Investor purchases are on the rise again, with the Las Vegas Valley experiencing one of the country’s most significant upticks.
Last year, there was an uptick in the number of homes purchased by investors in the Las Vegas Valley because of tax benefits, affordable living, and endless things to do, just to mention a few.
The number of phone calls, text messages, and emails we receive from buyers looking for off-market properties to rehab and flip or rent has surged. I get at least 3 requests daily from someone seeking a property. Inventory across the valley remains historically low.
Currently, 69% of investor purchases are all-cash transactions, making them less affected by the high mortgage rates impacting the residential real estate market. Redfin reports that the typical price of an investor home in the U.S. is $464,560, a 9.2% increase from a year earlier. In the first quarter alone, investors bought $31.3 billion worth of American homes, marking a 6.6% year-over-year increase. According to MLS data, just under 4,000 single-family residential properties are on the market in the Las Vegas Valley, with approximately 697 priced under $400,000—just over 17%. Redfin places the median home sale price in the valley at $435,000.
“Given the limited inventory in that price range, it makes sense that investor activity is rising, especially as rent and resale values remain strong,” the realtor noted. “Investor activity mirrors the overall market trend of strong demand and high prices.” Redfin highlighted the roller coaster ride investor purchases have experienced in recent years across the U.S.
“Investor activity in the housing market is stabilizing after years of dramatic fluctuations. Purchases more than doubled during the 2021 pandemic homebuying boom, then plummeted nearly 50 percent early last year as declining rents and home values eroded profits,” Redfin’s report stated. “Now, with home prices and rents rising again and the initial shock of high mortgage rates fading, investors are easing back into the market.”
Las Vegas has also seen an increase in Wall Street-backed hedge funds and institutional investment companies, such as Invitation Homes, buying single-family residential properties and converting them into rentals. Several bills have been introduced in the U.S. House, Senate, and various state legislatures to either ban institutional investors from purchasing more homes or require them to sell off their current stock over several years. A UNLV study by Shawn McCoy, director of the Lied Center for Real Estate, found that investors (defined as entities that have bought five or more properties in the past 10 years) have purchased close to 15 percent of the housing stock in Clark County and own nearly a quarter of North Las Vegas.
Last year, two Wall Street-backed companies swapped 264 Las Vegas homes in a single transaction, marking an unprecedented sale for the local housing market. This sale was part of a larger $650 million deal between Starwood Capital and Invitation Homes, involving nearly 1,900 single-family rental homes, predominantly in the Sun Belt, including Texas, Florida, Phoenix, Las Vegas, and Los Angeles.
