Las Vegas 3Q23
Multifamily Market Report

$1,462

average rent

92.8%

average occupancy rate

$383.7M

ytd sales volume

-4.3%

YoY rent change

-1.6 POINTS

yoy occupancy change

6 YTD

individual transactions

Supply & Demand

3Q23

334 Units

QUARTERLY DEMAND
YTD: 676

1,382 Units

QUARTERLY COMPLETIONS
YTD: 2,960

Annual Demand vs Completions

2018
4,251
3,360
2019
2,446
2,665
2020
5,196
3,088
2021
5,162
3,480
2022
-5,791
2,434
2023 YTD
676
2,960
  • Planned
    Completions
  • Pre-Planned
    Demand

Demand Trends

  • After a period of sluggish performance extending from 2022 into early 2023, the apartment market in Las Vegas-Henderson-Paradise regained some momentum in the second quarter and maintained it through the third quarter.
  • However, this demand remained substantially below historical standards. Specifically, the absorption of 334 units in Q3 2023 was just over half the typical third-quarter average of approximately 650 units observed in the decade preceding the pandemic.

Completion Trends

  • Approximately 3,600 units were completed in Las Vegas in the year ending Q3 2023, surpassing the market’s five-year annual average of around 3,000 units.
  • This completion rate elevated the local inventory base by 1.6%. Notably, the bulk of this new supply was concentrated in Southwest Las Vegas.

Demand Outlook

  • The outlook for Las Vegas’ apartment market hinges on how well demand sustains amid heightening apartment deliveries over the next four quarters.
  • Boosted by a resurgence in the travel and hospitality industries, local employment growth has not only surpassed the national average but also returned to levels exceeding those before the pandemic, a factor that should help minimize the impact of the influx of new unit deliveries in the next year.

New Supply Outlook

  • As of the close of Q3 2023, Las Vegas had 9,793 units under construction, with 6,829 of these units slated for completion within the upcoming four quarters.
  • The majority of these scheduled deliveries are expected in Southwest Las Vegas, accounting for 2,272 units, while both North Las Vegas and Henderson are each projected to receive over 1,000 units.

Occupancy & Rent Trends

RENT VS OWN
MONTHLY PAYMENT

$3,322

Average Monthly Mortgage Payment

$1,462

Average Monthly Rent

Occupancy trends

In the third quarter of 2023, weakened demand pushed Las Vegas’ occupancy rates to a nine-year low, settling at 92.8%. This marks a 0.4-point decline from the previous quarter and a 1.6-point drop year-over-year. Within this context, Class A units somewhat defied the trend with a 93.3% occupancy rate, while Class B mirrored the market average at 92.8%. Class C units trailed the pack with occupancy at 92.4%. Submarket performance also displayed variations in occupancy, with Sunrise Manor/Northeast Las Vegas recording the lowest at 91.1%, while Central Las Vegas managed to buck the trend somewhat with a high of 94.2%. This landscape underscores the challenges facing the Las Vegas market amid a complex interplay of supply and demand factors.

RENTAL TRENDS

In the third quarter of 2023, average apartment rents in Las Vegas experienced a 0.9% decline on a quarterly basis, marking the fifth consecutive quarter of flat or negative rent changes. On an annual basis, the market saw a 4.3% reduction in rents, ranking it the third-worst among the nation’s 50 largest markets, outpaced only by Phoenix and Austin. Across all product classes in Las Vegas, rents fell over the year, with Class B apartments registering the steepest decline at 5.2%. Classes A and C observed more moderate annual rent cuts of 3.0% and 3.6%, respectively. Every submarket in the area also experienced annual rent declines, ranging from a 5.8% decrease in both Henderson and Green Valley to a milder 0.7% drop in Central Las Vegas.

Submarket Rent & Occupancy

SubmarketAverage OccupancyAnnual Occupancy ChangeAverage Monthly RentAnnual Rent Change
Central Las Vegas94.2%-1.5%$1,238-0.7%
East Las Vegas92.3%-2.1%$1,294-5.0%
University/The Strip93.0%-2.7%$1,241-1.8%
West Las Vegas92.4%-2.2%$1,322-4.4%
North Las Vegas91.2%-3.2%$1,484-4.7%
Sunrise Manor/Northeast Las Vegas91.1%-2.9%$1,249-3.1%
Henderson93.8%-0.5%$1,621-5.8%
Green Valley93.3%-0.1%$1,554-5.8%
South Las Vegas93.7%-1.8%$1,601-3.6%
Southwest Las Vegas93.7%-0.7%$1,689-3.7%
Summerlin/The Lakes92.7%-0.9%$1,710-5.1%
Northwest Las Vegas92.4%-1.7%$1,486-5.3%
Las Vegas-Henderson-Paradise, NV92.8%1.6%$1,462-4.3%

Units by Submarket Delivering in 2023

9,793

Units Under Construction

6,829

Units UC Delivering In the Next 4 Quarters

Number of Units Under Construction

Central Las Vegas - 1,062
0%
East Las Vegas - 0
0%
University / The Strip - 388
0%
West Las Vegas - 251
0%
North Las Vegas - 1,600
0%
Sunrise Manor / Northeast Las Vegas - 0
0%
Henderson - 1,489
0%
Green Valley - 0
0%
South Las Vegas - 1,360
0%
Southwest Las Vegas - 2,651
0%
Summerlin / The Lakes - 0
0%
Northwest Las Vegas - 992
0%

Number of Units Delivering Next 4Q

Central Las Vegas - 24
0%
East Las Vegas - 0
0%
University / The Strip - 323
0%
West Las Vegas - 251
0%
North Las Vegas - 1,273
0%
Sunrise Manor / Northeast Las Vegas - 0
0%
Henderson - 1,042
0%
Green Valley - 0
0%
South Las Vegas - 966
0%
Southwest Last Vegas - 2,272
0%
Summerlin / The Lakes - 0
0%
Northwest Las Vegas - 678
0%

Sales Activity

Transaction dollar volume for single asset conventional multifamily trades in Las Vegas totaled roughly $383.7 million through the 3rd quarter 2023, down about 84% year-over-year. Meanwhile, the number of transactions decreased about 87% compared to the same timeframe last year, with only 6 apartment properties trading hands so far in 2023. Meanwhile, the average price per unit in Las Vegas came in at roughly $217,600, down 18% annually. Las Vegas’ average price per unit landed below the norm for the West region ($301,000) but relatively equal to the U.S. average ($219,700).

