Las Vegas Apartment Rents Up

(Above) Graphic showing Las Vegas growth

From In Business Las Vegas:

The growth in apartment rents is beginning to slow in the Las Vegas Valley as more and more residents move out of their complexes because they can no longer afford their leases, according to a tracking firm.

Apartment lessors requested average rents of $872 during the first quarter, a 4.3 percent increase over the $836 sought in the first quarter of 2006. That's a bit of a break for tenants because landlords were seeking a 6 percent increase a year ago, according to local research firm Applied Analysis.

The rising rents lowered occupancy to 94.1 percent in the first quarter. It stood at 95.4 percent during the fourth quarter.

Competition from condos and single-family homes, many with rental prices that have been attractive, have had an impact as well, said Applied Analysis Principal Brian Gordon.

"The escalation of prices has been challenging for some consumers to afford in certain portions of the valley," Gordon said. "They are moving to more affordable parts of the valley or out of the market in some cases."

The rental rate growth of 4.3 percent outpaces the rate of inflation, but it is better for consumers than the increase of 5 percent to 7 percent in recent years, Gordon said. He said rental growth should remain steady at 4 percent for several quarters.

Despite the drop in occupancy and slowdown in rent growth, the dynamics of the market will improve for apartment owners because of the large number of construction jobs and casino jobs being created in the next two to three years with development along the Strip, Gordon said.

In addition, many residents who lose their homes through foreclosures will also be moving into apartments, he said.

Among highlights of the report:

Henderson and the southeast had the highest rent at $977 a month. That was followed by the southwest with $975, northwest with $883, south with $878.

The northeast had the lowest rents at $770 a month. The west had $870, the north, $860 and the central and east had $817.

The northwest had the highest growth rate at 6.4 percent while the northeast has the lowest growth rate at 2 percent.