Rents continued to trend downward while occupancy rates have leveled off within the professionally-managed apartment market in Las Vegas. As of the close of the second quarter of 2010, valley-wide average asking rents of $765 per unit per month, or $0.85 per square foot, edged downward (-1.5 percent) from $777 per unit during the previous quarter (Q1 2010). On a year-over-year basis, average asking rents remain down a more significant 10.7 percent. The latest rent figures reflect price points not witnessed in six years (or since Q2 2004).

Prolonged weakness in the for-sale residential and labor markets combined with flat to negative population growth continue to impact fundamentals in the apartment market. Operating margins remain slim as rents are down and occupancies hover below historical norms. Current market dynamics have forced property owners and managers to reevaluate pricing structures, including concessions, to compete, while attempting to balance debt service requirements.

Despite a decline in average asking rents, average occupancies within the Las Vegas valley turned up slightly for the second consecutive quarter. During the second quarter of 2010, the market posted an average occupancy rate of 90.7 percent, up 0.1 percentage points from the previous quarter (Q1 2010). Average occupancies also remain up 0.2 points from a year ago (Q2 2009) but significantly below historical norms, with 5- and 10-year market averages of 93.2 percent and 93.7 percent, respectively.