Las Vegas: Yanking Off the Band-Aid
As we begin to delve into year-end 2010 apartment market performances for individual metros across the country, let’s go ahead and get the really painful one out of the way. Probably no surprise for anyone, the nation’s most significant apartment market that continued to see revenues drop substantially over the course of the past year was Las Vegas.
Effective rents in Vegas apartments tumbled another 5 percent during 2010, taking total loss over the past three years to a stunning level of almost 16 percent. Substantial declines in pricing power continued to register in every single neighborhood and every single product niche during the past year.
On the occupancy side of the revenue equation, Las Vegas apartments recorded a year-end 2010 rate of just 89.9 percent, more than 3 percentage points under the U.S. average. There was some progress in occupancy during the past year, however. The overall rate moved up by 1 percentage point. Furthermore, there is one neighborhood — Henderson/Green Valley — that posts occupancy in reasonably decent shape at 93.2 percent.
MPF Research is anticipating that Las Vegas once again will take that last-place position for apartment market performance across the country during 2011. However, the sort of good news is that last place in 2011 should translate to mildly positive revenue change, rather than further loss.