Apartment Rents Have Another 24 Months of High Growth

Posted on November 24, 2021

Couple relaxes on couch during move-inMultifamily investors are bullish on long-term rent growth for the next 18 to 24 months, according to experts at the GlobeSt.com Multifamily conference.

Companies are exclaiming that they have “never seen anything like this,” in regard to the rent growth of the past 12 months. Some have seen high double-digit rent growth (in the 15 percent to 20 percent range), and even higher in some markets.

Phoenix has been one of the top performers, experiencing growth rates as high as 26 percent.

The investment professionals are bullish on continued rent growth, but Jeff Adler, VP of Yardi Matrix, told GlobeSt panel that the growth won’t continue at this pace, calling it unsustainable.

He expects another 18 to 24 months of high growth, noting that it won’t be in the 20 percent range, but it will be substantial. Adler also noted that inflation has not yet worked into rents yet, which could help to boost growth. “It’s a great time to be in multifamily,” said Adler during the October panel.

While rents are growing rapidly, expenses are rising. There have been increased maintenance costs, tax rates and regulatory challenges that are putting pressure on operations expenses.

Some say that the higher expense costs aren’t really part of the equation, and instead that rent growth is the bigger factor and increasing rents is the focus for owners; it is driving deals and making things pencil. Said one, “Revenue is growing so fast and high today that increasing expenses don’t mean much.”

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