Rents for new apartment leases crept up 3 percent nationwide last year, according to Carrollton, Texas–based MPF Research.
The usual suspects, including San Francisco and New York, topped the list of rent growth leaders, leaving no room for surprises up top, says Greg Willett, MPF’s vice president of research and analysis.
“It’s the strong-fundamentals markets,” Willett says. “They’re all getting solid employment growth.”
San Francisco continues to lead the pack, followed by the other two Bay Area markets, San Jose and Oakland. “It’s a place that’s chronically undersupplied, a very tight market,” Willett adds.
Areas like Nashville, Tenn., and Denver came in just below the top trio, due to their strong local economies. Job growth and household creation trends in those secondary markets help to fill in the blanks where people moved on to purchase homes or moved into new units now hitting the market.
“Nashville is one where you do have some active construction and some deliveries going on,” Willett notes. “It remains healthy, but it bounces back and forth from quarter to quarter.”
Detroit and Orange County, Calif., fell just below the top 10, with prices rising between 3.7 percent and 4.1 percent. Virginia Beach/Norfolk, Va.; New Orleans; and Riverside/San Bernardino, Calif., fell toward the bottom of the pack, with growth of less than 1 percent. These areas are still struggling to bounce back from the recession, Willett says. And Las Vegas is still looking for a winning streak: The metro came in last, with a negative figure.
“The economy is struggling in Vegas, and they’re just so overstocked in total housing,” says Willett.