In the past, Las Vegas brought to mind casinos, mobsters, gonzo journalists and Howard Hughes. But over the past thirty years, the sleepy desert outpost has seen explosive population growth as gambling has become an increasingly big business – after a brief drop in 2002, gaming revenues have picked up significantly over the past several years – and the US population shifts towards the warmer climates of the Southwest. According to Dr. Bengte Evenson, a professor with the Center for Business and Economic Research at the University of Nevada, Las Vegas, 105,000 people moved to Las Vegas last year alone, continuing a population trend that began in the 1950s and accelerated in the 1990s.
The US Census Bureau estimates the population of Clark County, which encompasses “The Strip,” was 1.6 million in 2003, up almost 15 percent from 2000. From 1990 to 2000, the number of residents surged by 85.6 percent, representing a jump from a mere 740,000 people to 1.4 million by the end of the millenium.
The tremendous population growth has no doubt helped boost the Las Vegas residential market, which saw an average increase of $40,000 in the prices for new and existing homes between January and June of 2004.
Evenson notes that towards the end of 2004 and into early 2005, housing prices leveled out a bit, before continuing to increase at more moderate levels. “We take it as a good sign that there has been a correction,” she says. “Some kind of a slow down has occurred. We're back into more normal growth.”
In the first six months of 2005, for example, the price of an existing home increased between $7,000 and $10,000. New home prices saw an increase of about $20,000 over the same time frame.
Evenson says that any possible drop in Las Vegas housing prices largely depends on whether or not population growth in the city can be sustained. Unlike days of old, when the city was a rest stop for transients, today it seems that many people coming to Vegas plan on sticking around.
“When you compare monthly [population] inflows to monthly permits for new homes, it looks like we might not be as out-of-whack with regard to the recent spike in prices,” says Evenson.