According to the Nevada State Apartment Association, vacancy rates are climbing in the Reno-Sparks housing market.
Their latest market report states that the area has an 8.8% vacancy rate, correlating to new inventory and more than 1,2000 units available.
As vacancy increases, rents could continue to decrease with the average rent currently sitting at $1,540.
“The Reno market has been in a pattern of growth for the past decade, particularly during the pandemic, due to affordability and the benefits of the region,” said Robin Lee, Executive Director for the Nevada State Apartment Association. “That demand forced new construction to run rampant in order to catch up, which has now led to more apartments than renters. This correlation decreases average rent prices.”
Reno has 300 more units entering the market bringing the availability from 700 in Q222 to 1,000 Q223.
Currently, 3,100 new units across 19 new multifamily properties are under construction with South Reno and Sparks sharing the lead for development.
These new projects will increase inventory by another 7%, and leave the market at risk of oversupply, further dictating average rents in the region.
Rent in the Reno-Sparks area is still lower than the national average of $1,670 a month.
Interestingly, higher-end inventory, traditionally known as luxury apartments, has greatly outperformed the rest of the inventory. Renters in Reno prefer larger units, contrary to the national trend which has seen a shift towards smaller units with more amenities.
Nearly half of the planned projects in the works are rated as ‘4-stars,’ demonstrating that higher-end inventory is likely to be a permanent staple in the Reno-Sparks market.
“This is an exciting time for the region as new projects come online, providing renters with more choices in the place they choose to call home,” said Lee. “As the voice of the multifamily housing industry, we look forward to continuing to support our housing providers while serving as a resource for the community about the industry.
(The Nevada State Apartment Association assisted with this report.)
