Report: Job loss, supply glut push Las Vegas apartment vacancies to historic highs
Las Vegas apartment fundamentals will continue to weaken this year as persistent job losses and a supply glut push vacancy levels to historic highs, a third-quarter report from Marcus & Millichap brokerage firm said.
A stalled economy has forced builders to put some large-scale commercial developments on hold, eliminating about 19,000 construction jobs in the past 12 months and cutting into renter demand.
John Vorsheck, regional manager of Marcus & Millichap in Las Vegas, said sales activity has come to a near standstill as investors wait on the sidelines in light of projections for further fundamentals deterioration.
Significant findings in the Las Vegas apartment report from Marcus & Millichap include:
— Job losses will deepen in 2009 as local employers eliminate 63,000 positions, a 7 percent decline in jobs. Last year, about 36,800 jobs were cut.
— Builders are on pace to deliver 2,500 new apartment units this year, expanding the inventory by 2 percent. In 2008, 2,600 units came online.
— Supply-demand imbalance will drive vacancy to a projected 10.7 percent this year, a jump of 280 basis points. Last year, vacancy increased 180 basis points.
— Asking rents are forecast to retreat 2.8 percent to $841 a month. Owners will widen concessions in response to weakened occupancy levels, driving down effective rents by 5.6 percent to $779 a month.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.