Strong local economies help power home price increases in NYC, Las Vegas

Homes just keep getting more expensive. Prices rose in July, for the fourteenth month in a row, and grew 5% nationally over last year, according to the Case-Shiller index. But something that jumps out is the two metro areas where home prices grew the most last month, both more than 8%: New York and Las Vegas.

Las Vegas has everything you could possibly want, according to Merri Perry. She’s been a real estate agent there for 34 years.

“We have every sports team now, taxes are very low, best places to eat, entertainment’s the best, we have all the concerts,” she said.

She’s not surprised so many people are deciding to move, especially because it’s also still pretty affordable.

“Our neighboring states, like California, home prices are just crazy. And, you know, people want to retire and come here and pay cash and live their best life,” Perry said.

And they are. The 8% jump in home prices in July reflects that, and is second only to New York, where prices rose almost 9%.

Brian Luke, who heads up commodities and real and digital assets at S&P Dow Jones Indices, said people moving from more expensive states are likely a big factor in Las Vegas home price growth.

“The Las Vegas market is, you know, the high tier is still over $300,000 below what is considered low tier in Southern California,” he said.

It’s not quite the same in New York, which has long been one of the country’s most expensive housing markets.

But Ali Wolf at the housing data and consultancy firm Zonda said for all their differences, Las Vegas and New York do have something in common: Strong, growing economies.

“New York is the largest employment hub in the entire nation, and it’s just a diverse labor market,” she said. “Las Vegas right now is still being driven by gaming and tourism. There’s been so much discussion in the economy about the strength in the service sector, we’re seeing that show up in the Las Vegas numbers.”

Both cities have big service sectors and vibrant cultural scenes. And Kenny Lee, a senior economist at StreetEasy, said both took a big hit during the pandemic.

“As these industries continue to recover, the workers in these fields also need housing,” he said.

And, Lee said, that’s likely driving demand for housing in both cities, too.