Las Vegas multifamily market report

Multifamily inventory totaled 207,345 units to end the 3rd quarter, accounting for 185,158,914 square feet. Inventory continues to grow in Las Vegas, as multifamily development activity has experienced a tremendous rebound following the slowdown experienced during the pandemic.

Multifamily now boasts the largest annual development pipeline on record, with 5,049 units delivered in the first three quarters of the year – more than any other full calendar year since 2007. Las Vegas will continue adding inventory to the market as an additional 9,407 units are currently under construction, with a majority set to be delivered by 2025.

The total vacancy rate for Las Vegas multifamily increased 110 basis points quarter-over-quarter – jumping from 8.2% in Q2 to 9.3% at the end of the 3rd quarter.

The multifamily market has experienced increases in vacancy in 9 of the previous 10 quarters. However, this is deceptive as occupancy has also increased during the same period – meaning new inventory added to the market has primarily been responsible for the continued rise in vacancy rate. Vacancy is projected to increase over the next several quarters as Las Vegas still sits at the top of the largest multifamily development pipeline on record, with 14,456 units delivered during 2023 or currently under construction.

Sales volume (by $) was down $43.7m (-35.6%) quarter-over-quarter, with only $79,000,000 transacted throughout the 3rd period. Price per unit was also down quarter-over-quarter – with the price per unit sold in Q3 averaging $212,104. However, it should be considered that price per unit numbers remain far higher than the 5-year moving average of $183,721/unit.

The drastic slowdown in investment activity can primarily be attributed to a near-doubling of comprehensive borrowing costs and economic uncertainty during 2023. Given current market conditions, this has caused cold feet in prospective buyers who understand they would buy at a premium.