Las Vegas Multifamily Transaction Volume Ahead of 2024 Pace

The Las Vegas multifamily market is experiencing the effects of recent elevated construction totals and a supply-demand imbalance. Since 2022, developers have completed roughly 15,000 units, lagging the elevated totals from most Sunbelt markets during the same period, but increasing area inventory levels. New properties were moved into the development pipeline to meet the anticipated new renter demand fueled by population expansion that has averaged between 1.5% to 2.0% annually for more than a decade. In recent years, demand has been positive, but uneven, lagging the pace of the new construction. The result has been a vacancy rate that has pushed higher. Rents had shown signs of stabilizing, but declined in the third quarter. Still, the bulk of the new supply growth has already occurred; deliveries peaked in 2023 and developers are now pulling back. Only 4,600 units remain under construction, the lowest total in nearly five years.

After a particularly strong period of transaction activity at the start of 2025, the Las Vegas multifamily investment market continued to gain momentum during the third quarter, with sales velocity hitting a 2025 high. While transaction counts remain similar to the same period last year, total sales volume has risen significantly. Year-to-date volume ended the third quarter at more than $1 billion, a 20% increase compared to the same period in 2024. This increase in dollar volume highlights the popularity of larger, institutional-grade deals, with the average transaction size expanding to 300 units. While interest rates have begun to soften, cap rates have mostly stabilized, with the majority of sales occurring with cap rates between 5.0% and 5.5%. Per-unit prices have pushed higher, reflecting the shift toward larger assets, with newer buildings accounting for a greater share of the property mix in 2025 than they did in 2024

Looking ahead

The Las Vegas multifamily market is expected to experience modest softening through the end of 2025. While leasing activity continues, the pace of deliveries is expected to taper in the fourth quarter. New supply is likely to outpace demand by year-end, resulting in a slight increase in vacancy from current levels. Over the longer term, however, supply-side pressures should ease significantly. The current construction pipeline includes nearly 30% fewer units than at its peak a few years ago. With new deliveries consistently outpacing construction starts, the competitive impact of new supply is on track to lessen beginning in 2026. Recent absorption levels have lagged new supply, largely due to below-trend employment growth. A sustainable recovery in demand will require a return to more historical patterns of job growth.

The recent accelerating pace of transaction activity could serve as an early indicator of a thawing in the multifamily sales environment. Third quarter closings roughly matched the combined totals from the first and second quarters, and if this trend continues, 2025 total sales volume could equal or surpass that of 2024. The most recent quarter had a mix of newer properties as well as older vintages changing hands. Transaction patterns in the coming months will be telling, revealing if this surge was an isolated event or if expectations between buyers and sellers have narrowed to the point where more deals can get done. Cap rates have not pushed considerably higher since the beginning of 2024, and with interest rates showing signs of easing, cap rates will likely remain near current ranges.

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