$7K-a-month rental homes hit market in south Las Vegas

High-end homes have hit the market for rent in the southwest Las Vegas Valley in a clear sign of a shifting housing market in Southern Nevada and the rest of the country.

Rents for 50 luxury attached properties, or duplexes, at Seneca at Southern Highlands, located southwest of the South Point Hotel Casino &Spa across Interstate 15, range from $4,500 to $7,000 a month for two- and three-story homes with three or more bedrooms. The newly built homes range in size from 2,200 to 2,700 square feet. Community amenities include a pool, dog park, barbecues, dining area and shared garden.

Seneca President Michael Stuhmer said the company saw where real estate was heading when they bought the land three years ago and the rise of the “build-to-rent” market across the U.S.

“I think the psychology around renting is shifting,” he said. “The American dream has always been to own a home and obviously it’s become way less affordable for people to do that, and people also have a lot more alternatives to where they are placing their money now rather than a down payment.”

Luxury rentals homes are rare in the Las Vegas Valley, and Stuhmer said he is aware of only a few projects in Clark County. Sotheby’s International Realty has 15 luxury home rentals in the Las Vegas Valley on its website, but only five are under $8,500 a month to rent.

Build-to-rent boom

The build-to-rent sector boomed in 2023, as RentCafe estimated that 44,700 homes were under construction last year across the U.S., triple the number in 2022. The entire market has grown 47 percent since 2021.

The high-income rental demographic — people who make more than $150,000 a year — has also grown approximately 82 percent over the past five years, according to RentCafe, which pulls its data from parent company Yardi.

Stuhmer said high interest rates and increased home prices are playing into housing market decisions right now, and renting offers a “flexibility” given the current economic climate, even for wealthier people.

Additionally, the average price for a house in the Las Vegas Valley has increased 11 percent year over year and now sits at $422,995, according to Redfin.

“I also don’t think the stigma of renting is like it used to be,” Stuhmer said. “And I think a lot of it is a lifestyle choice, there is a convenience to renting right now, of not getting tied down to a mortgage.”

Rental rates in the Las Vegas Valley also increased 12 percent in 2023, according to a new report from Construction Coverage. The report, which used U.S. Department of Housing and Urban Development and Census Bureau statistics, said the average rent in the valley was $1,773 at the start of 2023, and now sits at $1,984.

Mortgage rates currently sit at 6.7 percent for a 30-year fixed term. according to Redfin, down from a two decade high in October 2022, but rates are still the highest they’ve been since before the Great Recession in 2008. This has pushed many would-be buyers into the rental market and forced househunters to seriously consider if they can shoulder the burden of high monthly payments, Redfin chief economist Daryl Fairweather said.

Redfin estimated last fall the average Las Vegas household now needs to make well over $100,000 annually to be able to afford a mortgage for a home in the valley. Wall Street-backed hedge funds, institutional investors and corporate landlords own approximately 15 percent of the single-family rental housing market in the Las Vegas Valley, a number that has been steadily rising for years and has taken thousands of properties out of the homeowners’ pool.

“One area where many Americans continue to struggle, however, is the cost of housing,” said Jonathan Jones, the author of the Construction Coverage report. “Increased rents have been one of the persistent factors underlying the price increases of the last two years, as a major component in several common measures of inflation. With high home prices and mortgage interest rates pricing many would-be buyers out of the residential real estate market, rentals have been highly competitive.”

Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.