Despite large rent increase, Las Vegas market seen as affordable
The median monthly rent for an apartment in Las Vegas has jumped more in the past year than any other major U.S. metro area, according to a new report.
However, Suzy Vasquez, executive director for the Nevada State Apartment Association, said the Las Vegas rental housing market remains healthy and affordable for most renters.
That's despite the recently released Zillow report, which lists the median rent in June for the Las Vegas metro area across all rental properties as $1,435, a 10% increase from June 2018.
For a one-bedroom apartment in Las Vegas, Zillow lists the median price at $1,075.
"If they're reporting the median rent at $1,400, that's 100% inaccurate," Vasquez said of the Zillow numbers. "Las Vegas is not anywhere near that. What I can say about the Las Vegas market is that there isn't really a concern about supply because we're releasing so many units."
In fact, Vasquez said, median price for all rental housing options in Las Vegas is closer to $1,100, according to the association's data.
"Our occupancy in Clark County remains stable at 95%, which is healthy," Vasquez said. "While the residential market may be seeing a slight slowdown, there should be no cause for concern. Clark County is short on supply. If you want rents and home prices to normalize, allow us to build more."
Nationally, the Zillow report showed the median U.S. monthly rent for June as just over $1,480, which represents a 3% increase from June 2018.
Other than Las Vegas, Phoenix saw the next highest rent increase from June 2018 through last month with a jump of more than 8%.
"What the rental market still craves are affordable units spread across the landscape," said Skylar Olsen, a researcher with Zillow. "Show me a three-bedroom apartment in a small building located near good schools and I'll show you an older millennial with kids ready to move in."
When compared with other West Coast rent increase hotbeds like Seattle or the Bay Area in California, Vasquez said renting in Las Vegas remains a bargain.
"We're still a top contender for affordability when compared to similar metropolitan markets," Vasquez said. "Whether it's apartments or homes, we can't build fast enough right now in Las Vegas. We still haven't recovered from when we stopped building from 2008 to around 2012."
Waterton, a national real estate investment and operations company based in Chicago, seems to believe in the strength of the Las Vegas rental market.
Earlier this month, the company announced it bought two apartment complexes in the Las Vegas Valley -- one in Las Vegas and one in Henderson — that combined have more than 700 units.
The company previously had a presence in Las Vegas and decided this year to come back to the market.
"Favorable late-cycle economic growth in Las Vegas is a large part of what drove our decision to reenter the market," said David Schwartz, co-founder of Waterton, in a statement. "These assets are situated in highly desirable locations and offer excellent in-place amenities in a rapidly growing market."
One of the major unknowns for the immediate future of the housing market in Las Vegas, Vasquez said, is how the arrival of the NFL's Oakland Raiders next year will change the landscape.
There's also no slowdown on the horizon, she said, for the number of people moving to Las Vegas.
"The question right now is how much pro sports will affect things," Vasquez said. "Our concern is that there will be people who come and essentially become ghost renters. They may rent apartments or homes because it's cheaper to do that than get a suite for the eight or 10 games per year they come to watch (the Raiders). We're hoping that Airbnb absorbs that, but we just don't know what the Raiders stadium will bring as far as housing requirements."