The results dropped the year-to-date average sale price to $102,200 per unit from $103,100 at mid-year, according to Mike Belnick's quarterly Apartment Insider report, which tracks the sales of all apartment complexes with at least four units. It is the first time in many quarters--if not many years--that the average per-unit sales price has not increased from quarter to quarter. The average sale for all of 2005 was $88,700; the average sales price for 2004 and 2003 was $68,700 and $54,600 respectively.
"If there's any reduction in price, it's because we're selling more B and C-class product because the A product has pretty well turned over to a high degree due [in part] to condo conversions," Belnick tells GlobeSt.com. "So what we are getting is more of that mid-priced property that is changing hands, which is reducing the overall overages. But with the current sales I'm picking up now, [the average per-unit sales price] is going to start shooting up again because pricing is so strong."
The third quarter saw 5,629 units change hands in 126 transactions, according to Belnick, who hangs his shingle at ReMax Central Commercial and has been tracking the local apartment market for 14 years. In the second quarter, 4,748 units changed hands in 118 transactions. In the first quarter, 5,604 units changed hands in 150 transactions. The numbers include all apartment buildings with at least four units, according to Belnick.
The year-to-date total, 15,971 units in 394 transactions, is between 42% and 37% behind the comparable 2005 period, depending on whether you're looking at units or transactions. The year-to-date sales price, meanwhile, is running 19% ahead of 2005 on a per-unit basis. That percentage is down from mid-year, however, when the year-to-date sales price was 29% ahead of the comparable 2005 period.
Looking at the bigger picture, Belnick tells GlobeSt.com the market's overall fundamentals remain some of the best in the nation for apartment owners, which is why 45% of the region's estimated 188,000 apartment units have changed hands since the start of 2004.
For the past 14 years, the region has been at or near the top nationally for job growth and population growth, he says. That trend is likely to continue for at least the next five years, he says, during which the region will see an estimated $50 billion of new construction, which means plenty of more jobs.
Add in the facts that 7% of the apartment inventory has been taken off the market since 2004 due to condo conversions and teardowns and there were only 2,000 apartment units built last year, and you have a market primed for high occupancy and higher rental rates, Belnick says.
"Most of the doom-and-gloom projections [about the Las Vegas market] come from people on the East Coast or the West Coast; they don't have a clue," he says. "We've got too much going on."
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