Investors have bought 131K homes in Las Vegas Valley since 2000

Patrick Blennerhassett, Las Vegas Review-Journal on Dec 12, 2024

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Investors have purchased approximately 131,710 homes in the Las Vegas Valley since the start of 2000, according to data obtained by the Las Vegas Review-Journal.

The valley posted the biggest increase of investor home purchases in the nation in the third quarter compared to the same quarter last year, at 27.6 percent, Redfin’s economic research lead Chen Zhao said. Investors bought the most homes in the second quarter of 2022 (4,229), and investors are currently buying around 23 percent of all the homes that are sold in the area, according to Redfin.

“Las Vegas is a particularly alluring city for investors because of its booming entertainment industry. We know from our agents that investors often buy and rent out multiple properties that immediately get filled by entertainment and service workers,” she said. “Las Vegas is also an Airbnb hotspot, so a lot of these home purchases turn into short-term rentals for vacationers or seasonal workers.

Redfin defines an investor as a buyer that uses an entity such as a corporation, a limited liability corporation or a family trust to make the home purchase. Zhao said the recent U.S. presidential election and rate cuts from the Federal Reserve could have played into the valley’s jump more than other metros.

“While it’s hard to pinpoint the exact reasoning behind the ebbs and flows of investor activity in Las Vegas, some folks this last quarter may have wanted to scoop up properties before the election since there was a fair amount of economic uncertainty surrounding the outcome, “she said. “Rates were also lower in Q3, and while consumers didn’t respond because they were waiting for rate cuts, it’s possible that investors were more responsive.”

A 2023 UNLV’s Lied Center for Real Estate study, which defined investors as any entity that bought five or more properties over the past decade, found investors could own at least 15 percent of the valley’s entire housing stock and as much as 25 percent in North Las Vegas alone.

Nicholas Irwin, the research director for UNLV’s Lied Center for Real Estate said investor purchases peaked during the pandemic when interest rates bottomed out and corporate landlords swooped in to purchase properties at a discount.

“Effectively these investors are able to borrow money at a very low rate and sometimes they could outbid locals,” he said. “The demand is going to be here for awhile, we are still growing as a metro region, and if you can get a positive rate of return on an asset like a house, that is why they are buying these houses because it’s a stable return and then with the nature of the tax code it allows them to keep these houses for a very long time.”

A Review-Journal investigation from January found that one corporate investor backed by Wall Street (Starwood Capital Group) sold 264 homes in Clark County for $98 million to Dallas-based Invitation Homes (NYSE: INVH), according to Clark County property records.

The deal, made in three separate transactions, closed on July 18, property records show. The largest sale was $57.5 million for 155 homes, the second was $26.3 million for 70 homes and the third was $14.1 million for 39.

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