August Las Vegas Rental Market Update
It’s August and time for another Las Vegas update. For a more in-depth view of the Las Vegas investment market, DM me for a link to our blog site which contains more information on investing in general and investing in Las Vegas in particular.
Before I continue, note that the charts only include properties that match the following profile, unless otherwise noted.
- Type: Single-family
- Configuration: 1,000 SF to 3,000 SF, 2+ bedrooms, 2+ baths, 2+ garage, minimum lot size is 3,000 SF.
- 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.
What we are seeing:
Overall inventory continues falling in Las Vegas. The chart below is from the MLS and includes all property types and price ranges.
The charts below are only relevant to the property profile that we target.
Rentals - Median $/SF by Month
Rents held sturdy from April through July. YoY is flat.
Rentals - Availability by Month
The number of homes for rent continued to drop (since January).
Rentals - Median Time to Rent
The median time to rent is at 20 days, a very reasonable time on the market.
Rentals - Months of Supply
Only about 0.8 months of supply for our target rental property profile. Demand is greater than supply. This will push up the rent.
We saw a similar tight supply in sales as well. Now only about 0.6 months of supply. This will push up the prices.
Sales - Months of Supply
Sales - Median $/SF by Month
Despite increasing interest rates, $/SF is climbing up.
What is driving long-term demand for rental properties in Las Vegas?
Las Vegas Fundamentals
Supply and demand determine prices and rents. What is the supply situation in Las Vegas?
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.
There is little undeveloped private land remaining in the Las Vegas Valley. Any available land in desirable areas costs more than $1 million per acre. Due to the high cost of land, new homes in our targeted locations start at $550,000. The homes that appeal to our target tenant segment are priced between $320,000 and $475,000. Therefore, no matter how many new homes are built, our target housing segment remains almost constant.
Demand for housing is driven by population growth. Las Vegas is a rapidly growing city.
- The average population growth is between 2% and 3% per year.
- According to CNBC, Las Vegas is the top destination that people want to move to.
- Penske truck rental announces 2022 top moving destinations: Houston is #1, and Las Vegas is #2.
What brings people to Las Vegas? Jobs.
- At the spring job fair, there were over 20,000 open positions.
- According to the Bureau of Labor Statistics, Nevada is the #1 state in the nation for job growth
- Where are California companies moving? Henderson and Las Vegas are adjacent so the total for Las Vegas metro is 3,603 companies moving from California to Las Vegas.
More jobs are coming: there are over $30 billion of large projects currently under construction or in the planning stages, which will create thousands of additional jobs.
Everyone Must Have a Place to Live
No one has to take a vacation, buy a new car, or use self-storage. However, everyone must have a place to live. That is why rental property income is so reliable. Las Vegas is an ideal location for real estate investment because of the combination of land shortage and population growth. This combination almost guarantees appreciation and rental growth for the foreseeable future.
Thanks for reading my post. Reach out if you have questions or would like to discuss investing in Las Vegas.