Las Vegas, NV – Avison Young has released its Third Quarter 2022 Multifamily Market Report for Las Vegas. The report shows that multifamily sales activity in the greater Las Vegas region is seeing signs of slowing as interest rates rise. Subsequently, as interest rates rise, a trend for additional renter demand will elevate, as would-be home buyers look to rent rather than purchase a home.
With the pandemic over and home buying decelerating, average rental rates have risen in Las Vegas, up 22.9% since 2020 to $1,430 per unit.
“Average asking rent for Las Vegas apartments was above $1,400 during the last quarter. Although rental rates have risen more than 20% since 2020, we may only see a 5% to 8% increase over the next few years. We are seeing a slight increase in vacancy compared to this time last year, but it is still at the pre-pandemic level of 6.5% to 7%. As the Fed continues to increase rates to tackle inflation, a lot of investors are putting a pause on transactions due to volatile debt markets. Sales activity in the Las Vegas multifamily market is beginning to slow down due to higher rates,” said Steve Nosrat, an Avison Young Principal specializing in the Las Vegas multifamily sector.
Multifamily sale activities in the Las Vegas market are beginning to decrease with nine transactions and a volume of just under $400 million in Q3 2022. They are expected to continue to decline going into Q4 2022 as pricing begins to reset due to higher interest rates and ensuing bid-ask gap.
Las Vegas vacancies have begun to increase, checking in at the pre-pandemic level of 6.8% in Q3. With 8,765 units absorbed since Q1 2020, demand has continued to keep pace with new deliveries.
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