Samantha Hampton knew it was time to buy when she learned in October that monthly rent for her two-bedroom Las Vegas apartment would jump from $785 to $1,175. Homeownership had never been a priority for the 29-year-old, but if she was going to shell out almost $5,000 more for housing in the upcoming year, she figured she might as well put it toward a place to call her own.
And so the house hunt began.
Hampton is far from alone. Las Vegas had the country’s largest increase in single-family rental rates — 6.6 percent from October 2017 to October 2018, more than twice the national average, according to CoreLogic data. But Hampton was leaving one hot market for another: Las Vegas home prices are rising even faster, up 11.3 percent in November 2018 since the year prior. The median value of homes sold that month was $295,000, near the pre-recession amount.
Rising prices have largely been celebrated in a region that was gutted by the Great Recession. But while the housing market may have recovered, incomes of those looking to buy have not. According to the latest income data from the U.S. Census Bureau and home price figures from Zillow, home values in the Las Vegas metro increased 83 percent from 2012 to 2017. Median household income, meanwhile, rose a measly 1 percent.
Vegas’s housing-to-income disparity is extreme but not lonesome. Phoenix home prices rose 54 percent in that period, but incomes rose just 7 percent. In San Francisco, home prices were up 70 percent while incomes climbed 20; In Seattle, the gap was 73 percent to 15.
Increasingly, homeownership around the West is a pursuit of the affluent, a trend evident with first-time buyers who can’t cover a 20 percent down payment and cannot rely on the equity of their existing home to close the gap. Chris Bishop, president of the Greater Las Vegas Association of Realtors, said agents have seen an uptick in the number of people relying on “gift funds” from family members for their down payments. Even some government assistance programs designed for first-time buyers have been rendered largely useless. In neighboring Henderson, a city-run program had the modest goal of helping four low-income families buy their first home with down-payment and closing-cost assistance. “Unfortunately,” a city report reads, rising home prices and all-cash buyers meant that “no one who qualified for the program was able to utilize the program” last year.
Hampton was worried she might be one of the potential buyers priced out of the Vegas market. Price growth has slowed in Las Vegas, but she doesn’t see a market crash looming and wanted to buy while she could. Hampton was realistic about what she could afford on a cashier’s salary and focused on a neighborhood where the older homes are relatively affordable, at a median value of $223,700. Her wish list was minimal. Hampton looked at seven places but “none of them felt right,” she said. When she finally toured a two-bedroom townhome that met her criteria, she did not hesitate to put in an offer that was accepted.
Despite how out of reach homeownership may seem for many Las Vegans, the allure remains.
“I just can’t wait to decorate and paint the way I want,” Hampton said. “It’s mine.”
This story first appeared in the Bitterroot newsletter.
