Las Vegas Comes Up Empty-Handed

Las Vegas’ economic travails have led to a spike in Las Vegas apartment vacancies and tumble in rental rates. According to research firm Applied Analysis, demand for professionally managed apartment communities in the area fell to its lowest level since the beginning of 2003.The market recorded average occupancies of 92 percent in the fourth quarter of 2008, down from the previous quarter’s 93.7 percent and from the 92.3 percent reported during the fourth quarter of 2007. The rates also fall considerably below the historical five-year historical average of 94.6 percent and 10-year average of 94.4 percent.Additionally, average asking rents reached $881 per unit per month, a decrease of 1 percent from the $890 per unit reported for both the third quarter of 2008 and fourth quarter of 2007. The fourth quarter of 2008 also represented the first negative growth rate in almost a decade, the report said.Applied Analysis principal analyst Brian Gordon noted in commentary accompanying the report that apartment landlords face stiff competition from for-sale residential properties. “Within the for-sale residential market, bank-owned properties represented the lion’s share of sales activity, and prices have plummeted to below replacement cost. Competitive pricing within the for-sale market and a deteriorating employment picture have apartment landlords struggling to maintain occupancy and price points. This trend is likely to continue in the near term.”Indeed, better times for Las Vegas’ apartment landlords may arrive only with brighter employment prospects for Vegas residents. The report noted that valleywide unemployment grew to 9.1 percent at the end of 2008, a stark contrast to the 5.1 percent of a year ago. The area lost 15,500 jobs during the fourth quarter, 11,300 of them in the construction sector.