National Multifamily Report – January 2021

Still on a downward trend, year-over-year rent growth showed some positive signs, according to a Yardi Matrix survey of 130 markets.

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.

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