Renters may finally be getting some relief. Apartment rents are not increasing as much as they have in the last few years.
None of the major metro areas studied had seen annual rent growth of more than 10 percent. Rents rose 2.2 percent, on average, in the U.S. over the 12 months that ended in the third quarter, according to Yardi Matrix. That marks the slowest rate of increase in rental prices since April 2011.
“We don’t believe it’s time to turn out the lights on the expansion in the multifamily sector,” Yardi notes. “Job growth and social and demographic trends foretell strong demand for the next few years.”
The markets where rents increased the most quickly in 2016 have slowed down by the most in 2017, according to data from Axiometrics. Sacramento still has the strongest rent growth in the U.S., but apartment rents grew by 6.9 percent over the 12 months that ended in the third quarter of 2017. For comparison, a year ago rents rose by nearly 12 percent in that time frame.
Many of the markets that saw home prices plunge by the most during the housing crash are seeing some of the highest rent upticks still.
“Because of the oversupply of housing, some of the hottest markets in the last real estate cycle took the longest to recover,” says Jay Denton, senior vice president of Axiometrics.
Another former housing crash city—Las Vegas—saw the second fastest growth in apartment rents, in which rents increased by 5.8 percent over the 12 months that ended in the third quarter of 2017.
“Las Vegas had a longer, deeper downturn than the rest of the real estate market,” says Denton. “It is just a different place in its real estate cycle. Other markets have had a lot of construction.”
Other markets that saw rents grow quickly that were also considered former “crash cities,” included Orlando, Fla., which was number three on the list with average apartment growth at 4.8 percent; San Diego at number five with rent growth of 4.5 percent; and Jacksonville, Fla., at number six with a 4.4 percent rent growth.
Source: “Apartments Rents Are Growing the Most in Former Housing Crash Cities,” National Real Estate Investor (Oct. 10, 2017)
