Las Vegas Economy is a Bustling Hub; What Does this Mean for Las Vegas Real Estate?
Looking back at the Great Recession of this decade, I feel an overwhelming sense of gratitude that the Las Vegas’ economy is recovering. The downturn sounded like walking on bubble wrap with all the popping. However, thankfully those days are behind us, and we can gaze forward with a new appreciation and determination.
That was inspiring, wasn’t it? What is more so inspiring are the signs of recovery all over the valley. Construction projects are starting or renewing, the tourists are back in (almost) full force, and my personal favorite, rising Las Vegas real estate values.
Understanding the Las Vegas Real Estate Market
These are all related; no one indicator is responsible for the rebounding economy. Tourists pay for hotels and spend money locally; business owners pay salaries and rent. Construction brings jobs to Las Vegas, reducing unemployment and increases the need for housing. Increased housing demands lead to higher occupancy rates. Decreased supply of available homes leads to higher rent or home prices. A fun lesson in the law of supply and demand, right?
Steve Wynn, the famed owner of the hotel and casino chain, once said that the best, newest, and most competitive properties make the majority of the money. Now, I do not know if all the developers in Las Vegas are listening to Steve’s cardinal advice, but new and best indeed seem to be the adjectives of choice in Las Vegas real estate evolution.
Commercially speaking, new stores are opening their doors in Las Vegas, and people are buying what the shopkeepers are selling. Sales tax from those purchases is a significant contributor to the Las Vegas revenue stream. As is property tax paid by building owners. Busy shop owners hire employees, 3,800 or so retail-related hires in the first quarter of 2015, according to local analysts.
Higher employment rates mean more people are working, and when they are working more, they have more money to spend on housing. Let’s pause here for a moment. If you are a venture capitalist, this is relevant to you. Multi-family units would be a key investment strategy for the portfolio. Consider building or renovating in areas near new or expanding retail centers.
Sporting events score points for helping the economy as well. The Ultimate Fighting Championship organization calls Las Vegas home. The company’s headquarters are in Las Vegas, employing 310 residents and hosts several events throughout the year. Included in that list is International Fight Week, a Mixed Martial Arts extravaganza that packs a $190 million punch for the Las Vegas economy.
Where is the Las Vegas Real Estate Market Going?
Speaking of sports and the Las Vegas economy, the University of Nevada Las Vegas is part of a $10 million research program that is investigating genetic code to enhance athletic performance. The Nevada Institute of Personalized Medicine is conducting the study, and working with other companies, like Switch Communications, to create a personalized approach to medicine.
Switch is a data management company whose headquarters are in Las Vegas, with a mega-list of Fortune 500 companies as clients. One such client is the online auction site, eBay. Because most of its data is stored onsite at the Switch facility, eBay is investing money in data management equipment at the Las Vegas site.
Switch also partners with local community colleges to form curriculums for students based on computer science and technology. Switch Corporation also provides angel funding for local tech-based start-ups, an offshoot of the Downtown Project. Emphasis on incubating technology companies is critical to the Downtown Project’s success as well as the diversification of Las Vegas’ economy.
New happenings around town are:
- Maverick Aviation Group is building a new terminal at McCarran International Airport.
- Premium Waters is opening a bottling facility in Las Vegas. The Minnesota-based company plans on hiring 29 new employees and investing $10.7 million in capital improvements over two years at their Cheyenne Avenue facility.
- SpeedVegas, a $30 million project being built on 100 acres south of Las Vegas
Tech companies find the close (somewhat) proximity to Silicon Valley without the California sticker shock appealing. Software maintenance firms like Rimini Street in the Hughes Center are close enough to their IT facilities in California but prefer the cost advantages of Las Vegas. They can afford to have thousands of square feet for office space in Las Vegas thanks to tax-free corporate incomes and the lower Las Vegas real estate prices.
Connect with Our Team Today!
These are all lights at the end of the tunnel for us Las Vegas’ locals. We are happy to see the economy and real estate bouncing back from the trying economic times. Our top priority is to understand your path, where you came from, and where you are going in regards to real estate. Let’s start the conversation today.