The Las Vegas Area Rental Market is in Decline! It isn’t in a free fall like our resale market experienced in 2007-2008 but it is declining slowly.
Here are the reasons for the decline:
- First time buyer pent up demand was released during the time when the first time buyer tax credit was available. This has created less demand.
- An over abundance of all cash investors making purchases for long term holds (renting in the mean time!) This has created more supply.
- Less population growth in the Las Vegas Valley. This has created less demand.
- Unemployment rate of 15% which isn’t enticing for incoming residents. This has create less demand.
- Builder inventory thrown into rental pool. This has created supply.
With an abundance of supply coupled with less demand it has created downward pressure on rental prices. Resale prices are VERY low, yes. It is essential to get comprehensive rental CMAs when looking at property. Here is a resource & tutorial for searching rental or resale comparables.
Neighborhood vacancies need to be looked at also. If resale prices are very cheap, there are an abundance of vacancies in the neighborhood, odds are other cash investors looking at those properties.
Remember the old adage: past performance is not indicative of future returns!
Hi Renee,
I was just reading an artice in the Business Press that said apartment rents continue to drop as well, but occupancy is up. This has to impact the condo rental market, as they are pretty much in direct competition for the same tenant type. Do you have any stats on condo HOA fee trends? I’d bet they are increasing, thus putting a double crunch on the investor’s return.
Just happened upon your blog. Loved this post. . .very informative and what you say makes a lot of sense. Just hope that rental prices come down soon as I'll be moving in the next few months. It's interesting that they are still so high. Guess landlords have to learn the hard way (vacancies), huh? Thanks for the good read.
They do have to learn the hard way and Leeza thanks for stopping by and taking the time to comment!