Don’t forget the Michelin Star restaurants, world-class entertainment, and a convenient international airport. Las Vegas is a great city in itself and with Zion and beaches a leap away it’s hard to find a better hub for both business and pleasure. What better state is there for your business? As a proud, third-generation Las Vegas resident, I say none. Perhaps a silver-lining to the crisis that has been this pandemic, could be the break our city needed to round out the community and make it more resilient to economic changes.

To circle back: with home sales booming and prices rising do we see another real estate crisis coming? The 2008 home crises started with people buying as many homes as they could hoping to get rich quick. Their game plan was to buy and rent out homes for a good investment. Having worked for my brother’s residential property management company, Brady Realty Group, and studying and witnessing the effects of an over-saturation of investment properties and underqualified investors, there weren’t enough people to rent all of the homes being built. There were more homes available than renters to live in them. This lack of balance ended up causing rental prices to freefall as landlords needed to get homes rented or risk defaulting on their loans. This is much different from what I am seeing in today’s market. Today’s real estate landscape is heavily characterized by savvy businesspeople seeking refuge in a state that welcomes their business and desires safety for its people. Investors aren’t trying to get rich quick; they are looking for a place where owning a business is appreciated and respected. Though some investors are buying investment properties, this is not flooding the market and so we are keeping a healthy rate of return. Homeowners are being more responsible and not over-leveraging their homes to buy the second and third home. One other key detail is that investors buying now are more qualified than before.

Though I have never taken a ride in the Back to the Future DeLorean, I believe the state of our real estate market is strong. It is a sellers’ market which means increasing prices and fast turnarounds. It’s not a bad time to call and get the value of your home.


Tyler Brady, Realtor, Luxury Homes of Las Vegas, Tel: 702-888-2352