Rents continue to drop in the Las Vegas Valley because of a glut of apartment supply that was financed during the pandemic and is now spilling onto the local market, according to a real estate analyst.

Las Vegas was one of the few major U.S. markets where rents declined month over month in April, according to a new report from Apartments.com, which is owned by CoStar Group.

While national apartment rents rose 0.2 percent in April and 45 of the top 50 markets posted monthly increases, Las Vegas moved in the opposite direction, with rents down 0.2 percent from March, according to the report.

Danny Khalil, the director of market analytics for Apartments.com in Las Vegas, said a pandemic financing boom in the valley for multifamily construction has brought a wave of new product onto the market, depressing rents.

“What is striking about Las Vegas’ performance in April is that it joined only four other major markets in the U.S., San Antonio, Houston, Fort Lauderdale, and Tampa, to post a negative figure for rent growth between March and April,” he said. “The other 45 markets saw positive growth during that period of time.”

During the pandemic in the U.S., interest rates bottomed out because of Covid lockdowns, restrictions and supply chain issues, which kicked off a financing boom in the valley when it came to multifamily complexes. Most of those projects have now come onto the market, largely in areas like the southwestern portion of the valley, increasing choices for renters and depressing rental rates. This has been coupled with a marked slowdown in the valley’s population growth the past two years due to a number of factors.

“The largest driver of rent growth trends in April is still the supply wave of the early 2020s,” said Khalil. “If a given market was largely spared the wave of development that affected many markets between 2021 and 2025, such as Pittsburgh, rents are probably growing right now. If, on the other hand, the market was affected and saw an increase in construction during that period of time, like Las Vegas, rents are likely falling.”

The overall apartment market is fairly uneven right now, added Khalil, adding there is no real consensus nationally and each metro region seems to be operating under its own market dynamics.

“There is significant variation between markets,” he continued. “For example, development-heavy Austin saw rents grow at a fast clip in April. Tucson, which saw only a very modest wave of construction earlier in the decade, witnessed flat rent growth between March and April. So, clearly there is more to the story than simply supply.

Regarding the valley, the market’s persistently high unemployment rate has created a sort of ceiling that is limiting things even further, added Khalil. While it has shrunk, and things have improved since the shock of 2020, unemployment in Las Vegas stands close to 5.8 percent today, above the national average of 4.3 percent.”

However there should be a seasonal uptick in rental rates for May, he added.

“The change from March to April tends to be positive for rent growth, as it marks the beginning of the spring leasing season, which traditionally sees an increase in demand for housing in general—both multifamily and single-family,” said Khalil.

In February, Zillow released a report that found about half of all rental listings in the Las Vegas Valley were offering concessions right now including cash back, free months rent and other perks.

Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.