The luxury real estate market will intensify in 2022
Editor’s Note: This year, we launched a new section called “Real Estate Insights”. We invited some of our local real estate experts to influence different market segments. This is the first of a series that we hope to broadcast throughout 2022.
We’ve never experienced a year like 2021. In case you don’t remember, we said that at the end of 2020. I expect the Las Vegas luxury market to get hotter in 2022 and remain so for at least several years.
Luxury homes continue to outperform the global market. Last year set an all-time high for luxury home sales in Vegas priced over $ 1 million (1,557 homes) – doubling the number of those homes sold in 2020 (766 homes) and more than tripling the number of million dollar home sales in 2018 (430 units).
The luxury real estate buying boom started in 2020 and intensified in 2021. Insatiable demand has depleted Vegas luxury stocks and put upward pressure on prices. The luxury real estate boom was the driving force behind a combination of factors that pushed home to come first. Some of them are:
■ The richest buyers move to Las Vegas.
■ Historic growth in wealth due to cryptocurrency gains (yes, I said it!), Soaring stock markets, rising house prices and increasing savings.
■ Historically low mortgage rates.
Buyers searched for safe places to put their wealth and, due to the pandemic, redesigned the home as multi-functional spaces for work, play and sanctuary. They were looking for new locations, a better living environment, less taxable climates and a higher level of community security.
The question now is: will 2022 build on this unprecedented momentum?
The demand for luxury real estate continues to grow in our valley. It is about to put more pressure on our market. For this reason, I believe 2022 will take Las Vegas to new heights in all aspects of the luxury market. If we can quench the thirst.
The unknown in the Vegas luxury market is how we solve the low inventory crisis. The buyers are there.
If we don’t ship, they buy anyway, but can choose to buy in a competing state tax-free if there aren’t enough luxury real estate options for them in Las Vegas.
This year is the year for luxury real estate to rise to the occasion and challenge in Las Vegas!
If we can, and I hope we will, here are some key trends that I think we can look forward to in 2022 in the Las Vegas luxury real estate market.
■ New luxury price thresholds
Lower inventory levels, combined with strong demand for sought-after properties, has pushed prices up across all luxury price points. As a result, luxury price points have risen in Las Vegas. In 2018, the price of entry-level luxury homes hovered around $ 750,000, but are now closer to $ 2 million. The luxury market grew 25% in 2021 and the barrier to entry into luxury has increased significantly since 2018. I think 2022 pushes the luxury price threshold above $ 2 million.
■ Wealthy international buyers
While Las Vegas doesn’t see luxury international buyers like Seattle, San Francisco, Los Angeles, and New York, I will personally be keeping an eye on what wealthy international buyers will do now that travel restrictions to the United States are in place. lifted. And, with low inventory levels and turnkey properties demanding a premium, we might see some wealthy buyers look to adjacent ambitious markets like Las Vegas or adjust their expectations and buy properties that need a little bit of attention. job ? Something that I think savvy domestic buyers are doing and should continue to do.
■ Strong demand for turnkey luxury properties and new builds
Turnkey properties generate demand and can fetch the highest prices. Recent supply constraints in the construction industry – from labor shortages to material increases for lumber, concrete and tile – have only amplified demand for properties turnkey and newly built. In 2022, I think this trend will continue. Coming back to that thought, I think the biggest winners in this category for 2022 could be the smart resellers who make their homes look like new, by renovating, modernizing and manufacturing their home turnkey for resale so that ‘they strike while the iron is hot.
■ Secondary residences and high-rise buildings
Second, homes are becoming more and more popular among experienced homeowners. I think there is a lot to be done in the long term in the skyscrapers of Las Vegas as well. Second homes and condos, which were largely overlooked during the pandemic due to proximity to people and living attributes, could start to be in high demand again as housing prices continue to climb. Current trends lead me to believe that the condominium market will heat up. With such a tight housing market, condos are expected to become an increasingly popular option for people looking to purchase property. I would expect that many millennials who are hoping to move up the real estate ladder will focus on properties like condos, as there will be less competition for this type of property to begin with.
■ Californian migration will continue
The massive California-to-Vegas migration that began in 2018, accelerated in mid-2020, was still in effect throughout 2021. It’s not that California’s population is declining. It just isn’t increasing at the same rate as it once was. California’s population in 2019 was 39.75 million. According to the results of the 2020 US Census, this population in 2020 was 39.538 million and California’s population in 2021 is estimated at 39.23 million. I see the great migration from California to Las Vegas continuing into 2022, that’s for sure. If the proposed new California wealth tax is passed, the pressure on luxury real estate in Las Vegas will be even greater than expected. California also continues to offer an “exit tax” which is not yet enforced. The more tax initiatives California offers to its wealthy residents, the more Californian neighbors one can expect to have in Las Vegas.
If we are to continue to elevate our real estate values and overall community experience, we need to support and bring in world-class developers and more new projects that will attract the kind of buyers and the prices we have been able to offer. attract, lately. Las Vegas is an exciting city. The years to come will be an exciting time to live here and be part of its continued phenomenal rise.
Happy New Year and may 2022 bring you health, happiness and luxury real estate in Vegas!
Kristen Routh-Silberman, MBA, Real Estate Agent, is a partner at Corcoran Global Living.