U.S. multifamily rent dropped by $1 to $1,420 in October 2018, the second straight month of decline, according to a survey of 127 markets by Yardi® Matrix Multifamily.
The 3.3% year-over-year multifamily rent growth for the month was unchanged from September.
The overall slowdown follows an anticipated seasonal trend. Two highlights from the Yardi Matrix report which says:
- “Nationally, rent growth is hitting its seasonal slowdown phase, but there is a wide discrepancy in metro performance.
- Rent gains have accelerated over the last three months in warm-weather markets that include Las Vegas, Phoenix and Atlanta, while Seattle, Boston and San Jose have cooled off.
- We expect that the full-year rent increase for 2018 will remain near the year-to-date figure of 3.3%, with occupancy rates stable at current high levels.”
Sizzling rent growth in the Southwest as gains accelerate in Phoenix and Las Vegas
Rent gains have accelerated recently in warm-weather markets such as Las Vegas, Phoenix and Atlanta.
“The strength of the national market is demonstrated by the fact that rent growth is less than 2% in only a handful of metros, and the lowest is Houston at 1.6%. No market is even remotely in trouble,” the report says. “The market’s groove will be hard to knock off course as long as employment and wage growth maintain their current path.”
Year-over-year rent growth leaders for October were Las Vegas, Phoenix, Orlando, Fla., and the Inland Empire and San Jose metros in California.
Phoenix and Las Vegas strong for job growth
Both Las Vegas and Phoenix have seen strong acceleration since the beginning of the year. Las Vegas leads U.S. metros with 7.4% year-over-year growth through October, up from 5.8% in January, while Phoenix rose to 7.0% in October from 4.0% in January.
Both markets benefit from their long-term population shifts and healthy job growth.
Affordability and the impacts of 2017 tax reform have positioned Las Vegas to benefit from the outmigration of people and businesses from California and other high-cost regions.
Phoenix is attractive due to its weather, while its economy increasingly attracting a diverse set of businesses.
Yardi® develops and supports industry-leading investment and property management software for all types and sizes of real estate companies. Established in 1984, Yardi is based in Santa Barbara, Calif., and serves clients worldwide. For more information, visit www.yardi.com.