High-end real estate has long been a refuge for those seeking a luxury estate as an investment, rather than for personal use. When approaching real estate from the investment perspective, what matters most is finding a buyer's market with great opportunity to climb. Increasingly, those hot markets for real estate investors are in second-tier cities, including Las Vegas.
Within secondary cities such as Las Vegas and Nashville, high-end homes are seeing their sales prices rise and their time on market decrease. The data suggests that home buyers are interested in locking down their own guard gated luxury estate before the market continues to heat up. This stands in contrast to the luxury real estate market in other parts of the country, which has cooled off since the new tax code. Elsewhere, luxury homes are slow to move and sell for less than they would have a couple years earlier.
Real estate experts credit a strong economy, robust tech activity, and a favorable tax environment with keeping the Vegas real estate market competitive. Another strong factor is buyers' desire for a positive quality of life–in a community where they can enjoy top-tier amenities, work remotely or with a flexible schedule, and love where they live.
From the investment perspective, buying up homes in these cities is a wise move, because Las Vegas transplants searching for their dream estate will need a luxury rental, someplace they can live while they perform their search. Some home buyers may even prefer to rent, because they can enjoy the high-end lifestyle without assuming responsibility for home maintenance. Rental values are up over 6 percent year over year, and the market is only climbing.
Within Las Vegas, the median asking price for luxury homes rose 8 percent year over year, for an average of $1.15 million. High-end homes sold within 21 days on average, which is 18 percent faster than the year before. Pivoting to the ultra luxury market, premium homes were listed at a median of $1.56 million in January, and by March the median asking price was up $4 million. Homes moved in an average of 31 days.
Nevada as a whole is attractive for homebuyers, because the state has no income tax and extremely low property tax. For luxury buyers, who may be accustomed to higher property and income taxes, moving to Nevada means saving six figures or more per year. With overflow pouring into the Vegas market, luxury buyers are snatching up premier properties while they can. Much of the increased interest in ultra high-end Las Vegas homes comes from Silicon Valley elites, who seek refuge from the overcrowded, high-tax Bay Area.
Builders are so confident about the luxury real estate market in Las Vegas that they're building new homes without first lining up buyers. The message could not be more clear: Vegas is having its moment. The question is, where will you be?