Las Vegas rents are dropping faster than anywhere else in the country, report says
Las Vegas Valley rents are dropping faster than anywhere else in the country right now, according to a new report from Realtor.com.
Rents in the valley dropped 13.6 percent from August 2022, tying Atlanta for the largest drop of any metro in the U.S. followed by Austin, Texas (13.4 percent), the report said. The median asking rent for all bedroom counts in the valley sits at $1,443, a 4.6 percent drop year over year for August.
However, over the past six years rental rates in the valley have risen 19.8 percent, outpacing previous time frames as the report noted renters have still been “squeezed by significant increases since the pandemic.” The valley outpaced the national average over the past six years (17 percent), however the average asking rent remains below the country’s median price at $1,713.
Las Vegas saw both a population and multifamily building boom due to the pandemic as financing rates bottomed out and remote work allowed many residents to relocate to cheaper areas, largely from California.
Immigration to the valley has slowed since a high-water mark in 2022, and most multifamily projects that were started during the pandemic have now come online and are being leased . But the pipeline for new multifamily projects has stalled significantly and most of the projects either underway or about to break ground are billed as “luxury units” due to market constraints making cheaper apartment complexes harder to build.
The city is also now dealing with a drop in tourism and international visitors, which has forced the local economy to shed jobs amid the slowdown. Economic uncertainty has also weighed down the multifamily industry as fewer projects are being started nationwide this year than in previous ones.
Jiayi Xu, an economist at Realtor.com, said the valley’s rents went way up during the pandemic and are now coming back down to earth. Foreign migration to the state also dropped last year, a trend expected to continue given the current administration’s stance on immigration.
“Las Vegas has experienced the largest rent declines from its peak, following rapid rent growth during the pandemic when many people moved to warm Sun Belt areas, creating a high starting point for corrections,” she said. “In recent years, migration has slowed, and a surge in multifamily supply has increased options for renters, putting downward pressure on prices. Together, these factors have pushed rents down more sharply than in other markets.”
The report noted rental rate drops have unlocked the market and allowed renters across the country to relocate locally or out of state to try and find cheaper rates in many cities including Las Vegas.
“Meanwhile, more than two years of declining rents are sparking moving plans for many renters to gain space, save money or explore a new area,” read the report.
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.