Since the pandemic began, apartment rents have been growing across the country at a staggering rate. According to The Business Journal and RealPage, the top 30 metros have seen rents grow by 10% since Q1 2020. Some markets experienced more explosive growth, jumping by more than 20% during this time. Even markets like Detroit and St. Louis grew 12.9% and 11.3%, respectively.
It’s unlikely that this level of growth is sustainable, so it’s still important to focus on the fundamentals driving each market. This includes population and job growth, along with new apartment developments. The markets that had these factors in their favor outperformed the 10% average.
On the other side, high-priced, coastal markets are still recovering and have not reached their pre-pandemic rents. New York-White Plains has seen rents drop by 1.5% since Q1 2020. San Jose-Sunnyvale-Santa Clara, CA has lost 6.6% in rents, while San Francisco-Redwood City has seen rents drop by 12.4%.
The good news is these markets are beginning to recover. However, some residents have no plans to return to high-priced markets. Forward-thinking employers are offering remote work, giving employees the option to live anywhere. And this location flexibility gives businesses more negotiating power with local municipalities. Recently, Tesla announced that it was leaving California for Texas as a result of its policy concerns. It’s worth noting how other companies respond and the impact it has on demand and rent growth going forward.
For now, check out seven U.S. metros with the fastest-growing rents. And be sure to view the full list from The Business Journal.
Rental Rate Change Since Q1 2020: 19.8%
Rental Rate Change Since Q1 2020: 19.8%
Rental Rate Change Since Q1 2020: 22.5%
Rental Rate Change Since Q1 2020: 22.6%
Rental Rate Change Since Q1 2020: 23%
Rental Rate Change Since Q1 2020: 23.7%
Rental Rate Change Since Q1 2020: 26.2%
About the Author:
John Casmon has helped families invest passively in over $90 million worth of apartments. He is also the host of the #1 rated multifamily podcast, Target Market Insights: Multifamily + Marketing. Prior to multifamily, John was a marketing executive overseeing campaigns for Buick, Nike, Coors Light, and Mtn Dew: casmoncapital.com
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.