LAS VEGAS (KTNV) — In our Meadows to Metropolis series, we're looking at the explosive growth in the valley as we're definitely feeling some serious growing pains when it comes to housing.
13 Action News anchor Tricia Kean spoke with local experts who say whether you're looking to rent or buy, some people just won't be able to afford Las Vegas anymore.
"I'm looking for my forever dream home," Bill Denis said.
Denis just moved to Las Vegas from New York and is happy with what he's seeing.
PLENTY OUT THERE
"It seems like there's plenty out there. But it's just finding the right one," Denis said.
Denis says he knows prices are high, but feels the Vegas market is fair. He says he's getting a lot more house than he would back home.
PRICES UP EVERYWHERE
"For the same homes I'm looking at here, I'd probably be paying a few hundred thousand dollars more back on the East Coast," Denis said
"Everywhere in the country, this is what's happening. Prices are going up," Aldo Martinez, president of the Las Vegas Realtors Association, said.
Martinez says don't let sticker-shock prevent you from buying a home.
"We live on an economy of what we can finance. It's the reality of what it is. You're not paying cash. Most people are financing it," Martinez said.
You may think you can't afford a $400,000 house. But interest rates are low, real low.
With a mortgage offering a 3% interest rate, that $400,000 house will cost you about $1,600 a month. Martinez says rates won't be this low forever.
"So buy now while the rates are lower and 42% of your payment is going to principal reduction," Martinez said.
But picky buyers will need to be patient. Home construction is down and there are fewer choices than we've seen in the past. However, Martinez says that might be a good thing.
"When we were building 38,000 homes (38,705 in 2005, according to SalesTraq) during the height of the market, people were owning four homes or more and couldn't even afford the one they lived in," Martinez said.
Just a couple of years later the U.S. housing bubble burst, devastating the economy. But this year we've seen just more than 10,000 new homes, 10,734 in 2021, according to SalesTraq, in Las Vegas.
FEWER WILL QUALIFY
Unfortunately, fewer options though do mean some median income Las Vegans won't be able to afford a home of their own.
"Yeah, fewer people are going to qualify. It's going to be a lot tougher," Martinez said.
HIGH RENTAL PRICES
The high home prices also translate to high rental prices.
"Almost all the tenants have seen an increase in the rise in rent," Rick Raines, owner of the Atlas Group property management firm, said.
TENANTS STAYING PUT
Despite the inflation, Raines says many tenants are staying put.
"They first get that initial shock. But when they go out and try to find similar properties they're even more," Raines said.
TENANTS LINING UP
If a tenant feels their rate hike is just too much, Raines says there's typically a line of other renters looking to scoop up their property.
"There's somebody else ready to take it because they're moving out of someplace that got bumped even higher," Raines said.
FOR BETTER OR WORSE
The average Las Vegas rental will cost you about $1.50 a square foot. Prices are certainly better in some states, but they're also worse in others.
"When you're in a small apartment in California, you're looking at about $3.65 a square foot. If you go to Georgia, it's about 90 cents a square foot," Raines said.
WHOLE YEAR'S RENT
One thing that's a little different in 2021 is the uptick of retirees moving here to rent, after selling a home in another state.
"What they typically do is put a whole year's worth of rent down and they basically check out our valley," Raines said.
There are also renters still willing to pay top dollar for prime real estate.
"We just got done renting a couple of houses for $8,000 and $9,000 a month at Lake Las Vegas," Raines said.
TOUGH FOR RENTERS
But Raines admits it's a tough market for renters.
"It's a job to find a place that you can afford and be one of the first to get an application in. Especially, at the lower pricing," Raines said.
That means some renters will be pushed out of the market.
But Raines says certain demographics will always be here to rent; those temporarily stationed at Nellis Air Force Base, corporate types here for a limited time, college students and young adults.
"There's the demand in the rentals. That's why the rental prices continue to rise, because housing prices have basically put a lot of people in a position of only being able to rent," Raines said.
BEFORE IT'S TOO LATE
As for Denis, he's one of those fortunate enough to buy and says he's looking to find something quick before interest rates rise.
"By the turn of the new year calendar, it could be up to 4% or more. So, definitely feeling a little pressure. Hopefully, not make a rash decision but a good decision," Denis said.
MORE FROM 'MEADOWS TO MRETROPOLIS':
Our series, “Las Vegas: Meadows to Metropolis,” looks to answer that question. Tune in to 13 Action News at 6 p.m. throughout the month of November for in-depth reporting on how rapid growth impacts Las Vegans.