SANTA BARBARA, CALIF. — Apartment rents in the United States rose 6.5 percent year-over-year in July to a record $1,155, according to the July 2015 edition of Matrix Monthly, a report on U.S. multifamily market trends from real estate software developer Yardi.
Technology-fueled markets in the Western U.S. continued to spearhead rent growth, led by Portland (14.6 percent), Denver (13 percent) and San Francisco (9.8 percent). Growth is strong across the board in all 30 of the markets featured in the Matrix Monthly, with only five metros experiencing less than a 4 percent increase year-over-year and three below the national long-term average of 2.8 percent.
San Diego (fifth with 9.1 percent rent growth year-over-year), Orlando (seventh at 8.4 percent) and Tampa (eighth at 8.1 percent) jumped into the report’s top 10 in year-over-year growth, replacing Dallas, Phoenix and Jacksonville.
The report has tracked a strong correlation between rent growth and employment gains. Metros with job growth above the national average tend to be among the leaders in rent growth, even if supply growth is above-trend.
San Francisco (3.9 percent job growth year-over-year on a six-month moving average), Atlanta (4.1 percent), Inland Empire (4.1 percent), Denver (3.5 percent) and Seattle (3.4 percent) have been among the top performers in rent gains, despite having varying levels of supply growth.
Other metros such as Richmond (0.9 percent), Philadelphia (1.4 percent), Chicago (1.4 percent), Baltimore (1.6 percent) and Minneapolis-St. Paul (1.8 percent) have been consistently among the lowest performing metros in terms of rent growth, despite relatively low levels of multifamily supply in some markets, according to Matrix Monthly.
Matrix Monthly is a monthly survey of apartment owners in the 101 U.S. markets covered by the Yardi Matrix business unit (formerly Pierce-Eislen). Brokers, sponsors, banks and equity sources that underwrite multifamily investment transactions use the report as a business development tool. Click here for the full July report.
Yardi is based in Santa Barbara, Calif., and serves clients worldwide from offices in North America, Asia, Australia, Europe and the Middle East.
— Staff reports