Las Vegas Housing Market Update - August 2022
Inventory Will Not Stop Rising!
August continues a 3-month trend of monthly rental inventory increases of at least 12%. This level of sustained growth is resulting in rental inventory numbers that McKenna Property Management has not seen. MLS inventory numbers have crossed the 3,000 threshold. With the continued cooling of the real estate market, along with the plateauing rents, it is unlikely that inventory will stop increasing anytime soon.
In August of 2022, 2,155 rental properties were leased across the Las Vegas Valley. This is an 27.9% increase from August of 2021 (1,685 properties). The number of rental properties listed in August of 2022 was 1,898. This is a 108.8% increase from August of 2021 (909 properties). The median price of rental properties across the valley in August of 2022 was $2,000/mo. This represents a 6.1% increase from August of 2021 ($1,885/mo.). The average price of rental properties in August of 2022 was $2,176/mo. This is an 8.1% increase from August of 2021 ($2,009).
Here are the key takeaways for any real estate investor in the current market:
A) Expect to continue seeing rent prices stabilize in the coming months. As inventory continues to trend upwards, competition for potential tenants' attention is intense. Compounding this issue is the general slowdown of the rental market that is seen between September and January as there are less tenants moving at this time. This means that property managers and landlords will be more focused on offering price-competitive rentals than trying to push rent. Every day a property is vacant, is money the owner is missing out on, so the property manager's obligation will fall to making sure the property moves quickly for their owner(s).
B) Expect inventory to keep increasing through the rest of the year. Typically, rental inventory peaks in November of each year, and in addition to this annual trend, many developments that were delayed by COVID are now finishing and their properties are entering the rental market. With inventory nearly 4 times what it was at this time last year (2,907 in Aug. '22 vs. 749 in Aug. '21), it is rare to have a qualified tenant apply within the first 48 hours. With so many options, potential tenants are more price sensitive and particular about their rental than they were a year ago.
No matter the market conditions, every property is unique and needs a proper market analysis to determine what the current fair market rent would be. If you have questions about where your property fits into the current rental market, please reach out to us.
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