While it may be challenging for the apartment market to repeat astronomical rent growth from 2021, the outlook remains strong for the next 15 months and beyond.
Top stories and aggregated facts on Multifamily Real Estate, curated for Investors and Business Partners.
The apartment market posted torrid growth in 2021, according to a number of industry sources. Apartment List says prices increased more than 11% in the first half of 2021. That growth is double the size of inflation and triple the typical rent growth usually measured...
Asking rents in Los Angeles have increased 7.0% year-over-year as of August, the metro’s highest rate of growth since May 2016, according to Yardi Matrix. That makes the metro part of a national wave that has produced average asking rent growth of 10.3%, which is the highest rate of increase for the U.S. since Yardi began collecting data in the 1908s.
Despite facing roadblocks from the pandemic, materials shortages and a tight labor market, apartment starts were on the rise this summer and completions are expected to hit 334,000 units, according to Yardi Matrix estimates.
Apartment transaction volume has recovered from its COVID-19 slump. In the second quarter, apartment transactions hit $52.7 billion—a record high, according to Real Capital Analytics (RCA). That was 40% more than the $37.6 billion it averaged across second quarters from 2015 to 2019.
In 2020, as the pandemic gripped the nation, people left major cities searching for more space and affordability. That pushed home price appreciation to mid-2000 levels in many areas of the country.
Now, approaching a year-and-a-half since the pandemic hit, price appreciation is migrating to a new place—the rental market.
As the country re-opens from the pandemic, and eviction moratoriums begin to wind down, multifamily fundamentals are red hot. Demand and rent growth are at levels not seen in decades, with the strong performance concentrated in institutionally owned properties.
While New York and Los Angeles might have experienced population loss in 2020 at the height of the pandemic, the apartment market is starting to rebound in the two key gateway markets.
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