While national rent growth was negative in February, hard-hit markets have shifted closer to positive rent recovery and growth and February may be the last month of national declines, according to Yardi Matrix’s February report.
“Many markets experienced strong year-over-year rent growth in February, while others have begun to recover following rent declines in the summer and fall. However, urban cores continue to see rent declines,” the report said.
Highlights of the report:
- Multifamily rents declined by 0.1 percent on a year-over-year basis in February. But while national rent growth was negative this month, year-over-year rents have steadily shifted closer to positive rent recovery since October. If this trend continues, February could be the last month with a national decline.
- Overall rents increased by $3.00 in February, to $1,399. This is the ninth consecutive month where overall rents have increased or remained flat, pointing to signs of recovery.
- Outside of the gateway and top 30 markets, there was a large pop in month-over-month rents in many secondary and tertiary markets. Out of 133 markets surveyed this month, 111 had positive month-over-month rent growth.
“A major factor in their ability to bounce back is the percentage of the workforce that remains remote once the pandemic subsides,” the report says.
“The trends that we have been discussing since the beginning of the pandemic continued into February. Lower-cost markets are outperforming, while expensive gateway markets that were the most locked down due to COVID-19 restrictions continue to struggle—although not at the rate we initially saw,” Yardi Matrix said.
Positive rents growth by end of 2021
“We are forecasting most markets to have positive rent growth by the end of 2021, except for select gateway markets that will take longer to recover,” the report says.
“Many young people that would typically occupy urban cores moved in with their parents when the pandemic began. We are starting to see this trend unwind, with young people moving out again.
“But a hindrance to the recovery in urban cores will be the percentage of the workforce that makes a permanent shift to remote work.”
Before the pandemic statistics showed about 10 percent of people worked from home.
“Once the pandemic is behind us, it is estimated that as much as 25 percent could do so permanently. This shift will undoubtedly have an impact on the recovery of urban cores,” Yardi Matrix said.
About Yardi Matrix:
Yardi Matrix researches and reports on multifamily, office and self-storage properties across the United States, serving the needs of a variety of industry professionals. Yardi Matrix Multifamily provides accurate data on 18+ million units, covering more than 90 percent of the U.S. population. Contact the company at (480) 663-1149.
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