The economic crisis that followed pandemic shutdowns didn’t immediately cause higher vacancy rates or lower rents in apartment complexes around Reno and Sparks.
But a closely watched survey says problems may be just over the horizon.
Johnson-Perkins-Griffin Real Estate Appraisers & Consultants of Reno just reported that the vacancy rate in big apartment complexes across the region stood at 3.2% this spring. That’s slightly tighter than the 3.5% vacancy rate in late winter.
Average rents, meanwhile, stood at $1,369 this spring, up by $28 from last winter’s $1,341.
But a fair number of tenants appear to have trouble with their monthly bills as the unemployment rate in the Reno-Sparks area now stands at about 16% after topping 20% during April.
About 5% of tenants were behind on their rent this spring, the Johnson-Perkins survey found, although delinquencies ranged widely from one complex to another. Some complexes said nobody is behind on the rent; others reported delinquency rates as high as 20%.
Tenants who can’t pay the rent will begin facing eviction proceedings on Sept. 1 after the state government earlier placed a moratorium on evictions during the early days of the pandemic crisis. That’s likely to lead to more vacancies, put downward pressure on rents and encourage landlords to offer deals such as a month of free rent, said the experts at Johnson-Perkins.
More downward pressure on rents is likely to come as thousands of new apartments arrive on the market.
Johnson-Perkins says more than 4,000 apartment units currently are under construction in the area, and another 5,000 units were on the drawing board. Even though some of the units planned for construction may be delayed because of economic uncertainties, the real estate consulting firm says it still expects the arrival of new complexes will cause rents to fall at some point.
But for the moment, rents have been rising and vacancies have been falling nearly everywhere.
The only area of town that saw an increase in the vacancy rate this spring was southeast Reno, where hundreds of new units have been built and big complexes reported average vacancies of 5%. That’s nearly double the 2.8% vacancy rate at southeast Reno complexes last winter.
But the rising vacancies didn’t dampen rents in southeast Reno. They were up an average of $43 a month — among the biggest increases anywhere in town. Only west Reno, where rents increased by an average of $55 a month, showed a bigger jump.
Nearly every type of apartment saw an increase in average rent this spring. A big jump came among studio apartments, where last winter’s average rent of $873 jumped to $915 by late spring — an increase of nearly 5% in 90 days.
