Marcus & Millichap

Reno-Sparks Multifamily Market Report

Third Quarter 2018

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Inbound Migration, Rapid Economic Growth Power Reno-Sparks

Expanding employer base, affordability underpin demand for rentals. Fueled by the emergence of startups and the growth of Tesla’s gigafactory, job growth in the Reno-Sparks metro remains robust, exceeding 3.5 percent over the past year. The emergence of high-skill manufacturing startups has raised the income profile of the metro, boosting demand for a number of services, as well as apartments along the major transportation corridors. As a result, university programs are expanding to provide the skilled labor needed to fill the new positions, generating inbound migration and underpinning a secular rise in housing-related demand. Builders have responded to extremely low vacancy rates, which reside below 3 percent metrowide, to push completions to the highest level in over a decade. Robust net absorption, however, has produced a steep advancement in average effective rents, which have grown by 30 percent over the past five years. These conditions will remain in place through the remainder of 2018, providing rent growth in the high-single-digit range.

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