Q3 2022 Multifamily Real Estate Report: Las Vegas, NV
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The Las Vegas multifamily market rebounded in Q3 2022 thanks to robust employment increases and increased population growth. This trend looks set to continue into 2023 as the leisure and hospitality sector experiences an expansion.
Though unemployment remained elevated at 5.4%, employers brought a 5% increase to workers on payroll by adding over 51,000 jobs year-over-year.
Its population has increased by over 2% since 2019, double the national average of 1%.
Coupling a rebounding economy with healthy population growth provides strong indicators for good performance for multifamily real estate in Las Vegas.
General Area Overview & Demographics
Las Vegas is the most populous city in Nevada and the 28th most populous city in the United States. According to the U.S. Census Bureau 2019 population estimates, about 75.6% are White Americans, 8.7% are Black or African Americans, 5.2% are Asian Americans, and 6.4% are Hispanic or Latino of any race.
The city is home to universities such as the University of Nevada, Las Vegas (UNLV), College of Southern Nevada (CSN), and Nevada State College (NSC).
Household income in the city of Las Vegas averages around $51,313. About 29% of households earn less than $35,000 per year, and 17% make more than $100,000 per year. The poverty rate in Las Vegas stands at 17.2%, higher than the national average of 11.8%.
Perhaps the most iconic of all Las Vegas attractions, The Strip is home to various casinos and entertainment venues, including the Bellagio, Caesars Palace, and The Mirage.
It’s known for its sunny and dry climate, experiencing an average of 310 days of sunshine a year. Summer brings sweltering temperatures, reaching highs of over 100°F, while winters typically stay mild and temperatures rarely dip below freezing.
Summary of Las Vegas Multifamily Real Estate Performance in Q3 2022
Vacancy fell 0.2% from Q2 to Q3, bringing it to 2.7%. Year-over-year, it was down 0.4%.
Rising supply with the economy slowing down has slowed the vacancy decline further.
Much of the activity that lowered the overall rate was seen in The North Central submarket, with vacancy declining 0.4% from Q2 to Q3.
Class A apartments are also seeing the highest increase in occupancy compared to lower-tier Class B and C properties.
Rent still costs Las Vegas residents a significant portion of their income.
What are multifamily rents like in Las Vegas?
Las Vegas rents still grew in Q3 2022, albeit at a slower pace than in previous quarters.
The average asking rent for Las Vegas’ multifamily units rose to $1,514 per month, less than a 1% increase from the second quarter of 2022.
Not only did the North Central submarket post the greatest decline in vacancy, but as expected, rents there also saw the highest gains, finishing Q3 at $1,388 per month.
Class B and C properties combined averaged about $1,260 per month. Despite this positive activity, moderations in Las Vegas rent growth continued into Q4 2022.
Purchase & Leasing Activity
Sales velocity decreased by about 60% quarter-over-quarter.
Multifamily real estate in Las Vegas increased 34% year-over-year, reaching a median sales price approaching $275,000 per unit in the third quarter.
Other than a few exceptions, properties that passed hands throughout the third quarter transacted over $60 million.
Notable Multifamily Real Estate Deals in Las Vegas in Q3 2022
There were several notable deals for Las Vegas multifamily properties in Q3.
- Alicante sold for $86.8 million at $374,100 per unit.
- Vue 5325 sold for $67 million at $279,00 per unit.
- Aviara sold for $65.5 million at $356,000 per unit.
These provide select examples among other sales.
New Multifamily Real Estate Development Activity in Las Vegas in Q3 2022
Throughout the third quarter, 1,280 units were completed, bringing over 2,000 units online at the beginning of Q4 2022.
More than 6,800 units were under construction in Las Vegas as Q3 came to a close.
Market Forecast for Las Vegas’ Multifamily Real Estate Market
While positive performance is expected to continue in Las Vegas’ multifamily market, it’ll likely move steadily.
Deliveries are soon expected to catch up and even outpace demand, so vacancy is projected to rise above 3% at the beginning of 2023.
With the economy in expansion with higher-than-average population gains, the market is positioned for strong performance.
Takeaways for Multifamily Real Estate Investors
Las Vegas looks to possess the right indicators an investor would look for to identify a market with promising potential.
Given that the end of 2022 has slowed down many of the other multifamily markets across the nation, Las Vegas seems resilient and on track to do well throughout 2023.
Do your research and invest wisely.
Find Las Vegas Multifamily Real Estate With Help From a Local Agent or Broker
MyEListing.com maintains one of the largest national databases of commercial real estate agents and brokers. Use it for free to find an agent or broker in Las Vegas, Nevada.
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