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Nevada

Average rent for an apartment in Reno falls for the second quarter in a row

 

Rents for an apartment in Reno-Sparks fell towards the end of last year – the second straight quarter that the area’s average monthly rent has been declining, according to two separate apartment reports.

The median rent in Reno fell to $1,625 a month in the fourth quarter of 2022, down from $1,654 in the previous quarter, according to the latest data from appraisal and consulting firm Johnson Perkins Griffin. Overall, rents continued to fall as Reno-Sparks posted a median rent record of $1,680 in the second quarter of last year.

More about housing:The average house price in Reno fell to its lowest level in a year and a half; Sparks drops below $500,000

Median rent also dropped in the Nevada Apartment Association’s quarterly survey.

The NVSAA report, based on data from commercial real estate company CoStar, lists the median rent at Reno-Sparks at $1,490. That number is down from $1,520 the previous quarter and $1,493 year on year.

“The continued rise in rents in Reno is likely due, at least in part, to a wave of apartment building across the area, with 1,300 new apartments added in the past year,” said Robin Lee, chief executive of the NVSAA. “Most likely, demand will struggle to offset supply pressure in the coming months due to the massive inventory build we are seeing.”

In addition to adding about 7,200 apartments over the past five years, Reno-Sparks is also building about 3,900 apartments, according to the NVSAA, increasing the local supply of apartments by just over 9%.

More:Reno apartment rents fall as vacancy rates reach highest level since COVID-19 pandemic

Median rents have fallen in nearly every neighborhood in Reno Sparks, Johnson Perkins Griffin found. Southeast Reno, Northwest Reno, and Northeast Reno showed the biggest declines, at $56, $54, and $48, respectively.

Only in two out of 11 Renault Sparks submarkets did the average rent increase. In the airport sub-market, the average monthly rent rose by $12, while the city’s downtown market, which includes downtown Reno and downtown Sparks, saw an increase of $129.

While the two reports noted an increase in the average rent, they differed in the level of vacant apartments.

Data from Johnson Perkins Griffin showed an average vacancy rate of 3.04%. This number is down from 3.44% in the third quarter.

On the contrary, the number of vacancies increased in the NVSAA report.

The vacancy rate at Reno-Sparks was 8.5% in the fourth quarter of last year, up from 7.5% in the previous quarter.

By the end of the year, apartments with one bedroom and one bathroom were in the highest demand, as well as apartments with two bedrooms and two bathrooms. According to Johnson Perkins Griffin, these two types of apartments were the only ones that saw a decrease in vacancies, while other types of apartments saw an increase in vacancies.

At the same time, the number of apartments offering rental incentives has also increased.

According to a report by Johnson Perkins Griffin, in the fourth quarter of 2022, nearly a third of apartments offered tenant benefits. This number rose from 22% in the previous quarter and almost 6% in the second quarter. This is also the highest share of apartments offering concessions in Reno-Sparks since the first quarter of 2015.

The most popular rental perks offered to tenants were either reduced rent for six or 12 month leases or free one month rent for six or 12 month leases.

The flattening of rent growth in Reno comes at the same time as the normalization of the Reno-Sparks housing market after both sectors saw significant increases in rents and average home prices during the pandemic.

The median selling price for an existing home in Reno Sparks fell to its lowest level in a year and a half in December at just under $520,000. In addition to falling home prices, home inventories have also jumped significantly, while homes are also staying on the market longer as the Federal Reserve raised interest rates several times to curb high inflation.

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