RealPage reports that the Midwest area has a substantial lead in apartment growth performance thanks to new apartment supply volumes and rent reductions rather than price rises in several regions of the country.
In fact, year-over-year net inventory growth in 2023 increased by 1.4%, while effective asking rents in the Heartland increased by 3.1% in the year ending in August of that year. Although those figures fell short of the region’s 10-year average, they were far above the trend seen in other parts of the country where annual rent reductions are taking place.
There is yet another exception. In the East, events are also different from those in the majority of other parts of the country, where they are registering annual rent reductions. The year-over-year net inventory growth is up 1.2%, and the growth in the East is more mild than in the Midwest at 2.5%. Once more, it is due to an increase in completed apartment buildings.
However, in contrast to the Midwest and East Coast, where they are “swelling,” according to RealPage, but at a slower rate and affording operators what it also refers to as “some breathing room,” the other regions are discovering that new deliveries weigh down on pricing power.
However, taking a look at some of the other markets provides a more accurate national perspective. As of August 2023, the Carolinas’ effective asking rent change year over year was -0.5%, and its year over year net inventory growth was 3.6%. In the Mountains/Desert region, year-over-year net inventory growth was 3.2%, and the effective asking rent change was -2.1%. In Florida, the year-over-year growth in effective asking rent was 0.7%, and the year-over-year growth in net inventory was 3%. In the Southeast, year-over-year net inventory growth was 2.6%, and year-over-year effective asking rent change was -0.2%. In Texas, the year-over-year change in effective asking rent was -0.3%, and the year-over-year change in net inventory was 2.2%. Last but not least, on the West Coast, the year-over-year net change in asking rent was -0.8%.
