Our Backyard
For two years the knock on Las Vegas and Phoenix apartments has been the same: too many cranes, not enough renters to fill what gets built. The June rent numbers say that story is still playing out, but the demand side is quietly turning.
Start with rent. Apartments.com's June reading put Phoenix at negative 2.3 percent year over year and Las Vegas at negative 2.1 percent, the fourth and fifth worst among large metros, against a national figure that was flat at 0.8 percent. The only markets doing worse were San Antonio, Denver, and Austin, all metros that overbuilt into the same cycle we did.
That is the price of a supply binge. In Southern Nevada, Colliers pegged average asking rent at roughly $1,465 per unit in the first quarter, up all of four dollars from $1,461 a year earlier. Phoenix landlords gave back more: Colliers put the average effective rate down 4.8 percent to $1,479, with occupancy holding at 94.4 percent, up 0.4 points on the year. Occupancy steady while rent falls is the tell. Operators are trading price for heads in beds, which is the rational move when the competition down the street just delivered 300 units.
The pipeline explains why. Metro Phoenix still had 27,505 units under construction at quarter end, third most in the country behind only Newark and New York. Las Vegas is smaller but no less lopsided: Northmarq counted roughly 3,200 units delivered over the trailing year against net absorption of about 1,500, and another 4,200 units are slated to open in 2026, weighted to the back half.
Here is the case for patience. Clark County is still growing. UNLV's Center for Business and Economic Research projects the county's population up about 1.7 percent this year, near 42,000 new residents, with employment up around 1.1 percent. Those renters absorb units, just not on the schedule a 2022 pro forma assumed. Capital seems to agree the bottom is close enough to underwrite: Las Vegas multifamily traded roughly $1.2 billion over the trailing year, and the median price held at $234,400 per unit in the first quarter, up 3 percent, even as first-quarter closings ran under $100 million. Sellers are not capitulating and buyers are not chasing. That standoff usually breaks once rent growth turns positive, which is what the supply math sets up for 2027.
Our read: the pain in these two markets is a delivery-timing problem, not a demand problem. The lease-up discounts landlords are writing today are the last innings of the 2021 to 2023 development wave, not the start of a structural decline.
Asset Classes
Zoom out and the national picture is a mirror image of the local one, roughly a quarter ahead. CBRE's first-quarter data show the U.S. multifamily vacancy rate falling 20 basis points from the prior quarter to 4.8 percent, back below its long-run average of 5.0 percent. The reason is a clean flip: net absorption of 78,100 units outran construction completions of 58,100. That is the first time in three quarters that demand beat supply.
The supply side did the heavy lifting. Completions fell 30 percent year over year and are set to keep falling as the projects financed in the cheap-money years finish delivering and little new breaks ground behind them. That is the whole thesis for anyone holding apartments through this stretch. Rent is barely moving, up 0.2 percent year over year by CBRE's count to an average $2,217, but the forward supply curve is bending down while demand holds. When the last of the oversupply leases up, pricing power comes back to owners by default, not by any heroic demand surge.
Investors are not fully convinced yet. First-quarter transaction volume slipped 6 percent year over year to $29.5 billion. Bid-ask spreads are still wide, and the markets carrying the most unleased supply, our Sun Belt and Mountain West, are where sellers hold firm on price the longest. For an operator with dry powder and a tolerance for two or three more quarters of concessions, that gap is the opportunity. The fundamentals bottom before the sentiment does.
Sources
- Apartments.com, June 2026 Rent Growth Update
- Colliers, Las Vegas Multifamily Market Report Q1 2026 (via IRES Vegas)
- Northmarq, Las Vegas Multifamily Market Q1 2026
- Colliers, Greater Phoenix Multifamily Q1 2026 (via AZBEX)
- CBRE, Q1 2026 U.S. Multifamily Figures
- UNLV Center for Business and Economic Research, population and employment projections (via IRES Vegas)
Frequently Asked Questions
- Why are Las Vegas and Phoenix apartment rents falling when the national market is recovering?
- Both metros overbuilt during the 2021 to 2023 cycle and are still leasing up that supply. Phoenix had 27,505 units under construction at Q1 2026 and Las Vegas has about 4,200 more units due in 2026, so landlords are cutting rent to fill space even as national vacancy tightens.
- Is the multifamily supply wave over?
- Nationally it has peaked. CBRE reports Q1 2026 completions fell 30% year over year and net absorption outpaced supply for the first time in three quarters. Locally, Las Vegas and Phoenix still have another year of elevated deliveries to absorb.
- What does falling rent with stable occupancy tell you?
- It means operators are trading price for occupancy. Phoenix occupancy held at 94.4% while effective rent fell 4.8%, per Colliers. Owners are protecting occupancy through lease-up rather than pushing rent, a rational move when new competing units are still delivering.
- When could rent growth turn positive in Las Vegas and Phoenix?
- The supply math points to 2027 for the highest-supply Sun Belt and Mountain West markets. Once the current pipeline leases up and population growth catches up to deliveries, pricing power should return to owners.
- Are investors still buying multifamily in these markets?
- Selectively. U.S. multifamily volume fell 6% to $29.5 billion in Q1 2026, and Las Vegas traded about $1.2 billion over the trailing year with median pricing at $234,400 per unit. Bid-ask spreads remain wide in high-supply markets.