Home prices in Las Vegas are shooting up higher than the hotel and casino towers on the glittering Strip.
Prices for single-family homes were up across the nation by about 7% annually as of March. But Las Vegas led the pack of metros, with the largest annual price hike, 12.6%, as of March, according to real estate data firm CoreLogic’s recently released Home Price Index. (That’s higher than San Francisco, where single-family homes were 10.8% more expensive year over year.)
Among the states, Nevada tied with Washington for the largest price gains, at 12.6%, according to the report. Sorry, Silver State buyers.
“California is losing its luster,” says Danielle Hale, chief economist at realtor.com® . “These areas [that topped the list] have a lot of California-like amenities—dry, sunny weather and great outdoor activities—but they don’t have exorbitantly high home prices, congestion.”
Nevada and Washington were followed by Idaho, at 12.3%, and Utah, at 11.2%. California rounded out the top five at 8.9%.
These states are “definitely more affordable than California, but prices are up quite a bit,” Hale says. “People coming in to those markets are not going to be priced out. But those who are already in those areas could be.”
The dramatic rise of Las Vegas’ housing market is rooted in its crash when the housing bubble burst, says local real estate agent and property manager Bryan Kyle of First Serve Realty. The Sin City metro area was among the hardest hit in the nation, so “there was more space to come back up,” he says.
The market has been gradually picking up steam for the last three years, Kyle says, and now, with a strong job market and a flood of buyers, there is nary an affordable home to be found.
More affordably priced homes typically receive several offers and can sell for more than their asking prices: “If we put a home on the market for $350,000, it sells immediately.”
All of the cities and states where prices are rising the most are seeing strong job growth, says Frank Nothaft, chief economist of CoreLogic.
“Millennials move there for the job opportunities,” Nothaft says. And once they arrive, they compete with locals for a very limited supply of properties, driving up prices. “That’s adding to the demand to buy homes.”
Nationally, each state saw single-family home price increases. But some saw much lower bumps. Wyoming had the lowest price gains, at just 0.4% as of March. Washington, DC, wasn’t too far behind at 1.4%; followed by Alaska, at 1.7%; Oklahoma, at 1.9%; and South Dakota, at 2%.