Home rental prices continue to trend upward in Southern Nevada, even as home purchase prices experience a seasonal lull.
Research firm Applied Analysis shows a 16th consecutive quarter of growth in average apartment rents in the Las Vegas Valley in the third quarter. Average rent per unit stands at $918 per month for the most recent quarter, representing an increase of 1.1 percent from the second quarter and a year-over-year jump of 8 percent.
“Key contributors to the rising rents are communities with high-end finishes and added amenities that have recently entered the market,” said Brian Gordon, principal at Applied Analysis. “While the apartment sector experienced limited development activity during the decade preceding the current recovery, the pendulum has clearly swung the other way.”
Rents from all corners of Southern Nevada showed strength. Rents in the southeast part of the valley displayed the strongest gain at 9.8 percent and averaged $1,058 per unit, followed by the northwest valley at $921, an uptick of 8.7 percent.
“Population continues to rise, and the job market is reporting fairly consistent growth. As a result, the local for-sale housing market continues to make progress with relatively healthy sales volumes and modest increases in overall prices,” Gordon said. “Gains in the rental market have generally followed suit as occupancies remain high and rent growth is well above average.”
Occupancy held at 94.3 percent in the third quarter. For the same time in 2015, that rate stood at 93.8 percent.
A separate report from Real Property Management and RentRange indicates a similar increase in rental prices for single-family homes in the valley. A three-bedroom home rents for an average of $1,313 per month, according to the report, increasing 6.5 percent from the same time last year. For a home of that size, prices in Las Vegas lag behind the national average rent of $1,459, up 4.8 percent from a year ago.
“We see home prices going up, and that has had a natural ripple effect onto the rental market,” said Tod Wever, principal/owner of Real Property Management Las Vegas, which manages more than 500 homes in the Las Vegas area. “Whenever the home prices go up, that drives up our rent prices as well. The forecast going forward feels that’s going to continue to be the trend.”
Home prices in Las Vegas actually slid slightly in October. The median price of $233,250 for October sales fell $1,650 from September, but still represented a 5.1 percent year-over-year increase. Home prices peaked this year during July at a median price of $237,500.
Wever said the same seasonal malaise that hits home prices in the winter affects his rentals as well. Asking prices tend to become more flexible as the weather cools.
“You tend to take some rent; it’s better than no rent,” Wever said.
The report also showed that 31.2 percent of single-family houses are rented homes in the Las Vegas area. Nationally, rentals represent 25.3 percent of three-bedroom, single-family homes.