Trends & News2021 Las Vegas Real Estate Market Trends to Expect by Sylvia Shalhout October 10, 2020October 9, 2020 by Sylvia Shalhout October 10, 2020October 9, 2020The Las Vegas real estate market has been making headlines during the coronavirus pandemic. But it’s not for the reasons you might expect. Rather than making headlines for a bursting housing bubble or a full-blown housing market crash (as many predicted would happen this year), everyone has been talking about how hot the Las Vegas real estate market 2020 has been. Demand is high, inventory is low, and home prices are soaring.According to Realtor.com’s Housing Market Recovery Index, the Las Vegas metro area officially crossed the threshold for recovery back in June, after taking a hit from COVID-19 earlier in the year. As of the beginning of October, the index has dropped somewhat but sits at 121.5.While many real estate markets across the US are experiencing a kind of boom despite COVID-19 (like the Seattle housing market), these trends are quite unexpected for Las Vegas. That’s because the city’s economy, which relied greatly on the tourism industry, was hit pretty hard by the pandemic. In August, the Las Vegas metro area recorded an unemployment rate of 15.5%. While the nation as a whole experienced high rates during the first wave of the coronavirus, the latest numbers show a somewhat improving situation, with a national unemployment rate of 7.9% in September 2020. Related: The Effect of the Coronavirus on the Las Vegas Real Estate MarketWhat impact will this kind of imbalance between the economy and the real estate market have on the industry in 2021? Will the boom continue or will the housing market go down in Las Vegas? According to the general forecast by multiple experts in the industry, here are the 6 Las Vegas real estate market trends we can expect in 2021.#1. Las Vegas Housing Inventory May Get a Boost in 2021Let’s take a step back before getting into the first of our Las Vegas housing market predictions. Why is housing booming right now, amid a health and economic crisis? It boils down to a few things, one major factor being very low housing inventory.Las Vegas Realtors reported that, at the beginning of September, there were less than 4,700 homes for sale on the market. Although that number ticked up by the end of the month to 4,798, the inventory was still down year over year (YoY) by double digits – 34.6%.Who is buying up Las Vegas homes for sale? Across the US, millennials and first-time homebuyers are entering the market to take advantage of low mortgage rates. While this is true for the Las Vegas real estate market, there is another set of buyers in the city – internal migrants. During COVID-19, Las Vegas has seen a high influx of people coming from more expensive regions like the New York, Hawaii, and California housing markets. Las Vegas has more of a “suburban feel” and is relatively affordable compared to these areas, hence the migration trends.So why is the Las Vegas real estate market trend of rising inventory expected for 2021? It comes down to the current mortgage forbearance in place and unemployment rates. Expected to expire by 2021, the federal mortgage forbearance is protecting homeowners who are struggling with unemployment during COVID-19. Because the unemployment rate is so high in Las Vegas, this could mean a large number of distressed real estate listings, flooding the market at discounted rates next year.Distressed properties can make for a good real estate investment. Learn How to Find Distressed Properties for Sale.#2. Housing Prices May Drop in the Las Vegas Real Estate MarketRight now, Las Vegas housing prices are soaring. Las Vegas Realtors reported that in September, the median sales prices of existing single-family homes reached $337,250, up 8.8% YoY. In fact, this Las Vegas real estate market trend of rising prices was witnessed in March, June, July, and August of this year. And Zillow reports that home values in the Las Vegas real estate market have gone up 3.8% over the last year.Because these house price trends do not match the current economic climate in Las Vegas, which continues to struggle, this price growth is not sustainable. So it’s very likely that home prices will drop in the Las Vegas real estate market 2021.This Las Vegas real estate market forecast comes from CoreLogic. In its Home Price Insights Report, the Las Vegas metro area was second on the list of “Top Markets at Risk of Home Price Decline.” Corelogic predicts that prices will fall in the area by 6.5% by August 2021.#3. There Could Be a Shift Away From a Hot Seller’s MarketBased on the last two Las Vegas housing market predictions for 2021, it’s possible that the city may go through a market shift – from a very hot seller’s market, closer to a buyer’s market. After all, a buyer’s market is characterized by both rising inventory and dropping prices.However, it’s important to keep in mind one factor and that is demand. If demand remains high in the Las Vegas real estate market 2021, a small boost in inventory from distressed properties may not be enough to match it. And with the mortgage rate forecast showing rates dropping as low as 2.9% next year, demand will remain high.So it’s more likely that the Las Vegas real estate market will undergo a very slight cooling where buyers will have more choices in homes for sale and find bargains in distressed homes. 2021 may resemble more of a balanced market than a full-blown buyer’s market. Related: Will the 2021 US Housing Market Be a Buyer’s Market or a Seller’s Market?