RENO – A report released this week by the Nevada State Apartment Association (NVSAA) shows apartment rents in the Reno-Sparks area are still growing faster than the national average as demand reaches record levels.
The report, issued by the NVSAA based on data provided by CoStar, shows apartment rents in the Reno-Sparks area increasing by 5.4% through the end of 2020 compared to one year earlier. Asking rents during the fourth quarter of 2020 averaged $1,328 per month, up from $1,303 per month during the third quarter and up from $1,240 one year earlier.
That compares to the national average apartment rent of $1,373 per month during the fourth quarter, which was up only 0.2% from one year earlier.
Meanwhile, local apartment vacancy rates have been decreasing, with the average vacancy rate during the fourth quarter of 2020 dropping to 6.2%, down from 6.8% during the previous quarter and down from 6.5% during the fourth quarter of 2019.
“Apartment demand in Reno not only matched the strong levels of recent years in 2020, but soared to the highest level on record,” the report noted. “While the coronavirus pandemic and ensuing economic recession did impact the market, most notably causing rents to fall in March, demand accelerated in the second quarter of 2020 and remained strong in the third quarter.”
NVSAA Executive Director Susy Vasquez said Northern Nevada’s evolving economy and growing population have fueled the growing demand for housing in the area. Demand and vacancy rates improved during the second half of 2020 as more people returned to work and Nevada’s eviction moratorium was extended, most recently through at least March 31. She said it also helps that many newcomers, such as those from California, have the ability to work from home, offsetting elevated unemployment rates caused by the pandemic.
Despite the strong demand for housing in recent years, the report notes that supply growth was slow to arrive to Northern Nevada, leading to vacancy rates falling to just over 3% as recently as 2017. But since then, about 6,000 local apartment units have hit the market and the local vacancy rate is now near the national average. Though apartment construction slowed during 2020 compared to the past few years, the report showed 1,827 apartment units under construction during the fourth quarter.
According to the report, about 700 units broke ground in the Reno-Sparks metro area in 2020. That’s down from about 1,800 units per year that broke ground each year from 2016 to 2019.
“Given the general uncertainty, developers may be exercising caution,” the report concluded.
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.