The existing home market has faced significant challenges over the past few years, especially in Las Vegas. While the broader economy has so far avoided a recession, the housing market hasn't been as lucky. In 2022, Las Vegas saw a 28% drop in single-family home sales compared to the record-breaking year of 2021, and things only worsened in 2023, with a nearly 40% decline from the 2021 peak. 

Even when compared to more typical years, like 2019, 2023 sales were down 27%, and this trend mirrors the national picture. In fact, across the U.S., only about 4 million homes were sold in 2023, a level we haven’t seen since the years following the housing bubble burst. 

The downturn has carried over into 2024, but there are signs that the market might soon see improvement. After three years of below-average sales, many potential buyers and sellers have been waiting for the right moment to act. On the demand side, high prices and limited affordability have sidelined many buyers, leaving the market mostly to those with significant equity or those who had no choice but to buy. 

A recent survey from the National Association of Realtors (NAR) sheds some light on this trend. In 2024, 43% of homebuyers said they bought because it was simply the right time, while 24% had no choice but to purchase. These figures differ from pre-pandemic years, like 2019, where 50% of buyers said it was the right time, and only 17% felt compelled to buy out of necessity. With discretionary buyers holding back, builders have taken advantage by offering incentives, such as rate buy-downs, to lure in those who could make the leap. 

While the ultra-low interest rates of the pandemic may have pulled some demand forward, many experts believe that after three years of sluggish sales, pressure is building. Families grow, downsize, or relocate, and those changes can't be postponed forever. As a result, demand for homes is likely to rise, especially if mortgage rates start to drop below 6%. 

A survey from Bankrate found that over half of homeowners would only feel comfortable buying if rates fall below 6%. Although the 3% rates of the pandemic are likely gone for good, a stable rate environment of around 6% could be enough to bring more buyers back into the market.

Las Vegas seems poised for a recovery, thanks to strong job growth and inbound migration. Since the pre-pandemic peak, the city has added nearly 93,000 jobs, and major companies like Haas Automation, Warner Brothers, and Sony are planning to hire thousands more. Brightline’s rail project is also expected to create 3,000 jobs, while the Las Vegas Convention and Visitors Authority (LVCVA) projects the need for an additional 14,000 to 17,000 hospitality jobs as more hotel rooms are built.

Placer.ai reports that newcomers to Las Vegas tend to be more affluent than existing residents, with household incomes around 20% higher. This influx of wealthier residents, along with an expected population growth of 2%, or about 30,000 to 50,000 people, should help maintain demand for housing. 

With many buyers also needing to sell their current homes, lower mortgage rates could loosen up the "lock-in" effect, encouraging more homeowners to put their homes on the market. Life changes, like growing families or job relocations, also contribute to this pent-up supply, providing more options for buyers who have been frustrated by limited inventory. 

While we may not see a massive surge in home sales, a gradual return to pre-pandemic levels seems more and more likely. As we head into 2025, all signs point to a slow but steady recovery in the housing market. 

As we look toward a promising 2025, it’s important to stay informed and ready for the opportunities ahead in the housing market. Whether you're thinking about buying, selling, or exploring your options, your Coldwell Banker Premier Realty agents is to help guide you every step of the way. Feel free to reach out and discuss how you can make the most of the current market trends.