Will professional sports boost home prices in Sin City?
Despite a lack of evidence that sports facilities generate higher home prices, many Las Vegas real estate agents are promising that the new facilities for the Las Vegas Raiders and Vegas Golden Knights will do just that.
Trulia released research on the subject earlier this year, concluding that
“New stadiums built in the last decade, by and large, have failed to lift the fortunes of nearby neighborhoods.”
The research team studied home values within a two-mile radius of NFL stadiums across the country.
They looked closely at changes to home values in those areas and found that although “nearly two thirds have higher housing values, on average, than houses in non-stadium neighborhoods,” they failed to find evidence to chalk up those higher values to the existence or construction of an NFL stadium.
The real estate portal’s research agrees with earlier studies of the subject. A 2010 study, for instance, found that “the presence of an NFL franchise has no effect on housing prices in a city.” (Kiel, Matheson, Sullivan).
That particular study also showed that
when a city subsidizes the stadium’s construction (Hello, Las Vegas!), home values in the area actually tumble
Here is something for Vegas homeowners to consider: Since the Raiders returned to Oakland in 1995, and despite Oakland home prices in general increasing, the home values in neighborhoods around the Coliseum average 9 percent below the rest of the city’s neighborhoods, according to Daniel Goldstein at MarketWatch.com.
So, why are Las Vegas real estate agents claiming otherwise?
Local real estate agents and brokers are touting an expected rise in home prices once the two teams are settled here, despite those statistics claiming otherwise. "The football team will likely inspire people from out of town to invest in real estate near the stadium.
As such, Las Vegas is experiencing what’s been dubbed the “Raiders effect,” claims one.
Another Vegas real estate professional is convinced that people will snatch up condos in the area, to rent out to fans who fly in for games.
I guess it’s too much to hope that a local real estate agent would know that the county restricts short-term rentals in its residential areas. And, since this agent is a bigwig in the local Realtors association, it’s even scarier that he doesn’t know this.
“Put simply,” says another agent on his website, “housing prices are expected to go up considerably once Las Vegas finishes construction of its stadium.”
Then, there’s this one who is either pulling information out of his you-know-what or is flat-out lying: “Much like other cities around the country when a new football stadium is built, real estate prices go up in value around the area.”
This is simply not true.
How the teams will benefit Las Vegas
Take a look at the Google satellite shot of the area around where the new Raiders stadium will be built. That big plot of land, west of the 15 (labeled on the map as the Las Vegas Freeway), and north of Russell Rd. is the stadium site.
Then, take a look at the areas surrounding it. As you can see, the new stadium will be surrounded primarily by industrial parks. It's a commercial agent's dream-come-true.
The owners of those parcels, not the homeowners located four, five or more miles away, will most likely make out like bandits.
With a business that attracts huge crowds, come the pilot fish. If you’ve ever watched a TV special on whales, you know that they’re typically surrounded by a group of small fish. These are pilot fish, and they feed off the leftovers of their host.
So, we can expect hot and heavy offers to buy all those industrial properties surrounding the new stadium. Fast food outlets, casual dining restaurants, sports bars, souvenir shops, gas stations, convenience stores and – if somebody is REALLY smart – a “gentlemen’s club,” may just make the commercial agent rich.
The residential agent? Not so much, unless of course you specialize in professional athlete relocation (learn how to do that here). But, those guys are all in L.A. and you can bet they’ve already got the Raiders move wrapped up.
So, why the hype?
I’m not sure, but I have a couple of theories. First, it’s wishful thinking. I mean, I thought the same thing – homes here are going to be in great demand – when I first learned the Raiders were coming. Then I did the research.
That so many agents haven’t done the same is rather frightening, really. And, it just lends credence to the “real estate agents are sharks” reputation.
Then, maybe it’s just hype. . .the same “Now is a great time to sell!” or “Now is a great time to buy!” type of hype that makes today’s consumers so suspicious of real estate agents.
To me, it’s dishonest.
This stadium will most likely NOT raise home values in Las Vegas and it’s irresponsible to claim otherwise.
When you’re dealing with what may be someone’s most significant financial investment – real, live regular folk (as opposed to the Buffets of the world), it’s onerous to fling out opinion and speculation. It’s unfair to expect the general public to trust you as an expert when you deal with them as an amateur.
Quite frankly, it’s also embarrassing.
“If you're considering purchasing property in Las Vegas or Henderson, then now is the time to do it before the stadium is finished and prices start rising too quickly,” says the agent who has done not one iota of research, is only thinking of himself and flings out the trite, stupid “NOW IS THE TIME” garbage.
Or, as another Vegas agent says “Now is the time to buy in Las Vegas. When they start putting the shovel in the ground for that stadium and make it real, we're going to see prices go up across the valley.”
The only shovel I want to see is the one needed to rid my city of these agents’ b.s.
I am so disappointed in real estate agents right now.