Spring 2022 Real Estate Outlook for Las Vegas
According to predictions, the 2022 spring Las Vegas real estate market will be thriving. More homes are also likely to be offered for rent or for sale in 2022, which means that prospective buyers will have more choices when searching for their next home. Home prices and interest rates are expected to rise, making affordable housing more scarce. Still, the advent of remote work and flexibility in living location will also allow people to expand their search radius for a new home.
A “Whirlwind” Market in 2022
The Las Vegas real estate market will bring unique considerations. In 2022, predictions indicate that most home buyers will still want to live in the suburbs, even if they are expanding their home search to a larger radius. About one out of every five prospective homeowners no longer need to live near their offices. This means that while they will still be looking to move to the suburbs, they will be looking to live in the suburbs further away, which for many people includes the suburbs in Las Vegas. Many prospective homeowners in 2022 are millennials – about 45 million, to be precise – and they are looking to buy homes in places where they want to live. Las Vegas is a great option for younger prospective home buyers with all that it offers.
Is Las Vegas Real Estate Affordable?
While the housing market looks promising for both prospective home buyers and sellers, home buyers still face the age-old question of affordability. As demand for housing in Las Vegas increases, so does the price for renting or buying a home. Home prices rose 2.9 percent in the past year, which set records. Home prices are expected to rise even more in 2022, which will make the local market even more competitive. Additionally, home loans are also rising in price, and that trend will continue into 2022. Mortgage prices will have risen 3.6% by the end of 2021, and they are projected to keep increasing into the following year. The increase in mortgage prices also means that there will be an increase from current mortgage interest rates in Las Vegas as spring approaches. Because of the rise in home prices, many people will be looking to rent rather than buy, which translates to a 7% increase in rentals over the first quarter of 2022.
Record Home Sales
While many people are looking to buy a home in 2022 in Las Vegas, many people in the area are selling their homes too. Home sales hit an all-time high for the first time in 16 years in 2021. An increase in home sales is attributed to several factors, including a decrease in unemployment rates and a strengthening economy. Income growth has been rising over the past year, and it will have increased by an average of 3.3% by the time 2021 comes to an end. The average increase in income rates means that home sale rates will continue to be fairly high even though prices for home loans will continue to rise as well. Home sales are expected to remain high in 2022, and they’ll be on par with record highs set in 2021.
Home Prices in Las Vegas
The price of homes in Las Vegas has been steadily increasing over the past ten years, and that trend is forecast to continue into 2022. Home price increases have been rising steadily, even if not consistently, since 2012. In 2013, home prices hit double-digit growth, and they have increased an average of 4% to 7% since then. Demand for housing increased more in 2020 than any year since home prices began to rise, which was advantageous for sellers, as it meant they could ask for higher home sales prices. In the spring of 2022, economic growth is projected to continue, which means that purchasing power will stay strong for prospective home buyers. Median home sales are likely to increase as a result, with an estimated rise in the average home price of 2.9% in 2022. While that is good news for sellers, it also means that home buyers may face higher monthly costs of living and higher rates of home loans in Las Vegas as contractors work to keep up with production to meet consumer’s demands. Housing affordability will also be a factor to consider looking into for 2022, as housing costs will largely influence demand and production.
Las Vegas Real Estate Market 2022 for Rentals
While some people will be looking to purchase their first home in Las Vegas in early 2022, many people will be hoping to rent a place. Although rental rates were relatively slow at the start of the pandemic in spring of 2020, the demand for places to rent steadily increased over the course of the year, and it has continued to rise since then.
Rental demand has increased for a number of factors, including:
- Remote work
- Non-traditional work environment
Since more people can work remotely, rental demand has increased as people have gained the freedom to live farther from their workplaces. That trend is projected to remain true in early 2022, as people are eyeing Las Vegas as a destination where they want to live, even if their offices are located farther away. With the rising cost of home sales, rental prices are expected to outpace demand for new homes by just over 7%, which means landlords hoping to attract renters next year may have their work cut out for them. (Read more about the mortgage rates in Las Vegas here.)
Flexible Work Schedules
When the COVID-19 pandemic began in 2020, many employers were forced to adopt remote work policies. However, even while some normalcy returned in 2021 and employers returned to an office-based work environment, surveys have shown that many employees prefer to work remotely at least several days each week. While some employers have returned to an office-based work mandate, others have continued to give their employees the option to work remotely if they so choose. The latter option is forecast to be a good solution in 2022 for productivity and even employee retention, as employees are likely to be happier and more productive if they live and work in a place where they want to be. The option to work remotely has been a welcome change for employees. Before that, about a quarter of individuals surveyed reported an average commute time of more than an hour in one direction.
Preparing for Buying a Home in 2022
For people planning to buy a home in the first quarter of 2022, a budget will be one of the most important considerations to make. Fortunately, as the use of technology continues to seep into the real estate market, prospective homeowners will find that it is easier and more convenient than ever to examine their budget and see how much they can afford. They can also look at mortgage rates in Las Vegas today to better understand how much they can expect to pay in mortgages over the next few months.
For you and your family, the thought of buying a home in Las Vegas in 2022 may be simultaneously nerve-wracking and exciting. However, working with an experienced loan officer can help you prepare for homeownership or even renting. Contact us today if you are interested in buying or renting a home in Las Vegas.