MultiFamily Market Review
Multifamily vacancy declined in the fourth quarter of 2011, dropping to 7.3 percent, a decline of 0.7
points from the third quarter of 2011. Performance was positive for all property classes, with the
largest decline in vacancy being experienced in Class C product. Quarterly net absorption was
positive for all classes of multifamily, but not in all submarkets. Negative net absorption was
experienced in the East, Northeast and Southwest submarkets in the fourth quarter of 2011. For the
year as a whole, Southern Nevada’s multifamily market absorbed 1,238 units, most of this in the
Summerlin West, Downtown and Henderson/Green Valley submarkets. Class A multifamily had
positive net absorption of 199 units for the fourth quarter, but year-to-date net absorption was a
negative 56 units. Asking rents remained stable for one-bedroom apartments in the fourth quarter of
2011 and were down for two- and three-bedroom units. The only market segments to see rising
asking rents in the fourth quarter were one-bedroom apartments in the Downtown and Henderson/
Green Valley submarkets.
Class A multifamily now has the highest vacancy among classes in Southern Nevada, possibly from
a combination of high-end renters cycling back into single family residences and others moving into
Class B properties, which now have the lowest vacancy among classes at 6.2 percent.
Over the past 12 months, Southern Nevada added 9,000 new jobs, primarily in leisure and hospitality
and the professional and business services sectors.
The big job losers these past twelve months have
been financial activities, trade, transportation and utilities and government. Unemployment in the Las
Vegas-Paradise MSA stood at 12.5 percent as of November 2011. As people get back to work, the
multifamily they seek out may shift from older Class C to newer Class B or A properties.
SEE ATTACHMENT FOR REST OF MARKET REVIEW