A struggling tourism industry and ongoing economic uncertainty are continuing to cloud the outlook
Las Vegas experienced the nation’s largest housing inventory increase in July, with supply rising 31% year-over-year as economic uncertainty and a struggling tourism industry kept potential homebuyers away from the market, according to a Redfin analysis.
The supply surge marks a full year of inventory increases exceeding 20% for the Las Vegas metro area, roughly triple the national rate, the real estate brokerage reported. Meanwhile, pending home sales dropped 8.6% and closed sales fell 8.5% compared to the previous year, creating a significant imbalance between supply and demand.
Homes that do sell are taking considerably longer to find buyers. The typical Las Vegas home required 55 days to go under contract in July, 16 days longer than the same period last year.
Several factors are driving the market slowdown. Most significantly, housing affordability has reached critical levels, with only 20% of Las Vegas listings considered affordable for families earning the local median income. The typical household would need to spend 40% of their income to purchase the median-priced home, well above the 30% threshold generally considered affordable.
“Las Vegas is feeling the effects of affordability pressures and elevated mortgage rates more acutely than many other markets, partly because the city’s economy is dependent on a slowing tourism industry,” said Chen Zhao, Redfin's head of economics research.
Drop in visitors
The tourism sector, which anchors Las Vegas’s economy, has declined significantly. Visitor numbers dropped 11% year-over-year in June, largely attributed to reduced Canadian tourism following tariff implementations, according to reports cited in the analysis. Economic instability has led Americans to reduce discretionary spending on travel and entertainment.
The supply-demand imbalance has begun affecting home prices. The median Las Vegas home sold for $445,000 in July, marking the first year-over-year decline since September 2023, down roughly 1%.
Opportunity for buyers
Some market participants see opportunity in the current conditions. Cherra Bergman, a Redfin Premier agent in Las Vegas, reported increased buyer activity as mortgage rates declined. “Buyers who put their search on hold over the last year are resurfacing,” Bergman said. “Savvy buyers know there are a lot of homes on the market and that they can get a better deal now than two or three years ago.”
Prospective sellers are responding to the buyer’s market by stepping back. New listings fell 5.7% year-over-year in July, the second consecutive monthly decline after nearly two years of increases, as would-be sellers recognize the challenging market conditions and stagnating prices.
Despite the overall decline, recent data suggests modest improvement, with year-over-year sales declines narrowing from 13.7% in May to 8.5% in July.
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