Las Vegas Housing Market Update - October 2022
Rental Inventory is Reaching Historic Highs
At the end of October, rental market inventory was 3,469 rental properties. Throughout November, this number has passed 3,700 active listings. As mentioned in previous updates, increased mortgage interest rates and a slowing of the sales market results in more owners using their property as a rental as opposed to selling. Additionally, the fall and winter are the slowest seasons of the year for the rental market, and inventory naturally increases around this time of year as there are less people looking to move during the school year and holiday season.
In October of 2022, 1,985 rental properties were leased across the Las Vegas Valley. This is an 26.7% increase from October of 2021 (1,567 properties). The number of rental properties listed in October of 2022 was 1,993. This is a 108.7% increase from October of 2021 (955 properties). The median price of rental properties across the valley in October of 2022 was $1,950/mo. This represents a 2.9% increase from October of 2021 ($1,895/mo.). The average price of rental properties in October of 2022 was $2,153/mo. This is an 3.4% increase from October of 2021 ($2,048).
Here are the key takeaways for any real estate investor in the current market:
A) We are now seeing decreases in rent prices month over month with both median and average rent decreasing in October, even if only by a few percentage points. Moving forward, properties that were leased during the height of the pandemic may not be able to secure rent increases during tenant turnover and may even experience slight ($25 to $75) rent decreases. Since the most recent rent peak in May of 2022, average rental prices have decreased by $93 and median rental prices have decreased by $125.
B) Due to ever increasing inventory and the slight deflating of rent prices, many rental listings continue to have to go through multiple price reductions to find a tenant and are spending more time on the market. In fact, 50% of all leased rental properties in October had to go through at least 1 price reduction to get rented with an average price reduction of 9.6%. Additionally, the MLS average Days on Market has increased over the last 4 months from 21 days in July to 33 days in October. This is the highest Days on Market seen for the MLS since February of 2020.
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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