Las Vegas’ rental market speeds up with rising prices

With a barrage of buyers going after a small supply of listings, Las Vegas’ housing market is accelerating at a rapid pace.

But across the valley, homebuyers aren’t the only ones facing higher prices and fewer choices.

Southern Nevada rental prices are rising at one of the fastest rates in the nation, a new report shows, and real estate pros say demand is fierce and inventory is minimal.

“It really is unprecedented,” said Brian Hartsell, owner of Key Property Management.

Las Vegas-area rental home prices jumped 11.3 percent year over year in April, to a typical rate of $1,460 per month, according to a report this week from listing site Zillow.

The valley’s rent growth was fourth highest among the 50 metro areas listed in the report, behind only Memphis, Tennessee (11.8 percent), Phoenix (13.4 percent) and Riverside, California (14.9 percent). Nationally, prices rose 3 percent in the past year, according to Zillow, whose report covers all types of rental homes.

Like other industries, Las Vegas’ rental market faced turmoil and questions after the coronavirus pandemic hit. Many tenants tapped unemployment benefits, stimulus funds or other programs to pay their rent amid huge job losses, and landlords have faced heightened competition from the for-sale market as rock-bottom mortgage rates fuel a homebuying frenzy.

But as people work from home without the need for a commute and as sellers who cashed in on the buying binge need a place to live until their new house is ready, plenty of people are looking for rentals.

‘There’s no worry’

Audri Schultz, leasing coordinator with property management firm Shelter Realty, said that within an hour of listing a home, 15 agents are calling to show it to someone or to fill out a rental application.

“People are getting desperate,” she said. “They’re not viewing them first. They’re applying sight unseen.”

Schultz also said that at least 50 percent of her landlord clients are raising rents now, compared with maybe 20 percent at any given time before the pandemic.

Low inventory and high demand are making it increasingly difficult to find a place. Landlords aren’t worried their tenants will move out, Schultz said, unlike in the past when they were concerned about losing a renter and how long the home would sit empty before someone moved in.

“There’s no worry now,” she said. “Absolutely none.”

Hartsell, of Key Property, said the supply of available rentals across the valley is the lowest he’s seen in his 20-year career. As seen on a search of the region’s main listing service Thursday morning, only about 990 homes were available for rent, he said.

Not every rental goes into that database, but a “comfortable” market would have around 5,000 available units, Hartsell said.

‘The demand is incredible’

Government-ordered eviction freezes — aimed at keeping people in their homes amid the pandemic and the soaring unemployment brought on by the outbreak — have probably crimped the number of rental units that could have become available in the past year.

But as Hartsell noted, Las Vegas is also seeing an influx of people from more-expensive markets who are coming here to work from home or to retire.

Landlords know that their tenants don’t have many options if they want to move out, helping fuel the rent hikes, he said.

Robert Broad, senior vice president of development for the Western U.S. at American Homes 4 Rent, a dominant landlord in Southern Nevada and other markets, said his firm has more than a dozen rental-housing tracts in various stages of development in the Las Vegas area.

Most of its homes in the valley have a signed tenant in place before the newly built place is ready for move-in, he indicated.

“That’s not been the past experience,” he said. “The demand is incredible.”

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.