Las Vegas uber luxury market sets record in 2020 despite pandemic
Las Vegas and Southern Nevada has not only blown away records on its luxury market for 2020 that are up 38 percent for $1 million and above, but the uber-luxury market of $4 million-plus has hit heights never seen before in the valley and doubled its performance from 2019.
And it’s all happening during a COVID-19 pandemic.
The December numbers from the Multiple Listing Service show there were 129 sales of homes and condos of $1 million and higher submitted to the MLS from the Las Vegas Valley, Boulder City, Pahrump and Mesquite. Most luxury properties listed on the MLS are existing homes, condos and town homes, with a limited number of new homes.
That shatters the record of 98 in November. Many buyers were trying to close by the end of 2020 for tax purposes, and that created a frenzy in recent weeks.
For 2020, there were 824 sales of $1 million or more on the MLS. The previous record was 596 set in 2019, according to Forrest Barbee, corporate broker with Berkshire Hathaway HomeServices Arizona, who tracks the luxury market and provided the stats for the year.
That’s not all for records set. There were 13 sales of homes at $5 million and higher in December. There were 14 during all of 2019, and the December numbers bring the 2020 total to 32 for the year, Barbee said.
That’s quite an ending after luxury sales dipped to 35 in April and 36 in May before a strong rebound over the summer. The COVID-19 pandemic appears to have shaken people to their core in that they want to change their living conditions and create normalcy, and moving and upgrading homes does that, Barbee said.
“I don’t think last spring that anybody was looking at this type of a rebound when the pandemic is worse than ever,” Barbee said.
In breaking down luxury sales in the Las Vegas Valley only and excluding other parts of Southern Nevada, Realtor Rob Jensen of the Rob Jensen Co. said there were 597 sales of $1 million to $1.99 million, up from 340 in 2019. That’s a gain of 32.7 percent.
In the $2 million to $2.99 million category, there were 114 sales compared with 71 in 2019, Jensen said. That is up 60.5 percent from 2019. There were 49 sales compared with 42 for $3 million to $3.99 million. That is 16.6 percent higher.
In the category of $4 million and above, there were 53 sales, up from 26 in 2019, a gain of 103 percent, he said.
“That points to the high-income and high-net worth people having the flexibility to move to where they want whether they are escaping California for not just taxes but to get out of a state that’s closed,” Jensen said. “The ultra-wealthy are taking advantage that Las Vegas has to offer.”
Jensen said that of all of the categories, the one of $4 million and above has increased the most. He said that represents business owners and executives and those in the tech industry who are able to work from afar and people from California and those escaping the East Coast and high-rise living.
“They either have the financial wherewithal to work from anywhere or don’t have to work in the first place,” Jensen said. “It’s not like they’re coming here to work in a casino or got a new job in Las Vegas. I’m seeing these people being captains of industry and ultra-high-net-worth people that can live anywhere.”
Realtors aren’t expecting demand for luxury properties to slow down in 2021 but are concerned if there is enough supply to meet it.
The National Association of Realtors projects Las Vegas sales will increase by 12 percent in 2021, and Barbee added, if that’s the case, it will be driven by the luxury market.
“I think we’re looking at more of the same in 2021,” Barbee said. “There doesn’t seem to be any slowdown. Demand is so strong out there. Half of the luxury sales in December were with cash, but it’s also easier to get jumbo loans. We were having a big problem with that a couple of years ago.”
The momentum right now is so strong in the luxury market that even if things were to slow down, it would take even six months to feel the effects of it, according to Diane Varney, global luxury-certified specialist with Coldwell Banker Premier Realty.
“We have record-breaking sales, historically low inventory, low interest rates and an influx of people from states like California because we have taxes here,” Varney said. “I see the demand holding through the whole of 2021. We’re on the map in Las Vegas in terms of luxury.”
Varney said the buyers prefer the guard-gated golf course communities such as The Ridges, MacDonald Highlands, Southern Highlands and TPC Summerlin. And it’s not only out-of-state residents but Las Vegas residents are moving again as well and seeking either new or existing luxury homes. A lot of people with high incomes work from home, and many can’t pass up buying luxury homes with interest rates in the 2-plus percent range because their money goes further, she said.
“Their needs have changed,” Varney said. “They may need an extra room for a next-gen person, a college student or elderly relative. They may need to downsize because they want to go to a two-story luxury home to one-story luxury home to simplify their life. They may need something grander, so in that case they’re moving up. The work-from-home space is really important, and builders have done an excellent job of meeting those needs in making sure that attractive home office is there, that next-gen site and more closet and garage space. Their kids are not in school and need the room to educate them in the house. They have the means and have to be living in a home that functions for them properly. That’s changed with COVID.”
Barbee said buyers want functionality more than ever. He said he is one of those people who upgraded during the pandemic to get more space — two offices — and moved from a Summerlin town home to a single-family home in Lake Las Vegas to have more open space around him and his wife.
Shannon Smith, a broker/salesman with Realty One Group, said based on the momentum of 2020 and vaccine and economic improvement on the horizon, 2021 should be a good year.
“I’ve been in the business for 12 years, and 2020 has been my best year ever despite the pandemic,” Smith said. “The California exodus is a real thing. Maybe 50 percent of my clients are coming from California who are looking for properties $1 million and above.”
A lot of Californians tend to want to live on the south end of the valley to make it easier to get on the Interstate 15, Smith said. That includes Southern Highlands and Seven Hills and Henderson, he added.
“I have clients (who came) into town on the weekend of New Year’s (Eve) from the Bay Area who are 20-year Raider season ticket holders,” Smith said. “They are using that as an excuse to buy a property between $1 million and $2 million and use it as a second home.”
Gene Northup, global real estate adviser with Synergy Sotheby’s International Realty, said he expects to see continued wealth moving to Las Vegas from high-density areas such as Chicago, Seattle and cities in California and Colorado.