Las Vegas’ rental market has heated up in recent years, with investors buying cheap homes in bulk to lease out and landlords buying and building apartment complexes.
The growth in rental prices, however, is far from robust, a new report shows.
The median home-rental price in Southern Nevada was $1,214 a month in October, up 2.6 percent from a year earlier, according to Zillow. Nationally, rental prices climbed 4.5 percent in that time, to a median $1,382.
Las Vegas rental rates lag well behind the growth in local home values, which jumped 8.5 percent year over year to a median $196,600 in October. Nationwide, home values grew 4.3 percent this past year, to a median $182,800.
Investors flooded Las Vegas and other hard-hit cities after the housing bubble burst to scoop up cheap rental homes. The buying binge pushed up local home values at one of the fastest rates nationally, raising fears of another bubble.
However, investors have backed out Las Vegas in droves the past year or so, triggering a slowdown in home sales and price growth.
Apartment investors also flocked to Southern Nevada to buy and build properties, in no small part because of the housing crisis, which wrecked many people’s finances and ability to buy a place. Most of the construction today is in the southwest valley and Henderson, and some real estate pros have said developers might be overbuilding.
The apartment industry has gained speed nationally, as well. Billionaire Sam Zell’s Equity Residential, for instance, reached a deal last month to sell 72 properties in four states and Washington, D.C., to real estate mogul Barry Sternlicht’s Starwood Capital Group for about $5.4 billion, or roughly $230,634 per unit.
In Southern Nevada, by comparison, investors are paying an average of $80,401 per unit for rental complexes this year, according to brokerage firm Colliers International.
For its report, Zillow said the median home value was a snapshot of single-family homes, condos and co-ops, and the median rental price was a snapshot of single-family homes, condos, co-ops and apartments.