November is the fourth month in which the national median rent for multifamily buildings has declined, falling 0.9% month over month to $1,340, according to Apartment List. Because of the low demand over the holidays, rent growth is probably going to keep going downhill for another month or two.
Growth from the previous year was -1.1%. Apartment List stated that the current situation “stands in stark contrast to the prevailing conditions of 2021 and 2022 when rent prices were surging and year-over-year growth peaked at 18% nationally.” However, the national median rent is still roughly $250 per month higher than it was just three years ago, even with this cooling off.
6.4% is the national vacancy rate, which is a little higher than it was before the pandemic. Given the number of apartment buildings that are continuously being constructed, it is unlikely that this will change anytime soon. On the other hand, local markets, not national ones, determine construction levels. As previously predicted by GlobeSt.com, there will be a great deal of fluctuation in the upcoming year, with certain metro areas experiencing severe gluts.
According to the business, rents decreased regionally in 89 of the 100 largest cities in the country in October, and prices are declining year over year in 68 of these 100 cities. “The California markets like Oakland, San Francisco, and Long Beach, where apartment demand remains sluggish, are concentrated in the sharpest rent declines over the past year.”
Rewinding to November of 2017, that drop was the second biggest Apartment List had ever experienced. They stated, The only other time November brought a greater decline was the previous year when rents dropped by 1.1 percent as the market entered the still-present period of sluggishness. In contrast, November declines averaged 0.5 percent from 2017 to 2020.
The Midwest and Northeastern markets are experiencing the fastest rent growth. Providence (4%), Milwaukee (4%), Louisville (4%), Chicago (3%), Oklahoma City (3%), Hartford (3%), Boston (3%), New York (3%), Washington, D.C. (2%), and Indianapolis (2%) have had the highest rent increases during the previous 12 months.
Austin(-6%), Portland, Ore.(-5%), San Francisco(-4%), Phoenix(-4%), Atlanta(-4%), Orlando(-4%), Raleigh(-4%), Jacksonville(-4%), San Antonio(-3%), and Salt Lake City(-3%) had the smallest rate of increase in rent.
The rate of vacancy has recovered to levels higher than before the outbreak. They stated, Changes in the balance between the number of vacant apartments available and the number of renters looking to move into them are largely responsible for the price fluctuations that have rocked the rental market over the past three years.
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