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Tourism Boosting Market for Reno Apartments

Nevada City Gaining Jobs at Fast Pace

By Carl Whitaker | Friday, September 16, 2016

The market for Reno apartments continues to exhibit impressive growth, with 15.8% annual effective rent growth as of August 2016. That rate is even more exceptional when compared to the market’s cycle average (2010-2015) of 3.0%.

Reno recorded the highest rent growth among all markets in the Axiometrics top 120, which is based on number of units. The second-ranked metro area – Sacramento – posted annual rent growth of 11.6%. Direct comparisons between Sacramento and Reno are somewhat difficult, as Sacramento is substantially larger, but 4.2-percentage-point spread between the Nos. 1 and 2 metros speaks to Reno’s exceptional performance.

So why has Reno seen such impressive rent growth in 2016, especially compared to its cycle average?

One reason has been continually strong job-growth numbers. Annual job growth in Reno as of July 2016 was 3.9%, one of the strongest rates in the country. While many other metros have seen moderate to slightly declining job growth, Reno has jumped more than 70 basis points (bps) between 2015 and 2016.

The Mining, Logging and Construction industry has seen the most growth, with a 10.7% increase for the 12 months ending in July.

Meanwhile, Reno-area authorities issued a staggering 1,035 multifamily permits in 2015. Compare this to the 369 and 374 permits issued the preceding two years, and the construction boom in Reno becomes more apparent. Tourism has been a cornerstone in the greater Reno economy for decades, and the increase in tourism in the area has helped create jobs, stimulating the local economy.

Reno’s rent growth is almost triple that of Las Vegas, which recorded 5.6% annual growth in August, which was still among the nation’s leaders. As long as tourists continue to flock to Nevada cities, jobs will be plentiful and the apartment markets will remain strong.

Carl Whitaker

Carl Whitaker

Real Estate Analyst

Carl Whitaker is a Real Estate Analyst for Axiometrics.

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