Las Vegas is now the fastest cooling housing market in the country, as the supply of for-sale homes grows in the face of dwindling demand from both investors and everyday buyers, including retirees fleeing the city.
Home sales in the city were down 10.2 percent in July compared to a year earlier, according to a recent report by Redfin, while inventory was up a whopping 44.8 percent, the largest increase of any U.S. metropolitan area analyzed by the real estate brokerage.
Even the homes that managed to sell took longer to go under contract than they used to. In July last year, the typical home sold after 36 days; last month, it took 15 days longer, for a total of 51 days. By comparison, the typical U.S. home takes 40 days to sell.
This glut of for-sale homes is pushing prices down in the Nevada city. In July, the median sale price of a home in the city was $440,000, down 2.2 percent from a year earlier and below the national median sale price of $443.471, according to Redfin.
Las Vegas’ Pandemic Hangover
On one hand, Vegas is going through the same boom-and-bust cycle that other pandemic boomtowns like Austin and Tampa have been experiencing for the past couple of years. These cities saw an explosion in housing demand during the COVID-19 pandemic, thanks in part to their relative affordability, which led to prices shooting through the roof.
In July 2019, before the pandemic, the median sale price of a home in the city was below $300,000; by June 2022, it had reached a peak of $447,500, topping the national average.
Many of these towns experienced a construction surge over the past few years, as they tried to keep up with higher demand. But inventory landed on the market as buyers were receding to the sidelines due to rising costs and prohibitive mortgage rates, which are still hovering near the 7 percent mark.
“Vegas is one of the places that had a big construction boom during the pandemic, and is still oversupplied,” Daryl Fairweather, chief economist at Redfin, told Newsweek.
“It’s likely true that Vegas construction is slowing down more than other metros,” she said, as developers face an oversaturated market.
Deserted casinos and falling gambling revenues
On the other hand, Vegas is now also suffering from a tourism slump that is threatening investment in its high-end real estate market as well as the stability of the city’s economy and job market.
According to the Las Vegas Convention and Visitors Authority, visitor volume in June was down 11.3 percent from a year ago, while convention attendance fell 10.7 percent and hotel occupancy declined 6.6 percent.
Much of this downturn in tourism can be traced back to growing economic uncertainty across the country, with the radical Trump administration’s agenda sending consumer confidence plunging and raising fears of rising inflation and even an incoming recession.
“For a metro area so heavily dependent on leisure and hospitality, weaker tourism directly affects local job stability, household income, and ultimately, the pool of prospective homebuyers,” Realtor.com senior economist Anthony Smith told Newsweek.
There are currently more million-dollar homes for sale in Vegas than ever before, as the luxury housing market experiences a similar glut to that in the regular market. In July, according to Realtor.com, listings priced at $1 million or more jumped 42 percent from last year, totaling 1,188 listings.
“That’s nearly double the national pace of 21 percent,” Smith said.
This surge in inventory has given buyers more options and more negotiating power, allowing them to wait for a better deal if they think a home is priced too high. As a result, sellers are being forced to significantly slash prices: in the $1.2 million-plus range, prices were down 12.17 percent year over year in July, compared with a 1.14 percent drop at the national level.
Even steeper cuts were reported in the $2 million-plus range, where prices were down 18.3 percent year-over-year last month.
“While most hospitality workers aren’t directly in the market for luxury homes, Las Vegas’ dependence on tourism means a slowdown in visitor traffic weighs on the entire local economy,” Smith said. “That softens business revenues, reduces secondary spending, and ultimately dampens the confidence of higher-income buyers and investors who might otherwise be active in the luxury segment.”
Despite reporting a record $31.5 billion in overall revenues last year, the Nevada Gaming Control Board’s 2024 fiscal year report revealed that its net income dropped 24.4 percent, including a 40.4 percent plunge on the Las Vegas Strip.
Is Vegas Losing Its Luster?
Despite recent headwinds, local realtors are optimistic about the city’s future, trusting that its fame will continue to attract visitors and potential residents.
“Las Vegas has consistently been one of the hottest real estate markets in the country for the past several years,” Tania Jhayem, a realtor at Urban Nest and proud resident of Las Vegas for over 35 years, told Newsweek.
“Although we have cooled down a bit, we are still a relatively healthy market. A truly slow market usually means homes sitting 90–120 days or more,” she said.
While visitor numbers are dropping, partly because hotels have become more expensive in recent years, Jhayem said that the city’s hotel industry is adapting to tourists’ financial concerns, “temporarily removing resort fees and offering local discounts and incentives to stimulate the economy and bring more business to Las Vegas.”
Tourists and homebuyers will continue to be drawn by Vegas’ immortal appeals, Jhayem said, including its “year-round sunshine, the outdoor lifestyle with hiking at Red Rock Canyon, boating at Lake Mead, skiing at Mount Charleston, and the fact that all this comes with no state income tax and a business-friendly environment,” she said. “That mix of lifestyle, affordability, and opportunity is why people continue to choose Las Vegas.”
Whether the frozen city’s housing market will start warming up will depend on sellers’ willingness to readjust their price expectations, she said.
“What we’re noticing on the ground is that many sellers still want their price and are unwilling to adjust, which often makes them less competitive and leaves their homes sitting on the market longer,” Jhayem said.
“The homes that move the fastest are the ones priced aggressively or are offering incentives. In this market, buyers have more leverage—from negotiating price and closing costs to even having sellers help buy down interest rates.”
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