  1. Tides Equites
  2. Davlyn Investments Inc
  3. Keller Investments
  1. Bascom Group
  2. WestCorp
  3. Calida Group

TRANSACTION VOLUME


YTD Transaction Volume


Y-O-Y Change


Individual Transaction Count


Price Per Unit


Annual Price Change

* Trailing 4Q average PPU

* Preliminary Data from RCA – Individual conventional MF transaction $2.5M +

Economy

In the year spanning from August 2022 to August 2023, Las Vegas saw substantial growth across multiple employment sectors, signaling a resilient and diversifying economy. Leading the charge was the Leisure and Hospitality sector, with a remarkable 6.5% increase, adding 18,400 jobs. This sector’s performance is particularly notable given its significance to the local economy. Professional and Business Services followed suit with 6.0% growth, contributing an additional 9,700 jobs. However, the standout in terms of percent change was the Construction sector, surging by 8.2% and adding 6,400 jobs, reflecting a booming real estate and development market. Other notable sectors include Education and Health Services, which grew by 5.3%, and Government, posting a 3.4% increase. Overall, the metro added 48,600 jobs with an employment growth rate of 4.5%, indicating a positive trajectory in the labor market.

48.6K

August Annual Jobs Created

4.5%

August 23 Employment growth

6.1%

August 23 Unemployment rate
3.8% us august rate

Top 5 Employment Sector Annual Change

leisure & hospitality

leisure & hospitality

Change from August 2022 to August 2023:
18,400

Percent Change:
6.5%

business & professional services

business & professional services

Change from August 2022 to August 2023:
9,700

Percent Change:
6.0%

construction

construction

Change from August 2022 to August 2023:
6,400

Percent Change:
8.2%

government

government

Change from August 2022 to August 2023:
3,600

Percent Change:
3.4%

trade, transportation & utilities

trade, transportation & utilities

Change from August 2022 to August 2023:
2,400

Percent Change:
1.2%

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SectorChange from August 2022 to August 2023 Percent Change
Leisure and hospitality18,400 6.5%
Professional and business services9,700 6.0%
Construction6,400 8.2%
Education and health services6,200 5.3%
Government3,600 3.4%
Trade, transportation, and utilities2,400 1.2%
Manufacturing1,800 6.1%
Information300 2.2%
Financial activities200 0.3%
Mining & logging 0 0.0%
Other services(400)-1.2%

Cost of Living Comparison

The cost of living in Las Vegas presents a significantly more affordable picture compared to Los Angeles. According to the Cost-of-Living Index, Las Vegas scores a 95.9, considerably lower than Los Angeles. The most striking difference lies in housing costs, which are 55.4% less expensive in Las Vegas. Utilities and transportation also tilt in favor of Las Vegas, being 6.8% and 11.2% less costly, respectively. Even grocery and healthcare expenses are marginally lower, by 5.8% and 17.4%. Given these disparities, it’s clear that Las Vegas offers a more cost-effective living experience across multiple categories, making it an attractive alternative for those contemplating a move from expensive coastal cities.

Los Angeles, CA vs. Las Vegas, NV
Cost of Living Comparison
Groceries:

5.8% Less
Housing:

55.4% Less
Utilities:

6.8% Less
Transportation:

11.2% Less
Health:

17.4% Less
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Cost of Living Index

95.9

Index Score

Average Mortgage

$3,322

vs Average Rent: $1,462

Housing

102.4

Index Score

Utilities

104.2

Index Score

Gas

106.5

Index Score

Median Home Sales Price

$449,600

YoY Change: -7.4%

Market Outlook

Las Vegas’ apartment market is at an inflection point, influenced by a mix of positive economic indicators and challenges. On one hand, the rebound in the travel and hospitality sector has propelled employment growth, surpassing national averages and returning to pre-pandemic levels. This, coupled with an in-migration from higher-cost areas like California, has provided a boost to housing demand. However, several factors could temper this optimism. The influx of new supply is at the forefront, with over 6,800 units set to be delivered in the next 12 months, resulting in a 3.0% inventory growth. While this rate is moderate on a national scale, it’s significant enough to create competition, particularly in the Class A segment.

While challenges persist, the foundation for a resilient market is present. Employment gains, particularly in critical sectors like travel and hospitality, bode well for future demand. It’s reasonable to expect that as the market stabilizes, both occupancy rates and rent growth will see incremental improvement, albeit potentially remaining below U.S. averages. The metro appears poised to navigate through the transitional phase and likely has the worst of its net move-outs behind it.

 Sources: RealPage; BLS; MSCI; The Council for Community And Economic Research (C2ER)

To Gain Further Insights Into The Las Vegas Market Please Reach Out To Our National Team

Image of Alex

Alex Blagojevich

Executive Managing Director / Co-Founder

Image of Michael Sullivan

Michael Sullivan

Executive Managing Director / Co-Founder

Image of David

David Huey

Senior Director

Kendall Adams

Associate Advisor

Ryan Carter

Associate Advisor

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