Las Vegas Multifamily Report – December 2022
After an exceptional bull run, the city's rental market is returning to sustainable levels.
Las Vegas rent evolution, click to enlarge
At the start of the fourth quarter, the Las Vegas multifamily market continued to post mostly healthy, albeit depreciating fundamentals, with substantial investment activity and a robust construction pipeline. Rent growth contracted for the second consecutive month in October—down by 0.4 percent on a trailing three-month basis, to $1,504. The decline stemmed from the Lifestyle segment, while Renter-by-Necessity rates remained flat. Meanwhile, occupancy in stabilized assets took a dive, down 180 basis points in the 12 months ending in September, to 94.5 percent.
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Las Vegas sales volume and number of properties sold, click to enlarge
The unemployment rate in Las Vegas clocked in at 5.3 percent in September, according to preliminary data from the Bureau of Labor Statistics, lagging the state (4.4 percent) and the U.S. (3.5 percent). The rate improved from the 5.8 percent recorded in January and remained above pre-pandemic figures. Employment expanded by 8.4 percent, or 52,100 jobs, in the 12 months ending in August, well above the 4.3 percent national rate, but still decelerating. Moreover, two sectors lost a combined 700 positions. Rising visitor volume and the growth of the professional and business services sector point to likely improvement in the metro.
Las Vegas: Image by Wirestock/iStockphoto.com
Development picked up slightly, with 1,173 units delivered through October and another 9,400 underway. New construction starts will likely decrease due to dwindling debt sources. Meanwhile, investment sales topped $3 billion in 2022 through October.
