LAS VEGAS – A report released this week by the Nevada State Apartment Association (NVSAA) shows local apartment rents starting to slide as the coronavirus hit Southern Nevada.
The report, issued by the NVSAA based on data provided by CoStar, shows daily average
asking rents in the Las Vegas metro fell by about 1% between March 16 and 26 – and even more for 4- and 5-star apartments. For the first quarter of 2020, year-over-year rent growth declined to 1.4%, down from a 7.2% growth rate during the same time one year ago.
From 2015 to 2019, local rents increased steadily. Those gains are now slowing, with asking rents during the first quarter of 2020 averaging $1,079 per month, compared to $1,064 one year ago.
“Apartment rental activity usually increases as the weather warms up,” NVSAA Executive Director Susy Vasquez said. “But with stay-home orders in effect since mid-March and many local residents dealing with layoffs and pay cuts, the economic engine that fuels housing momentum has stalled. We expect to see more dramatic changes to these statistics in the coming months.”
Before the coronavirus crisis and subsequent closures, Southern Nevada’s economic fundamentals were strong and improving, bolstered by sustained job and population growth. Population growth in Southern Nevada has been more than double the national rate for the past several years, with the bulk of that growth coming from in-migration. Until the crisis started, the report said this improving economy was boosting apartment demand.
For the first quarter of 2020, the average vacancy rate for local apartments was 7.1%. That’s up from 6.5% one year earlier, but down from nearly 11% during the height of the Great Recession.
Apartment development through the first quarter of 2020 continued to be heathy, with 3,836 units under construction in the Las Vegas area. By comparison, more than 3,000 units were delivered to the local market in 2017, the peak year for apartment construction so far this cycle. Nearly half of these new units are being built along the southern portion of the 215 Beltway between the Henderson, Enterprise, Spring Valley and Summerlin areas.
This report is provided by the NVSAA based on data from CoStar, a leading provider of commercial real estate information.
About the NVSAA
The Nevada State Apartment Association is the voice of the multifamily housing industry in Nevada. The nonprofit organization provides a variety of services to its 894 community, property management and business partner members statewide, including legislative support, education and community outreach. NVSAA is committed to promoting and supporting the diversity, integrity and success of its members and their industry. For more information, visit www.NVSAA.org.