Multifamily Vacancy Stabilizes in Las Vegas as Supply Pressures Ease

While the pace of economic expansion across the local market’s key industry has slowed, multifamily property fundamentals in Las Vegas are being supported by strong demographic growth. Renter demand is being fueled by the formation new households; a surge in in-migration from other markets in 2024 spurred the largest annual population gain in Las Vegas since 2007. Developers are responding to these trends and have delivered approximately 15,000 new rental units to the market since 2022. As of the second quarter, more than 7,000 units were under construction, although properties are on pace to deliver over the next few years. Completions in 2025 will reflect a pullback from more active periods in 2023 and 2024. Many of the submarkets that led the way for new development in recent years, including Henderson, Northwest, and Southwest Las Vegas, are projected to post more modest levels of new units in the coming year.

Multifamily investment sales in Las Vegas accelerated over the past year, with transaction activity nearly tripling compared to the previous 12-month period. This increase in velocity has coincided with a rise in per-unit pricing. The median price in deals that have closed year to date is up to $262,800 per unit, considerably higher than pricing levels from recent years. The surges in volume and per-unit price levels were almost entirely driven by a significant increase in trades above $40 million, as investors primarily sought Class A and Class B properties built or renovated in the last decade. Despite the recent momentum, total sales volume over the past year is still down more than 50% from the 2021 peak.

Looking ahead

The Las Vegas multifamily market is expected to record fairly steady operational performance in the second half of this year, even as some of the market’s key economic drivers are expanding more slowly than in recent periods. Visitor volume has cooled to this point in 2025, following strong gains in 2024 that were brought on by the Super Bowl and other events. The city’s vital leisure and hospitality sector has posted slower rates of growth year to date as a result. Despite some near-term softness, infrastructure and redevelopment projects are expected to support long-term housing demand. Redevelopment of the former Mirage into a Hard Rock Hotel & Casino will bring more hospitality-driven economic activity by early 2027 and Las Vegas is adding a Major League Baseball team beginning in 2028.

A strong close to the second quarter signals a potential acceleration in investment activity through the remainder of 2025. Several Class B properties built in the 1990s sold in the second quarter, as buyers and sellers began to align more closely on pricing and cap rate expectations. Early indicators suggest this momentum will continue into the third quarter, putting the market on pace to exceed total transaction volume from the prior year. Middle- and lower-tier assets are expected to remain the primary focus of buyers, though a rebound in Class A trades is possible as recently delivered properties are leased-up and are put on the market. Historically, Class A assets have represented roughly 15% of all multifamily transactions, but that figure declined to around 10% since the second half of 2024, with Class B product accounting for a healthy share of recent activity.

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