The national average multifamily rent fell by 0.5% year over year in November, driven by ongoing declines in gateway markets as the pandemic continues. Out of 135 markets in Yardi’s data service, Scranton-Wilkes-Barre, Pennsylvania, topped the rent growth list at 9.7% YOY, likely benefiting from an exodus from markets like New York City and Washington, D.C.
While the Pfizer-BioNTech vaccine “bodes well” for U.S. gateway markets, Yardi says, it will not necessarily bring back residents who have already left city centers. Many have already adjusted to new lives in the suburbs or other metropolitan areas and will need “major incentives” to return.
California's Inland Empire (6.6%) and Sacramento (5.9%) are the strongest markets for rent growth year over year, while San Jose (-11%) and San Francisco (-8.6%) are the weakest. Midwestern markets have shown the most consistent rent growth over the course of the pandemic, including Indianapolis (3.9%); Kansas City, Missouri (2.4%); South Bend, Indiana (3.9%); Detroit (4.3%); Toledo, Ohio (3.2%); Columbus, Ohio (3.1%); and Dayton, Ohio (2.8%). Of all Midwestern markets in Yardi’s top 30, only two experienced negative YOY rent growth: Chicago (-3.4%) and the Twin Cities (-0.5%).
The four largest Texas markets have struggled, particularly Austin (-4.1%) and Houston (-1.4%). While Austin is a strong tech market, the city has lost about 22% of its leisure and hospitality jobs on a year-over-year basis.
On a month-over-month basis, short-term rent growth fell flat in November. Sacramento and Tampa, Florida, led the major metro markets with 0.9% growth. Many of the top-performing markets are in warmer climates, though Indianapolis and Baltimore are also performing well at 0.7%.
San Jose and Seattle fell to the bottom at -1%, with the sharpest rent declines in their urban cores. Most gateway markets have declined, with the exception of Miami at 0.8%—the first time month-over-month rents have been positive in the metro since February. Austin, which usually sees boosted rent growth in the winter, has fallen -0.8% amid job losses and supply gains.
