Las Vegas Multifamily Report – Summer 2020

With nearly one-third of the workforce unemployed, the metro's rental market is looking at an uphill battle in coming quarters.
Las Vegas rent evolution, click to enlarge
Las Vegas rent evolution, click to enlarge

Las Vegas was one of the country’s hardest-hit cities amid the COVID-19 pandemic, and multifamily real estate is feeling the effects. The metro’s average rent was down 0.3 percent on a trailing three-month basis through May—10 basis points below the U.S. rate—to an average of $1,102. One silver lining has been the decline of the turnover rate, with an increasing number of tenants staying in place due to disruptions brought by the health crisis.

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Las Vegas’ largest sectors—leisure and hospitality and trade, transportation and utilities—suffered a severe economic hit from the pandemic. During the 12 months ending in March, the metro gained only 3,000 jobs overall. The coronavirus health crisis triggered nearly 500,000 unemployment claims through June 6—the highest number in Nevada’s history—while Las Vegas’s unemployment rate stood at 29 percent by the end of May. And while casinos reopened in June, the metro’s employment composition does not favor a speedy recovery.

Las Vegas sales volume and number of properties sold, click to enlarge
Las Vegas sales volume and number of properties sold, click to enlarge

After the 2019 cycle peak of $3.3 billion in multifamily transactions, sales during 2020’s first five months totaled just $533 million. The per-unit price, however, rose by 16.2 percent to $183,163. Meanwhile, developers brought 536 apartments online and had another 4,797 units underway through May. Considering the metro’s fundamentals, we expect the average Las Vegas rent to drop 4.7 percent in 2020.

Read the full Yardi Matrix report.