April 2017 – The sales market has made news once again in Las Vegas – both with price appreciation and high demand. This is making it ever more challenging for first time home buyers and others to get into a place to call their own. Due to this buying frenzy, many will have to resort to renting. So, where is the rental market going?
Las Vegas has seen a resurgence in the rental market over the last few years. This has especially been seen since 2014, where year over year appreciation in rents has grown between 5-8% on average. In addition, with high demand existing for rentals, due to both an influx of new residents to the area and lack of supply, rents are continuing to progress upward. As of April 2017, approximately only 2000 properties were active on the rental market according to the Multiple Listing Service, which included Las Vegas, Henderson, and North Las Vegas. This small inventory for a city of 2.1 million is clearly showing a lack of supply.
As a result, rental rates are rising. As a matter of fact, out of the available inventory in April, only 300 properties were priced at $1000 / month or less. Just over 700 were priced between $1000-$1500 and the remaining 1000 were all priced above $1500. As this appreciation continues, renters will be feeling the pinch as well. For investors, this is good news. However, affordability will become a more prominent topic over the next few months and years. What factors will affect rents in the future?
The demand for housing will definitely play a role. This demand will be based on employment opportunities and desirability of the city, which is definitely moving forward. Las Vegas and the surrounding cities are attracting new corporations from a variety of backgrounds leading to many new commerical and industrial developments throughout the area. Major league sports are making their footprint as well, leading to a desirability to be around those. As this trend continues, we can expect the Las Vegas area to become even more desirable and as a result, more expensive.
Steve is the founder of Nicklin Property Management & Investments, Inc. His experience in property management and as a real estate broker exceeds 30 years.