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- Las Vegas, NV
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February Las Vegas Rental Market Update
It’s February, and it's time for another Las Vegas update. For a comprehensive view of the Las Vegas investment market, message me for my blog link. It contains more detailed information on investing insights, analytics, and, particularly, investing in Las Vegas.
Before proceeding, note that the charts only include properties that fit the following criteria unless stated otherwise.
- Type: Single-family
- Configuration: 1,000 SF to 3,000 SF, 2+ bedrooms, 2+ baths, 2+ garages, minimum lot size is 3,000 SF, one or two stories.
- Price range: $320,000 to $475,000
- Location: All zip codes marked in green below have one or more of our client’s investment properties.
Overall Las Vegas Real Estate Market Inventory
The chart below, provided by the MLS, includes all property types and price ranges.
The inventory level continued its downward trajectory, significantly lower YoY.
Rental Market Trends
The charts below are only relevant to the property profile that we target.
Rentals - Median $/SF by Month
Rents started to rise after the holiday season. YoY is up 5.4%.
Rentals - Availability by Month
The number of homes for rent continued the downward trend. YoY is down 12%.
Rentals - Median Time to Rent
Median time to rent was down significantly MoM, showing a heating up rental market. YoY is down more than 20%.
Rentals - Months of Supply
Only about 1.1 months of supply for our target rental property profile. Demand is greater than supply. This will pressure up the rents.
We saw a similar tight supply in sales as well. Now, just about one month of supply. This will continue to push up the prices.
Sales - Months of Supply
Sales - Median $/SF by Month
Despite increasing interest rates, $/SF climbed throughout 2023. The $/SF is almost unchanged MoM, but YoY is up 8.1%.
Why invest in Las Vegas?
In short, to achieve financial freedom. However, financial freedom is not simply replacing your current income; it requires maintaining your current lifestyle for life. To attain lifelong financial freedom, you need to invest in a city where rents and appreciation outpace inflation.
What causes rents (and prices) to increase?
Supply & Demand
Unlike financial markets, real estate prices and rents are driven by supply and demand. In this post, I will briefly discuss the unique supply and demand situation in Las Vegas.
Supply
Las Vegas is unique in that it is a tiny island of privately owned land in an ocean of federal land. See the 2020 aerial view below.
Very little undeveloped private land is left in the Las Vegas Valley, and desirable areas cost more than $1 million per acre. Consequently, new homes in these locations start at $550,000. Homes that appeal to our target tenant segment range from $320,000 to $475,000, so the supply of housing we target remains almost the same regardless of how many new homes are built.
Demand
The driver for housing demand is population growth.
The average Las Vegas annual population growth is between 2% and 3%. What is bringing people to Las Vegas are jobs. At the 2023 spring job fair, there were over 20,000 open positions. The annual average wage was $65,000, which is our target tenant segment.
Las Vegas has $30 billion in new developments either under construction or planned. This will create thousands of additional jobs, bringing more people to the city and increasing housing demand.
In Conclusion
With a fixed supply of properties in the range of $320,000 to $475,000, a rapidly growing population, and a growing number of jobs, it is almost certain that rents and prices will increase in the foreseeable future.
Thanks for reading my post. Reach out if you have questions or would like to discuss investing in Las Vegas.
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Real Estate Agent NV (#S.0067069)