The decline of multifamily rents showed signs of softening, according to Yardi Matrix’s monthly report of 130 markets. Rents dropped 0.2 percent in January on a year-over-year basis, while on a month-over-month basis, the average rent marked a 20 basis-point rise, or an increase of $3 to $1,392. Although the average national rent is improving, of the top 30 markets, 16 posted declines.
In some gateway markets, rents continued their descent, including New York (down 12.2 percent year-over-year), San Francisco (-9.8 percent), Boston (-3.8 percent) and Los Angeles (-3.0 percent); other gateway markets show signs of bottoming out, posting increases in the month-over-month rents, such as San Jose, where rents improved 0.9 percent, but were down 13.0 percent year-over-year. The best performers continued to be the Inland Empire (up 7.4 percent year-over-year), Sacramento (up 6.3 percent) and Indianapolis (up 4.5 percent), due to their location near dense and high-cost markets.
Rents in the Lifestyle segment rose by 0.1 percent on a month-over-month basis in January, marking the first positive movement in the segment since February 2020. Meanwhile, Renter-by-Necessity rents continued rising, up by 0.3 percent.
Job loss or growth has not been directly proportional with declines or gains in rents and occupancy across metros, instead, a correlation to migration trends and living costs has emerged. Markets with the highest percentage of jobs in “at-risk employment sectors”—which included Las Vegas and some of the Florida markets—withstood the pandemic’s impacts aided by robust in-migration from higher-cost states like California and New York. Metros with the smallest percentage of jobs in at-risk employment sectors, like New York and Northern New Jersey, marked steep rent declines.
To read the full report, visit the Yardi Matrix website.