By Alex Girda
With rents rising at the second-fastest rate in the nation by the end of October, the Las Vegas multifamily market is enjoying a strong spell across the board. Employment growth is driving significant population gains, resulting in more development. The city’s much-maligned housing market is nearing a full rebound to pre-downturn levels, on the back of household creation in rentals. A relatively low average rent of $974 has helped strengthen Sin City’s newfound appeal.
Following a silent spell for significant real estate development in the Las Vegas Valley, the market is now flooded with major projects that the construction sector is struggling to deliver. As it prepares for the relocation of the National Football League’s Raiders franchise to a $1.9 billion stadium in Paradise, Nev., the metro is also gearing up for several other large-scale ventures, including the Las Vegas Convention Center, Resorts World Las Vegas and the expansion of the MGM Convention Center. To the northeast, Reno—still hot off its Tesla GigaFactory deal—is enjoying a strong run in attracting tech giants Apple and Google, with both companies aiming to expand or develop data center projects in the area.
Going forward, Las Vegas is poised to add new inventory at a stronger rate, as 4,700 units were underway as of October while another 11,000 units were in the planning and permitting stages. As a result, it is unlikely that rent growth will continue at such a strong rate, although it is expected to top 5.0 percent in 2017.