How has COVID19 affected the Las Vegas rental market so far?

Everyone wants to know how the Coronavirus will affect the housing market in Las Vegas. While no one can predict the future, we can certainly look at current data and compare the same time period this year versus last year. I am not here to make predictions, but to present some data and discuss what it could mean. From there you can draw your own conclusions.

Yesterday I pulled the MLS numbers for all of Las Vegas, on rental properties leased for 1 year or longer. I purposely excluded shorter term leases for obvious reasons. I ran the dates April 1 – May 28, 2019. Then for April 1 – May 28, 2020. I am only looking at LEASED properties and LEASED prices, to show the rent prices people actually paid, along with the time to close.

Las Vegas rental data during COVID-19 Shutdowns

DOM = Days on Market – the time it took to get a qualified renter. I pulled the numbers for all Las Vegas rental properties for the same time period in 2019 vs 2020, then broke it down into these rent price categories:
1) Up to $1400
2) $1401 – $1999
3) $2000 and up

Here is what the data looks like for all rental properties in the Las Vegas MLS, April 1 – May 28, 2019:

Overall rentals closed 4-1-2019 to 5-28-2019

For the same time period in 2020: (notice rent prices basically did not change, and the average and median days on market increased significantly)

Overall rentals closed 4-1-2020 to 5-28-2020

Las Vegas rentals, priced up to $1400

April 1 – May 28, 2019, homes leased up to $1400 per month:

Rentals up to $1400 closed 4-1-2019 to 5-28-2019

Same time period in 2020, homes leased up to $1400: (pricing basically unchanged, while average and median days on market increased significantly)

Rentals up to $1400 closed 4-1-2020 to 5-28-2020

Las Vegas homes rented at $1401-1999

April 1 – May 28, 2019, rental homes priced $1401 – $1999:

Rentals priced $1401-1999 closed 4-1-2019 to 5-28-2019

Same time period in 2020, rental homes priced $1401 – $1999: (time on market significantly increased + the number of properties rented increased)

Rentals priced $1401-1999 closed 4-1-2020 to 5-28-2020

Las Vegas homes leased at $2000 and up

April 1 – May 28, 2019, rentals priced at $2000 and up:

Rentals priced at $2000 and up, closed 4-1-2019 to 5-28-2019

Same time period in 2020, rentals priced $2000 and up: (slight increase in time on market + prices increased very slightly)

Rentals priced at $2000 and up, closed 4-1-2020 to 5-28-2020

General LV rental market info

This is supposed to be the early half of the busy leasing season (April – July is primetime). Obviously the COVID-19 shutdowns and “shelter in place” orders affected the Las Vegas rental market during this time. However what’s not obvious, is where the renters came from. From my own anecdotal evidence, we are still seeing lots of people moving from other states to rent homes in Las Vegas. The tenants I recently placed, came from other states. We see tons of out-of-state tenant prospects with every listing.

I have also seen record high lease renewal rates (almost every single lease that has come due this season, has been renewed). My property manager peers around the country are reporting similar data – record high lease renewal rates. Not necessarily rent increases, but the number of renewals is through the roof.

Newcomers vs local workers

Unfortunately, about 1/3 of Las Vegas workers have been laid off. No matter what jobs they had, this is a LOT of unemployment. An estimated 40% of small businesses are expected to close nationwide. Many of the massive lay offs are going to be extended or will become permanent. There are about 200,000 workers who were employed by casinos in Las Vegas (vs ~2.5 million population in the metro area), and rumors have been floated that less than 30% of them will get back to work in the next few months. In addition, many companies around the country have been cutting worker pay. This will surely affect consumer spending, which will affect jobs.

Everyone knows tons of people are leaving California, and many of them are coming into Las Vegas. People are riding high on the newly printed government money right now, but what happens in 6+ months, when thousands of local jobs don’t come back? Even when everything is allowed to reopen 100%, Las Vegas is not going to see the same pre-COVID tourism levels for a while. It seems unlikely that this mess won’t impact the local housing market. Even if Californians keep coming in droves, there may be fewer locals to compete with, so demand may still be reduced as compared to recent years.

Only time will tell if we see a drop in housing / rental prices in Las Vegas. Since I don’t have access to that crystal ball, I’ll leave you to draw your own conclusions.