“US apartment rent trends are seeing strong Northside pace“– Paul Ebeling
The Apartment List national rent index increased by .7% month-over-month in February, the largest monthly increase since June 2019.
The increase represents the 2nd month running of rent growth, a Key reversal in the downward pattern in rates brought on by the VirusCasedemic.
Considering historic rent growth trends, this month-over-month increase represents a substantial jump. As for the past three years, February rent growth was .3% month-over-month.
The report from Apartment List notes that the Y 2021 increase is more than 2X’s February 2020. In January, rent growth also outpaced the prior year’s average.
But, overall, the national rent index is still down .8% year-over-year, and rents have yet to recover to the post-Instant Recession highs in August 2020 following a low in December.
The gainers in January and February have helped to offset some of those losses.
Rents are now down just 0.1% from June rent marks, and rent losses are recovering. Last month, rents had a year-over-year decline of 1.2%, and this month the number has improved to .8%.
Apartment List notes that rent trends are very market specific through the medical emergency chaos. Rents in some markets are hitting a bottom or recovering, while booming markets are continuing to see rent growth.
Multifamily has shined in the Sunbelt region.
A recent report from Yardi found that high-cost metros like New York and San Francisco struggled during the chaos, seeing substantial rent declines, smaller metros actually saw either positive or flat rent growth.
Tampa, Florida led the Top 30 markets on a month-over-month basis in December with 0.9% in rent growth, while the California’s Inland Empire, Phoenix and Orange County, California followed behind with 0.5% rent growth.
Some investors are forming investment strategies to respond to the trend.
Last month, Rastegar Property Co. launched a $200-M private investment trust to invest in vintage multifamily assets throughout the Sunbelt. The firm plans to renovate, reposition, re-lease, and/or develop vintage assets throughout the region, which includes 18 states. This region has quickly become a favorite among investors during the chaos because to strong inward migration supported by work-from-home policies.
Have a healthy day, Keep the Faith!