The home market in Phoenix is battling the growth of rental properties to such an extent that any single-family home that comes on the market becomes a hot commodity. Phoenix is probably the only market in the western United States hit harder by the real estate crash than Las Vegas.
Back East, Florida is also still reeling. What’s happening in Phoenix is not at all unlike what we have happening here in Las Vegas. People can’t afford down payments so they are renting. However, they can afford to rent. Thus, multifamily developers are seeing green valley-wide.
Granted, 2016 doesn’t look to be as busy with new apartment growth as 2015 was, but people are still choosing security deposits and leases over down payments and mortgages. For single-family landlords in Las Vegas, this is good and bad news. Homes for sale that can be rented are going fast. In other words, there are more players in the market.
Also, Class-A mid-rise apartment properties that now resemble posh hotel getaways are attracting more tenants, pulling them away from what was once a more popular option in single-family homes. Las Vegas property investors should be ready to strike when a suitable investment option hits the market.
Median list price (not sales price) is around $240k now in Las Vegas. But, sale prices are finalizing just above $220k. So, the market is remaining stable, price-wise, despite the lack of inventory. This means homes are still making great rentals for landlords who can come in with strong offers and act fast.
Rents are continuing to remain stable as well, so banks are confident in what investors have to provide their mortgage department. So yes, competition for tenants is increasing as larger, more high-end properties come online. But, with prices for single-family homes in Las Vegas still attractive, and mortgage rates hovering where they are, it’s still an investor’s market.