The COVID-19 pandemic has touched all aspects of daily life and all industries, including the real estate market, which some may believe is suffering from whiplash and a case of déjà vu reminiscent of the 2008 recession.
But because of the statewide shutdown and Gov. Steve Sisolak’s executive order to “Stay Home for Nevada,” a valuable realization emerging from this pandemic is that home is more important than ever. Homeowners and potential homebuyers nationwide now have a deeper understanding and appreciation of their place of residence as not just a roof over their heads, but also a safe place to connect with loved ones, a place to work and learn, and a place to reflect on what really matters.
Now that Nevada’s economy is gradually reopening and getting back on its feet, and with casinos welcoming back guests, homebuilders are also pleased to see an uptick in traffic to new-home developments. While the impact of the pandemic-induced economic slowdown has been severe — particularly in Southern Nevada, which currently suffers from the greatest level of unemployment in the country — there is light at the end of this tunnel.
Yes, thousands have lost their jobs, reflecting how our economy is so reliant on tourism and gaming and that, until a few weeks ago, the world-famous Strip was closed for business for months. However, as air traffic picks up and tourists return, many previously furloughed workers are returning to their jobs.
Over the past several weeks, my colleagues and I have witnessed growth in the market, with new-home sales trending upward. Additionally, consumers are starting to regain their confidence in the market, driven by a desire to buy that is further motivated by interest rates that are at or near historic lows. No one can predict how quickly the economy will rebound, but if there’s anything Las Vegas has shown the world this past decade, it’s resilience.
Despite the pandemic, Southern Nevada is still an exceptional and safe place to live. We offer natural wonders and an array of professional sports teams, all of which will continue to contribute to the local economy and enhance quality of life.
We also have some of the best-selling master-planned communities in the nation. Moreover, Nevada is still advantageously positioned because of its proximity to popular California coastline attractions, and eclipses the Golden State with its more favorable tax climate, better traffic and pollution conditions, and more affordable cost of living.
Additionally, reports indicate that homebuyers may be shifting their interest from urban dwellings to more suburban lifestyles, where residences are more spread out, which allows for social distancing to be more attainable. And according to a recent study released by the Harris Poll, nearly 40% of current city dwellers would consider moving to less densely populated communities.
The last recession took a toll on the health of the valley’s housing market. This time, however, there is one critical difference. When we came out of the last recession, we had an abundant supply of new homes that far exceeded the number of interested and, more importantly, qualified homebuyers. This time around, new-home supply is more limited and more in line with demand. And with demand can come sustainable and possibly even increased value for some homes. This is good news all around for both homeowners and home shoppers.
So while I cannot predict exactly what the future holds, I am optimistic and have faith in our city’s “can-do, get-it-done” mantra and culture, a characteristic that will help all of us adapt to the “new normal” as we move ahead. I look forward to seeing how Las Vegas will reinvent itself in this new era, make a strong and memorable comeback, and once again, welcome visitors — and new homeowners — to our uniquely wonderful city.
Brian Kunec is division president of KB Home and managing member of Inspirada LLC.