Investors buy up houses in Las Vegas with $1B summer shopping spree

Corporate investors continue to grow their portfolios of houses across Las Vegas, with $1 billion in purchases this summer during the biggest buying spree in the country.

The number of homes bought by corporate investors in greater Las Vegas jumped 27.9 percent in the third quarter ending in September, from the prior period, the Las Vegas Review-Journal reported, citing figures from Redfin.

Investors snapped up $1.02 billion in homes at an average price of $420,000, though the volume of purchased homes was undisclosed.

The surge in investor purchases in the desert city led Seattle, at 21.8 percent, and San Jose, at 19.5 percent.

Meanwhile, investor purchases across the U.S. have “plateaued,” according to Redfin, with 2.3 percent fewer homes this quarter, down from an all-time high at the dawn of the pandemic.

The pace of investor buying in Las Vegas continues unabated. Investor purchases in greater Las Vegas shot up 27 percent year-over-year in the second quarter ending in June.

Redfin defines an investor purchase as a deal made by a company rather than an individual. The total number of investor home buys, and the companies involved in the deals, were not disclosed. 

Last year, the University of Las Vegas reported that investors owned 15 percent of the homes in Clark County — a figure that likely rose this year. The study, conducted by UNLV’s Lied Center for Real Estate, found that investors owned 25 percent of the homes in North Las Vegas.

Investors generally target low-priced homes, with cash offers that compete with first-time buyers. At the same time, few young adults in Las Vegas are buying homes, with many being outbid by Baby Boomers in a sizzling home market.

“Low-priced homes are appealing to investors mainly because they cost less,” data specialist Dana Anderson stated in the Redfin report. “Because of their relatively low price, investors who buy them have a bigger pool of buyers if they’re looking to re-sell, and a bigger pool of renters if they’re looking to become a landlord.”

She said the slowing of investor purchases nationwide is telling, given the roller coaster housing market since the pandemic.

It’s “harder for investors to buy homes, then sell them for a big profit, than it was during the pandemic because home prices and loan costs are high,” she said.

Las Vegas, however, has one of the smallest investor capital gain margins for home sales, according to Redfin. The city ranks second in the nation, at 34 percent, behind Phoenix, at 32 percent. 

In contrast, investors made approximately 135 percent in gains in Detroit in the third quarter. In roughly half of the metros in the country, investor median capital gains declined year over year.

— Dana Bartholomew