National Year-Over-Year Multifamily Rent Growth at 8.4%, Down from 9.4% in June
WASHINGTON–(BUSINESS WIRE)–Today, Apartments.com – a CoStar Group company – released an in-depth report of multifamily rent growth trends for July 2022 backed by analyst observations.
“Throughout the month of July, while multifamily yearly rents continued to perform well above historical averages, the deceleration of rent growth quickened at a time when markets typically post their best results,” said Jay Lybik, National Director of Multifamily Analytics, CoStar Group. “The deteriorating rent situation highlights a significant collapse of demand in the sector when new unit deliveries are projected to hit 230,000 in the second half of 2022.”
SUNBELT MARKETS REMAIN IN TOP 10, START SEEING DRAMATIC PULLBACK
According to Apartments.com, Sunbelt cities dominated the top 10 rent growth markets in July with eight out of 10 located within the region. Florida continued boasting seemingly strong demand with four of the five top markets located in the state, including Orlando, Fla.; Miami, Fla.; Fort Lauderdale, Fla.; and Palm Beach, Fla.
However, the markets with the fastest growing rent in 2021 are now experiencing the quickest pullback. For example, Palm Beach has seen a dramatic slowing of growth with year over year asking rents decreasing from 30.6% in Q4 2021 to 12.7% at the end of July 2022. Tampa and Las Vegas have also seen rents retreat by over double digits so far this year.
BAY AREA MARKETS BUCK DOWNWARD TREND
On the flip side, the San Francisco and East Bay markets challenged the downward rent growth trend. San Francisco’s average asking rents are now just $18 below their all time peak of $3,116 in Q2 2019 as rents rose 40 basis points over the past 30 days to 5.0%. The East Bay also held strong at 5.5% throughout the month of July.
MONTH OVER MONTH DATA PAINTS A DETERIORATING RENTAL MARKET PICTURE
Analysts have found that, looking sequentially, 12 markets saw absolute asking rents decline over the past month, the first occurrence since 2020. Miami led the charge with average asking rents down $11 during July, in addition to five markets that reported no change in rents over the last 30 days.
The stark reversal for Sunbelt markets can be seen vividly in the month over month chart. Markets that saw negative or flat rent growth in July are dominated by Sunbelt locations, including Fort Lauderdale, Austin, Orlando, Charlotte and Tampa, amongst others.
With the spring/summer leasing season appearing to be significantly lacking demand, the risk of rents falling below CoStar’s current year end forecast of 6.3% is growing. Over the next few months, analysts will be watching the state of the multifamily market and keeping a close eye on Sunbelt markets that are taking a turn.
About CoStar Group, Inc.
CoStar Group, Inc. (NASDAQ: CSGP), a leading provider of online real estate marketplaces, information and analytics in the property markets. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our suite of online services enables clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. STR provides premium data benchmarking, analytics and marketplace insights for the global hospitality industry. Ten-X provides a leading platform for conducting commercial real estate online auctions and negotiated bids. LoopNet is the most heavily trafficked commercial real estate marketplace online. Apartments.com, ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, Westside Rentals, AFTER55.com, CorporateHousing.com, ForRentUniversity.com and Apartamentos.com form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties. Homesnap is an industry-leading online and mobile software platform that provides user-friendly applications to optimize residential real estate agent workflow and reinforce the agent-client relationship. Homes.com offers real estate professionals advertising and marketing services for residential properties. Realla is the UK’s most comprehensive commercial property digital marketplace. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. CoStar Group’s websites attract tens of millions of unique monthly visitors. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada and Asia. From time to time we plan to utilize our corporate website, CoStarGroup.com, as a channel of distribution for material company information.
Apartments.com is the leading online apartment listing website, offering renters access to information on more than 1,000,000 available units for rent. Powered by CoStar, the Apartments.com network of sites includes Apartments.com, ApartmentFinder.com, ApartmentHomeLiving.com, Apartamentos.com, WestsideRentals.com, ForRent.com, ForRentUniversity.com, After55.com and CorporateHousing.com.
Apartments.com is supported by the industry’s largest professional research team, which has visited and photographed over 500,000 properties nationwide. The team makes over one million calls each month to apartment owners and property managers, collecting and verifying current availabilities, rental rates, pet policies, fees, leasing incentives, concessions, and more. Apartments.com offers more rental listings than any other apartments website, and innovative features including a drawing tool that allows users to define their own search areas on a map, and a “Travel Time” feature that lets users search for rentals in proximity to a specific address. Apartments.com creates easy access to its listings through a responsive website and iOS and Android apps, and provides unmatched exposure for its advertisers through an intuitive name, strategic search engine placements and innovative emerging media.
The Apartments.com network reaches millions of renters nationwide, driving both qualified traffic and highly engaged renters to leasing offices.
This news release includes “forward-looking statements” including, without limitation, statements regarding CoStar’s expectations, beliefs, intentions, or strategies regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that the number of new units expected to be delivered by year end is not as expected; and the risk that rental rates are not as forecasted. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar’s filings from time to time with the Securities and Exchange Commission, including in CoStar’s Annual Report on Form 10-K for the year ended December 31, 2021 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar’s other filings with the SEC available at the SEC’s website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.