Rents Unchanged In December But Still Up 2.5% Year-Over-Year

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Rents Unchanged In December But Still Up 2.5% Year-Over-Year

The average multifamily rent in the U.S. stood at $1,359 in December, unchanged from November but a 2.5% year-over-year increase for rents, according to a survey of 121 markets by Yardi Matrix.

Strong demand, the economy’s solid footing and a robust job market offer encouraging signs that growth will continue in 2018.

Rents were down 0.3% in the fourth quarter, which is only the second negative quarter of growth nationally since the second quarter of 2010 (rents also fell 0.2% in the fourth quarter of 2016).

“Although the results are somewhat negative compared to recent history, what’s notable is how consistently strong the market has performed during the entire recovery,” Yardi Matrix writes in the report.

Outlook for 2018 rents still good especially secondary markets

The question for 2018 is how much more steam is left in the market, whether the deceleration will continue or if it will level off or turn negative, the report says

“Our view is that growth will continue at roughly the same rate nationally, led by strong demand. The economy shows no signs of slowing down, as GDP comes off two strong quarters and should get at least a boost from lower corporate and personal tax rates, while job growth continues to impress.

“Combined with the growth of the young adult population, household formation should remain robust. The consistent national numbers mask a great deal of movement on the metro and submarket level.

Rents Unchanged In December But Still Up 2.5% Year-Over-Year

Secondary markets such as Sacramento, Orlando, Las Vegas, Salt Lake City and Colorado Springs with affordable rents and growing populations should see above-trend increases.

 Business-friendly markets such as Dallas and Atlanta should see a slowdown in rent increases, but see moderate gains nonetheless, while expensive coastal markets such as New York City and markets with excessive supply growth are likely to see little or no gains.

West Coast markets saw weak fourth quarter

West Coast markets, specifically those in the Pacific Northwest, were the weakest on a T-3 basis.

 Seattle (-0.8%), Portland (-0.5%) and San Jose (-0.5%) saw rents decline due to a combination of oversupply and historically expensive rent levels

See other Yardi Matrix reports here.

About Yardi Matrix:

Yardi Matrix, formerly known as Pierce-Eislen, Inc.®, was founded in March, 2000, and acquired in July 2013 by Yardi Systems, Inc., a Santa Barbara, California software company focused on commercial real estate industry applications.The Yardi Matrix apartment information service is a high-performance system with the sole function of supporting the commercial apartment industry’s dominant participants. The company's services monitor the 50+ unit apartment universe from the property level to the submarket/market level in a form unique within the commercial apartment information industry.

Rents up 2.5% year over year

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