Based on its analysis of occupancy rate growth nationwide over the course of one year—from the second quarter of 2019 to the second quarter of 2020, well into the COVID-19 pandemic—single-family rental management firm Mynd Management has found and ranked the 20 healthiest rental housing markets in the U.S., starting with Richmond, Virginia, at No. 1.
The U.S. vacancy rate fell by 1.1% from Q2 2019 to Q2 2020, down to 5.7%. Over this same period, the vacancy rate in Richmond fell by 10.9%, from 13.6% in Q2 2019 to 2.7% in Q2 2020.
Louisville, Kentucky, came in second, with a 9% YOY drop in vacancies down to 4.3% in Q2 2020, while Fresno, California, came in third, with a 6.8% YOY decline in its vacancy rate, down to 0.7% in Q2 2020. Mynd attributes Fresno’s steep drop to the city’s eviction ban, as well as suburban flight to Fresno from the Bay Area.
“This is an unprecedented trend: The top two metros in our study are located in Appalachia, a region that traditionally flies under the radar for many real estate investors,” says Doug Brien, CEO and co-founder of Mynd Management. “However, the health of this area isn’t surprising given the state of rental housing. In spite of the coronavirus pandemic, rental demand remains healthy and the national vacancy rate declined 1.1% year-over-year to 5.7% in the second quarter.”
Other high-ranking cities include Columbia, South Carolina; Raleigh, North Carolina; Greensboro, North Carolina; and Knoxville, Tennessee. Metros with traditionally low vacancies and limited supply, including San Francisco and New York, tended to rank in the middle of this study. San Francisco ranked 34th, with a 1.7% YOY decline to a 3% vacancy rate, while New York ranked 38th with a 1.3% YOY decline to a 3.3% vacancy rate.
“While some of these low vacancy rates can be attributed to metro areas with eviction moratoriums in place, we remain bullish on the rental housing sector,” Brien says. “According to Mynd’s Rental Housing Tracker, rents increased 7.2% as of mid-September across our portfolio of properties in 19 U.S. metro areas. Strong supply-and-demand fundamentals, low mortgage rates, and ongoing stock market fluctuation make now an opportune time to invest in residential real estate.”
