The multifamily rental market is starting to reflect the introduction of fall, cooling off but still growing. According to the Yardi Matrix Monthly report, which is a monthly measurement of 120 U.S. markets, August marked the eighth consecutive month of record rent prices.
Annually, national rent prices were up 5 percent but slipped 50 basis points from the previous month.
Sacramento was on one end of the spectrum, while Houston was on the other. Sacramento rent prices increased 11.9 percent annually, while Houston rent prices hardly moved from where they were in August 2015.
Orange County and Las Vegas were closest to the national average of 5 percent year-over-year rent growth.
When looking at the trailing annual year-over-year price changes, which is an average calculation of rent changes over a year, the national trailing 12-month change was 6 percent. Portland had the biggest jump, at 12.5 percent.
In the 12-month trailing, Houston ranked in the last spot once again for the lifestyle asset class. However, the metro saw gains just below 6 percent for the renter-by necessity asset class, suggesting the slowdown in the rental market here could be fueled by a slowdown in higher end rental properties.
Rental market and economic conditions
Yardi experts report the forecasted rent growth for 2016 at 4.5 percent, and year-to-date stats are proving to be pretty strong. Job and income growth is certainly having a hand in the process, which is between about 2 percent and 3 percent, the report shows.
Naturally, regions seeing the quickest pull-back in rent growth are those that are seeing the slowest job growth, according to the report. Some areas that have seen extreme growth in recent years may start to pull back and moderate, like Portland, Austin and San Francisco.
Miami
Rent growth is holding on pretty strong in Miami, Yardi says, ranking just above the national average for the trailing 12-month year-over-year increase for all asset classes.
Forecasted rent growth by the end of 2016 in Miami is 5.6 percent, ranking fairly high on Yardi’s list. Job growth is also holding on in the South Florida city, where as of June 2016, the year-over-year growth, based on a six-month moving average, was 2.7 percent.
The metro is seeing a fair amount of its inventory coming from new completions, which made up about 2.8 percent of the total stock of homes as of August 2016.
The rate of occupancy remained the same month-over-month in July 2016, at 95.7 percent. While that is lower than a lot of other big markets, the metro’s rental market health and new inventory rate are strong, according to Yardi.
