Multifamily rents once again declined for the month of November, marking the third monthly decrease in a row. Rents dropped $2 to $1,419, down $3 from its peak of $1,422 in September. Year-over-year growth has lessened by 10 basis points to 3.1 percent, according to a survey of 127 markets by Yardi Matrix.
Although there is a continued decrease into the fourth quarter, this is typical for the market during this part of the year. Demand still is strong, with household formation running at 1.5 million per year, helping to fill the 300,000 units of new supply. Occupancy remains stable at 95 percent or higher over the last two years.
Las Vegas is once again the highest performing metro within the top 30, with rents increasing 7.3 percent. This is largely due to the 3.9 percent employment growth year-over-year, as well as the amount of 12-month completions representing only 1.9 percent of the total in November. According to the survey, the city will likely remain under-supplied due to the number of units under construction and planned representing only a 4 percent increase.
Rent growth continues to be strongest in warm weather states, with five of the top 10 performing metros being located in California: Inland Empire (5.4%), San Jose (5%), Los Angeles (4.2%), San Francisco and San Diego (both 4%). Although these are the top for rent growth, the cities are all at the bottom in terms of deliveries. The biggest issue for California is the supply, in which the state is constantly in need of new stock to house the influx of people moving there.
Rounding out the top 10 were Phoenix with a 6.6 percent increase, Atlanta with a rise of 5.4 percent, Orlando growing 5.2 percent and Tampa at 3.9 percent.
To read the full report, visit the Yardi Matrix website.