MARKET SNAPSHOT: Las Vegas Recovers Select Jobs, Increasing Multifamily Sales
Feature - Daily Newsletter, Market Data, News, West
Feb 1, 2012
By Philip Shea, Associate Editor
Multifamily sales in the Las Vegas metro area increased by 59.6
percent between the third quarters of 2010 and 2011, this in concurrence
with the overall unemployment rate dropping from 15.5 percent to 14.2
percent. According to Real Capital Analytics, 4,612 units were sold
during the first three quarters of 2011, and the average unit price rose
to $51,082 from $43,560 the previous year. 
The rise in employment occurred mostly in the services industry,
while jobs in finance and construction remained stagnant. Colliers
International expects population growth in Southern Nevada to accelerate
in order to accommodate a return of employment along the strip, likely
rekindling development that was halted by the recession.
According to Colliers International, Class A properties saw vacancy
rates rise from Q1 to Q3 of 2011, while Class B and C properties saw
these rates decline substantially. As might be expected, the overall
decrease in vacancy rates caused asking rates for rentals to increase
considerably. The downtown area saw the average asking rate for a
one-bedroom apartment rise from $520 to $623. The Henderson and Green
Valley area saw these rates jump even higher, from $589 to $736.
Gary Banner, vice president of the multifamily division at Colliers,
does not foresee any improvement in the single-family market that might
affect trends in multifamily. “I don’t believe houses should be
investment property,” Banner says. “They’re not made for that.”
Banner adds that the vacancy rate for single-family homes in today’s
market stands at around 50 percent. “Those average rents typically start
at about $1,200 a month,” Banner says. “A Class A apartment tops out at
about $1,400. For those that do not have school-age children at home,
it would be wiser to rent in a market where the housing prices are still
falling.”
With respect to multifamily, downtown continues to be the area with
the highest renter occupancy rate, coming in at 63 percent in the third
quarter of 2011. Banner says that “momentum is building” in downtown,
and that this will only continue with the relocation of Zappos.com from
Henderson, Nev. to the former City Hall building at Las Vegas Boulevard
and Stewart Avenue.
Tony
Hsieh, the 37 year-old CEO of the online company, has already leased
incubator space for the building, as well as three floors of living
space in a high-rise condo for employees. Banner says that the overall
employee count will be around 2,000.
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