A comprehensive examination of the Las Vegas apartment market shows that the major concentrations of competitive apartment space are located in the Henderson/Southeast submarket, amounting to 26,001 units and 18.9% of the metropolitan inventory, followed by North, with a 16.4% share, and West (15.7%). Since the beginning of Q1 2005, the fastest growing area has been the North submarket, adding 6,304 units over that period, or 37.8% of total metropolitan apartment completions.
Asking And Effective Rent
After registering positive movement during all three months of the fourth quarter, for a total increase of 0.6%, average asking rents in the metro continued to advance by 0.3% in January to $881. Mean unit prices in the metro are as follows: studios $609, one bedrooms $776, two bedrooms $931, and three bedrooms $1,112. The market has now experienced ten consecutive monthly gains in asking rent, for a cumulative total of 2.6%. Since the beginning of Q1 2005, the metro as a whole has recorded an annual average increase of 1.5%. Effective rents, which exclude the value of concessions offered to prospective tenants, also advanced by 0.3% during January. The identical rates of change reveal that landlords have succeeded in raising rents while maintaining a stable relationship between asking and effective rent values. Positive movement in asking rent was recorded in all eight of the metro's submarkets.
Competitive Inventory, Household Formations, Absorption
Net new fourth quarter household formations in the Las Vegas metropolitan area were 4,230. Typically, changes in the total number of households are at least partially reflected in the average occupancy levels of market rate apartment units; therefore, it is useful to consider longer-term economic and demographic performance as a factor affecting current absorption rates. Since the beginning of Q1 2005, household formations in Las Vegas have averaged 2.0% per year, representing the average annual addition of 14,100 households. During January, net absorption totaled 218 units, while there was no new development; the net effect of absorption and construction dynamics caused the vacancy rate to drift downward by 10 basis points to 4.9%. Over the last 12 months, market absorption totaled 1,558 units, sharply higher than the average annual absorption rate of 307 units recorded since the beginning of Q1 2005. In a long-term context, January vacancy rate is 2.0 percentage points lower than the 6.9% average recorded since the beginning of Q1 2005.
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