Las Vegas multifamily market report

The vacancy rate in Las Vegas' multifamily sector is inching closer to double digits, reaching 9.7% by the end of Q1 2024 for properties with over 50 units. In fact, the vacancy rate is higher than pre-pandemic conditions, growing by 340 basis points from Q1 2019. Despite population growth and stable unemployment rates since the pandemic, multifamily vacancies have continued to rise. Currently, Nevada's unemployment rate stands at 5.3%, showing a gradual decline year over year. However, this improvement in unemployment rates does not correspond with the increasing demand for multifamily housing.

Absorption rates are positively impacting Las Vegas' current multifamily market. Despite increasing vacancies, Q1 2024 saw 1,855 units of net absorption, marking the highest absorption quarter in the past year. This marks a significant rebound from the consistent negative absorption experienced from Q3 2021 through the end of 2022.

In 2023, the total absorption reached 2,869 units, with the peak occurring in Q2 2023 at 1,112 units. The performance of Q1 2024, surpassing the highest quarter of 2023, indicates promising momentum for the future.

Since the end of 2022, transaction volume in the multifamily market has significantly decelerated, consistently falling below $100 million quarter over quarter for the past year. In Q1 2024, only one transaction was recorded at $7 million, equating to $112,903 per unit. This is a stark contrast to the previous quarter's $57.6 million and even further from the market's historical transaction values. For perspective, just two years ago, Q2 2022 saw over $1 billion in sales, indicating a 99% decrease in transactions from then to Q1 2024.