#4. The Las Vegas Housing Market Will Not Crash in 2021As of now, there are no clear signs of a housing market crash happening in the 2021 Las Vegas real estate market.A Las Vegas real estate market forecast 2021 with a rise in inventory and dropping home prices means a housing market crash is in the city’s future, right? Actually, that is not the case at all. The Chief Economist at CoreLogic, Frank Nothaft, commented on this. Despite the fact that CoreLogic is confident that home prices will drop in Las Vegas by 2021, Nothaft says that real estate investors and homeowners shouldn’t expect the situation to get anywhere near as bad as it did during the 2008 housing market crash:I expect price declines to be temporary. They will turn around and start to rise gradually after that.And remember, the price decline will be comparatively small (6.5%) to what we witnessed on the national level in 2008 – a drop of around 33%. Additionally, the boost in inventory is also not expected to be high enough to cause a crash.#5. Las Vegas Will Still Be a Good Rental Market Next YearBesides the prospect of a housing market crash, you might also be wondering “Is Las Vegas a good rental market?” Again, with talk of dropping prices, some panic and think they need to avoid such a market. However, a real estate investor who plans on buying and holding a Las Vegas investment property and renting it out for cash flow shouldn’t worry about a slight, temporary decline in prices.Right now, Las Vegas real estate investors are enjoying high rental income and good returns, according to Mashvisor’s data:Traditional Rental Income: $1,315Traditional Cash on Cash Return: 2.3%Besides those return on investment statistics for the average Las Vegas rental property, more inventory, motivated sellers, and a decline in prices is a great environment to snatch up real estate deals. The 2021 Las Vegas real estate market will be a great place to invest in real estate, based on these trends.The only advice here would be to keep an eye on the unemployment rate. Generally, investors should choose a real estate market with a low unemployment rate. If 2021 brings with it a COVID-19 vaccine and the hospitality industry is able to return to normal, hopefully, unemployment rates will recover.#6. These Are the Best Neighborhoods in Las Vegas for 2021So where should you buy a Las Vegas rental property in this vast residential real estate market? Our next Las Vegas housing market prediction points to 10 of the best neighborhoods in Las Vegas for real estate investing. The following neighborhoods made this list because they currently provide investors with good cash on cash return and are forecast to do so in 2021.#1. WinchesterMedian Property Price: $275,177Price per Square Foot: $161Price to Rent Ratio: 23Traditional Rental Income: $1,007Traditional Cash on Cash Return: 2.8%#2. North CheyenneMedian Property Price: $364,531Price per Square Foot: $193Price to Rent Ratio: 24Traditional Rental Income: $1,243Traditional Cash on Cash Return: 2.7%#3. Downtown EastMedian Property Price: $241,638Price per Square Foot: $165Price to Rent Ratio: 19Traditional Rental Income: $1,052Traditional Cash on Cash Return: 2.7%#4. Cultural CorridorMedian Property Price: $236,233Price per Square Foot: $158Price to Rent Ratio: 20Traditional Rental Income: $968Traditional Cash on Cash Return: 2.6%#5. BuffaloMedian Property Price: $408,724Price per Square Foot: $186Price to Rent Ratio: 28Traditional Rental Income: $1,214Traditional Cash on Cash Return: 2.5% Find Cash Flow Properties Now#6. SunriseMedian Property Price: $234,438Price per Square Foot: $161Price to Rent Ratio: 23Traditional Rental Income: $837Traditional Cash on Cash Return: 2.5%#7. HuntridgeMedian Property Price: $288,126Price per Square Foot: $184Price to Rent Ratio: 24Traditional Rental Income: $1,011Traditional Cash on Cash Return: 2.4%#8. Sunrise ManorMedian Property Price: $254,927Price per Square Foot: $161Price to Rent Ratio: 25Traditional Rental Income: $851Traditional Cash on Cash Return: 2.3%#9. Rancho CharlestonMedian Property Price: $387,426Price per Square Foot: $182Price to Rent Ratio: 26Traditional Rental Income: $1,246Traditional Cash on Cash Return: 2.3%#10. East Las VegasMedian Property Price: $225,663Price per Square Foot: $155Price to Rent Ratio: 25Traditional Rental Income: $758Traditional Cash on Cash Return: 2.2%Ready to Start Investing in Las Vegas Real Estate?Buying a rental property in the Las Vegas real estate market 2021 could mean deals and cash flow. Start your search here at Mashvisor.Related: The Best Way to Find High Cap Rate Las Vegas Real Estate for Sale Start Your Investment Property Search! START FREE TRIAL Buyers MarketDistressed PropertiesLas Vegas NVMortgageNeighborhoodProperty Prices 0FacebookTwitterGoogle +PinterestLinkedin Sylvia ShalhoutSylvia is the Content Marketing Manager at Mashvisor. As a real estate writer, she has been covering topics for the beginner and advanced real estate investor, helping them make smarter decisions as well as real estate agents looking to take their business to the next level. Previous Post Seattle Housing Market Forecast for 2021 Next Post Presidential Election 2020: How Will It Impact Real Estate? Related Posts Brexit Effect on Investment Properties and Airbnb Occupancy Rate Is it a Buyer’s Market or Seller’s Market? The Best Father’s Day Gifts for Real Estate Investors Tampa Real Estate 2018 vs. Tampa Real Estate 2017 The U.S Housing Market Is the Best Real Estate Market for Offshore Real Estate Investors How Millennials Are Shaping the Vacation Rental Industry 4 Real Estate Market Trends in 2016 You Haven’t Read About Atlanta Real Estate Market Forecast 2020 5 Spring Real Estate Market 2021 Trends Will the 2020 US Housing Market Be a Seller’s Market or a Buyer’s Market? The Future of Real Estate: 4 Issues to Watch Out for in 2019 What Is AI and How Is It Transforming the Real Estate Industry?