Uncovering 3 Quiet Yet Powerful Buyer Trends
September 2023 Market Insights
We've consulted with Zillow's top-notch economists and researchers to bring you three under-the-radar buyer trends that are subtly shaping the Las Vegas real estate scene.
1. The Rise of First-Time Home Buyers
Hold onto your hats; first-time home buyers are becoming a force to be reckoned with. Did you know that they now make up nearly half of all purchasers? That's a significant shift from just two years ago when they comprised only 37% of the market.
Why the sudden surge? Well, with interest rates on the rise, homeowners are holding onto their properties, which has led to surging rents. The cost of renting has climbed faster over the past two years than ever before, and there's a higher number of folks in their early-to-mid 30s—the prime age for home buying. Plus, three out of four buyers have been diligently saving for their down payments, the highest percentage since 2018. Higher mortgage rates are incentivizing this behavior, especially among first-time buyers who may not have the luxury of tapping into previous home sales.
But here's the clincher: nearly a third of these eager buyers have been denied financing at least once, especially among the younger generations. Gen Z and Millennials lead the pack with denial rates of 42% and 40%, respectively. This is where we come in as their trusted real estate agent. We work closely with preferred lenders to ensure our clients are ready when it counts. A referral to a mortgage lender can be one of the most valuable services we offer, especially for first-time buyers.
2. Climate Consciousness on the Rise
Climate change isn't just a topic for scientists and environmentalists anymore—it's now a significant consideration for homebuyers. In fact, more than 80% of prospective home buyers are factoring in climate risks as they search for their dream homes. Their primary concerns revolve around flood risk, followed by wildfires, extreme temperatures, hurricanes, and droughts.
Younger home shoppers, in particular, want assurance that their homes will stand up to rising waters, extreme heat, and wildfires. Take flooding, for instance—a 2021 study revealed that nearly 4.3 million U.S. homes face substantial flood risk. To add to the complexity, flood damage isn't covered by most homeowner insurance policies, and in some areas, securing a mortgage may necessitate purchasing flood insurance from the National Flood Insurance Program.
So, what's your takeaway here? Get familiar with the climate threats specific to the Las Vegas area. In some regions, insurance premiums are skyrocketing, while in others, coverage options are dwindling. Being well-informed on these developments will help you on your home buying journey.
3. High-Priced Homes Are Holding Their Ground
While you might assume that high-priced homes would be the first to feel the market's jitters, think again. Sales of the priciest one-third of homes have actually declined less than their more affordable counterparts in 28 out of the 50 largest metro areas—Las Vegas being one of them
Recently, sales of these premium properties have shown signs of life after a somewhat sluggish period. Price growth remains strongest for less expensive homes, but the gap is narrowing. Nationally, top-tier home sales rose by 6% from May to June, while bottom-tier sales dropped by 2%. This trend has held steady since February, with the gap widening in May and June.
What's your move? We will always double-check the relevant sales of like-property. Depending on the price point of your transaction, buyers and sellers in certain markets may need to adapt their strategies accordingly.
If you need more detailed info or have specific questions about these trends, don't hesitate to reach out. Your success in the Las Vegas real estate arena is our priority, and we're here to help you shine!