Heading into the winter months, multifamily rents are showing their typical seasonal mild growth, according to Yardi’s Matrix Monthly, which surveys 111 markets across the nation.
In November, national rents dropped just $1 to $1,165, after rents had previously grown for nine consecutive months. However, rents increased by 6.4% year over year, 190 basis points above the 4.5% rent growth in November 2014.
Markets in the West are still dominating the top 10 markets with the greatest year-over-year rent growth, with Portland, Ore., and San Francisco at the top of the list with 14.7% and 11%, respectively. Seattle, Atlanta, and Denver all remained in the top 10.
However, with increased supply in the Class A market, 18 of the top 30 metros surveyed experienced negative growth in Lifestyle rents on a trailing three-month basis, compared with a 0.1% growth for markets overall. Markets such as Jacksonville, Fla., Chicago, and Baltimore saw decreases above 1%. The Rent by Necessity market still experienced a 0.2% increase, proving the Class A market might be reaching a ceiling of affordability and causing landlords to start offering concessions.
According to Yardi, the slight decline simply could be the common seasonal effects as opposed to long-term trends since the top six metros were in warmer weather climates, including Miami and Phoenix. Jacksonville appears to be an outlier due to the high increase of top-end products.
Some of those markets holding firm at the top are also experiencing strong job growth, particularly with high-end wages. San Francisco saw a 3.8% year-over-year job growth in November, Portland and Dallas experienced 3.4% job growth, and Atlanta saw 3.1% job growth. Yardi suggests this strong job growth helps to explain why markets like Seattle with heavy supply coming online can still maintain a steady rent growth.