Las Vegas multifamily market report

The Las Vegas multifamily market is seeing a decrease in vacancy rates compared to previous quarters. From Q3 2023 to Q1 2024, vacancy rates in the Las Vegas retail real estate market remained above 9%, surpassing the historical average range of 5 to 7%. In 2020, vacancies notably decreased, influenced by various factors such as increased remote work options, changing housing preferences, and ongoing migration from coastal urban centers. However, rates rose again with around 2,400 new units delivered in Q1 2023, increasing vacancies until the space is absorbed.

In 2023, new constructions significantly increased vacancy rates in the Las Vegas multifamily market. However, by Q2 2024, the market saw a notable turnaround with a strong positive absorption of 2,330 units, signaling increased stability and balance. Contrastingly, from Q4 2021 to Q4 2022, the market experienced consistently low or negative absorption, which resulted in an imbalance where supply outpaced demand. The recent quarters have been pivotal in addressing this disparity, with 2024 recording 4,268 units of positive absorption in just two quarters, surpassing the total for all four quarters of 2023 combined.

Las Vegas multifamily rents have maintained historical highs with minimal growth since 2022. Over the past two years, rental rates have remained stable, in the $1400 area and there is no expectation of a decrease as long as construction costs remain steady. However, the recent surge in positive absorption could intensify competition if that trend continues, potentially influencing asking rents as the year progresses. Additionally, The migration of higher-income families and individuals to the affordable and conveniently located Sunbelt markets from the coasts is expected to fluctuate housing costs and increase demand for flexible multifamily housing options.