RENO – A report released this week by the Nevada State Apartment Association (NVSAA) shows apartment demand in the Reno-Sparks area has not only matched the strong levels of recent years but has actually accelerated.
Net absorption in 2020 soared to a new all-time high and demand has remained elevated in 2021. According to the report, local apartment rents were seeing little growth on the eve of the pandemic due to supply-driven pressure but have now increased 8.5% through the end of the first quarter compared to one year earlier.
The report, issued by the NVSAA based on data provided by CoStar, shows asking rents for apartments in the Reno-Sparks area during the first quarter of 2021 averaged $1,379 per month. That was up from $1,328 per month during the fourth quarter, and up from $1,271 one year earlier.
Local rents are still lower than the national average apartment rent of $1,414 per month during the first quarter, which was up 2.9% from one year earlier.
Meanwhile, local apartment vacancy rates are still decreasing, with the average vacancy rate during the first quarter of 2021 dropping to 4.6%. That was down from 6.2% during the previous quarter, and down from 7.1% during the first quarter of 2020.
NVSAA Executive Director Susy Vasquez said demand and vacancy rates improved during the second half of 2020 and continued those trends in 2021 as more people returned to work. 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. Nevada’s ongoing eviction moratorium has likely contributed to rising rents, she added.
“Will we see local apartment rents decrease in the future? We don’t anticipate a decrease, but more likely some stabilization,” she said. “We continue to forecast a period of rent stabilization, primarily due to the expected flood of nearly 1,000 units into the market during the second quarter of this year. However, more new jobs coming to the region will have an effect on rent stabilization.”
The report noted that “Reno’s evolving economy, robust in-migration, and tight job market have created intense demand for housing over the last quarter. Local employment was traditionally skewed towards two sectors – trade and leisure and hospitality. But Reno gained a number of tech giants, achieved prominence as a distribution hub, and won the presence of a noteworthy corporation, Tesla. Unemployment remains elevated thanks to the pandemic, but increased in-migration, particularly from Bay Area residents with the ability to work from home, has likely played a part in the strong renter interest.”
Though local apartment construction slowed during 2020 compared to the past few years, the report showed 1,897 apartment units under construction during the first quarter in the Reno-Sparks metro area.
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.