October Las Vegas Rental Market Update
It’s October, 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:
The chart below is from the MLS and includes ALL property types and price ranges.
Inventory began rising in late December 2024 and continued through June, but has since leveled off.
Rental Market Trends
The charts below are only relevant to the property profile that we target.
Rentals - Median $/SF by Month
Rents remained stable MoM and marginally up YoY. This is unusual as rents typically dip in this time of year.
Rentals - Availability by Month
The number of homes for rent decreased MoM in September, again bucking the usual seasonal trend.
Rentals - Median Time to Rent
Time to rent increased MoM from 24 days to 28 days, but remained healthy especially for the season.
Rentals - Months of Supply
There are only 1.4 months of supply for our target rental property profile. This low inventory will continue to pressure up rents.
Sales - Months of Supply
Inventory has actually decreased in September. This is unusual, as inventory typically rises in the fall as the peak spring/summer sale season ends.
Sales - Median $/SF by Month
The price per square foot recovered some from last month's unexpected drop, in line with the gradually decreasing inventory.
Why invest in Las Vegas?
In short, to achieve and maintain financial freedom. However, financial freedom isn't just about replacing your current income. Financial freedom requires maintaining your lifestyle for life. This requires an income that rises faster than inflation, or you will not have the additional dollars you will need to pay future inflated prices.
What causes rents (and prices) to increase?
Supply & Demand
Unlike financial markets, real estate prices and rents are driven by supply and demand. What is the supply and demand situation in Las Vegas?
Supply
Las Vegas is unique because 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 $350,000 to $475,000, so the supply of housing we target remains almost the same regardless of how many new homes are built.
Demand
Population growth drives housing demand. Las Vegas's average annual population growth is between 2% and 3%. What draws people to Las Vegas? Jobs. Depending on the article, there is between $26B and $30B under construction, and the last job fair had over 20,000 open jobs.
In Conclusion
While nothing is guaranteed, the combination of population growth and limited land for expansion virtually assures that prices and rents will continue to increase.
Thanks for reading my post. Reach out if you have questions or would like to discuss investing in Las Vegas.
- Eric Fernwood
- [email protected]
- 702-358-8884
