Las Vegas Apartment Market

The Las Vegas apartment market has remained relatively strong given the slow market conditions that are being experienced in the 2008 recession.  This is due in large part to the fact that many apartment complexes were converted to condominiums and to the fact that many potential home buyers have decided to rent rather than enter a market with falling home values.  As noted by UNLV's Center for Business and Economic Research in their Las Vegas Housing Market Conditions, however, "the apartment vacancy rate reached 8.1 percent for the first quarter of 2008."  Given a typical vacancy rate for this segment in the 3.0% to 5.0% range, an 8.1% vacancy rate is atypical.

The consensus opinion noted via our market sources indicated that apartment properties are feeling the effects of the recession and they have hit their highest  vacancy rate in years (at about 8.0%).   Apartment rental rates are being affected by some concessions, the the average rental rate was only off by $ 10 per month from the 3rd Quarter of 2008.  While the economic slow down has negatively affected the single-family residential market the apartment market segment appears to have remained relatively strong.

Most apartment complexes located in the Las Vegas market are frame constructed, painted stucco exterior, 2-story properties.  Many have clubhouses, pools, tennis courts, private (gated) access, playgrounds (tot lots), covered parking and other amenities.  Rental rates typically start at around $ 1.00 per square foot per month.  While sizes vary from complex to complex, a 600 square foot 1-bedroom unit is typical and an 800 square foot 2-bedroom unit is typical.  Per Nevada Housing Division apartment study statistics, there are more 2-bedroom units than any other unit type in the market.    

Expectations for Las Vegas and its short-term future are consistent with the recent past.  The slow market conditions that are being experienced in mid-2008 will likely continue until upward changes / increases in employment begin to influence the market.  Las Vegas is anticipating large employment gains due in part to the opening of the six (6) high-rise towers, casino and 4,000 room hotel that will have cost approximate $ 9.0 Billion dollars at the MGM Mirage CityCenter on the Las Vegas Strip just south of the Bellagio Hotel & Casino.  Early reports indicated that 12,000 new permanent jobs would be created by this project which now has a "late 2009" expected opening date.     

The long-term prospects for the Las Vegas apartment market are considered to be good.  The fact that the apartment market has held its own in a time of dramatic downturns is evidence of its strength.  We have published an article at our Appraisal Articles site entitled "The Las Vegas Apartment Market – A 2008 Appraiser Perspective" that you may find useful.

Contact us with your questions or concerns regarding the Las Vegas Apartment market or regarding your specific appraisal assignment in Nevada at 1-702-568-6699.  We can also be e-mailed at grigdon@cox.net.            

Commercial Real Estate Appraisals in the Las Vegas & Henderson, Nevada Area.