A total of 8,600 apartment units are under construction in Southern Nevada, mostly in Summerlin and Henderson. (Photo: Ronda Churchill)
The average rent for an apartment in Southern Nevada was $1,451 in the third quarter of 2022, down from $1,480 in the second quarter but up from a year ago, when the average rent was $1,403.
Rents are up 2.5% for the first three quarters of 2022 over 2021.
“Rents are expected to continue to decrease through the remainder of the year as vacancy rises from the all-time low we saw in 2021,” Nevada Apartment Association Executive Director Robin Lee said in a news release. “Las Vegas continues to attract new residents with its affordable cost of living compared to other western markets, especially California. Even with record-setting inflation, local rents are still lower than the national average apartment rent of about $1,630 per month during the third quarter.”
Average rent in Las Vegas eats up about 27% of median household income, up from 21% in 2019, according to data provided to the NVSAA by CoStar.
“After 2021’s record-breaking rent growth, many renters would have difficulty stomaching another year of rent increases above 20%, particularly when CPI is above 8%,” says a report from market data firm CoStar. “The Baseline forecast calls for rent gains to continue to decelerate due to weaker apartment fundamentals.”
Vacancy rates spiked to 7.5% in the third quarter of 2022, up from 3.6% a year ago, leaving more than 13,500 units vacant.
“The end of eviction moratoriums has also added a significant number of available units that have been on the sidelines since the pandemic,” says the report from CoStar.
The vacancy rate is 6.8% for lower-priced “1 & 2 star” properties. No units in that category are under construction. The vacancy rate is 7.8% in the “4 & 5 star” category, which has 7,015 units under construction. A total of 8,600 units are under construction, mostly in Summerlin and Henderson.
While single-family homes will increasingly pose competition to apartments, according to the report, the $450,000 median price of a single family home “makes the monthly mortgage payment more costly than the average asking rent for 4 & 5 Star units, keeping many would-be homebuyers in the renter pool.”
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