The Las Vegas Valley is leading the nation in rental concessions, giving apartment hunters more leverage as a wave of new housing works its way through the market.
Zillow’s June rental report found that 51.7 percent of Las Vegas area apartment listings offered concessions, well above the national average of 39.7 percent and the highest rate in the country among the nation’s 50 largest metros. The share of listings offering concessions was up 15.5 percentage points from a year earlier, Zillow said.
The increase comes after a pandemic-era boom in multifamily construction, when low interest rates and strong demand fueled a wave of financing and apartment development across the Las Vegas Valley.
Much of that new supply has hit the market over the past 18 months, particularly in areas such as the southwest valley, Spring Valley and North Las Vegas. The influx of apartments has given renters more options and put pressure on landlords to offer concessions such as eight weeks of free rent and keep rents competitive.
However, the construction pipeline for new multifamily units is expected to shrink substantially by the end of the year, raising questions about how long renters will continue to have the upper hand — and whether Las Vegas rents will eventually return to pre-pandemic norms.
Orphe Divounguy, a senior economist for Zillow, said Las Vegas is a clear example what happens when supply meets sustained demand.
The valley experienced a massive financing and building boom in multifamily units during the pandemic, which was fueled in part by historically low interest rates. This resulted in a wave of new apartments hitting the market over the past year and a half, depressing rental rates and giving renters a lot of options, added Divounguy.
“Property managers are competing for renters, and renters are in the driver’s seat,” he added. “At 15.5 percentage points, the jump in concessions over the past year is the largest of any top 50 metro in the country, and with rents essentially flat year over year, renters are seeing real affordability relief. This is the direct result of years of strong apartment construction in the Sun Belt. More units came online, vacancy stayed elevated, and landlords have had to sweeten the deal to fill them. Las Vegas is among the leading markets in the country for renter opportunity right now.”
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.
