Las Vegas Realtor Noah Herrera is noticing a few eerie similarities between the housing market before the 2008-09 economic crisis and the current scene.
Before, it was Wall Street packaging risky subprime mortgages into mortgage-backed securities. Now it’s Wall Street buying as many entry-level homes they can get their hands on, renting them out in alleged predatory fashion and packaging them as rental-backed securities.
“Wall Street is destroying Main Street — again,” Herrera said. “And it’s kind of hard to stomach because at the end of the day, this is capitalism.”
Herrera is not alone, as many other Las Vegas Valley real estate agents are decrying new players in the game — multibillion-dollar Wall Street hedge funds and cash-flush investors — buying up properties and pushing regular homebuyers out of the market with aggressive buying and rental tactics.
Investors and hedge funds currently own roughly 80,000 single-family homes in Clark County, Nevada, which is about 14 percent of the county’s housing stock of 563,000, according to Shawn McCoy, director of UNLV’s Lied Center for Real Estate. These same groups have made nearly 10 percent of all home purchases in the county since 1988.
McCoy defines a hedge fund as any entity that has bought more than five properties in the past 10 years.
According to data McCoy pulled from the Clark County Assessor’s Office, on average since 2012 approximately 13 percent of single-family homes sales were made by investors.
Investor purchasing hit its peak in 2021, when they accounted for nearly 18 percent of all home sales in the valley. This share declined by approximately 1.5 percentage points moving into 2022 and the first quarter of 2023.
However, since 2021 the share of homes purchased by investors exceeded 20 percent in 20 different ZIP codes in Southern Nevada — three in particular making up the bulk of the purchases, 89149 (northwest Las Vegas Valley), 89031 (north Las Vegas Valley) and 89113 (Enterprise).
In total, since 1988, 91,644 single-family homes in Clark County have been purchased by investors. McCoy said many investors often use different LLCs to purchase properties to limit liability, so his data may in fact be a conservative estimate and the number of investor purchases higher.
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