Apartment vacancy has increased for the first time since April 2020, signaling that tightness in the market may be easing. Apartment List’s national rent index increased by 2.1% from August to September, but while month-over-month growth has slowed, the national median rent has increased by 16.4% since the beginning of this year.
Boise, which led national rent increases since the onset of the pandemic, finally saw a decline in rents over the same period. Rents in the Idaho city are up 39% over March 2020, but the median rent fell by 0.1% this month.
“While such a small dip certainly doesn’t offer much relief to Boise renters, it may at least signal that the market is finally starting to stabilize,” ApartmentList analysts write in a report breaking down the September data.
Another notable decline: Spokane, which has also posted “skyrocketing” rent growth this year, saw rents decline 1.8%.
While “pandemic pricing” is over in most of the country, five cities still remain below pre-pandemic levels:, San Francisco, Oakland, San Jose, Minneapolis, and Washington, DC. Of those, Oakland and San Francisco are still posting double-digit price reductions, but “the remainder should be back to pre-pandemic prices before too long,” the report predicts.
A report earlier this spring from YardiMatrix predicted that it will take five years for multifamily occupancy to hit Q1 2020 levels in gateway cities such as New York, San Francisco (and San Jose), Los Angeles and Chicago, and in secondary metros such as Orlando, Miami and the Twin Cities.
Nationally, vacancy increased slightly from August to September from 3.8% to 3.9%. For the last few months, the vacancy rate has hovered in that range, much lower than the pre-pandemic norm of 6%.
“Although this is a very minor increase, it represents the first increase of any magnitude since last April,” the report states. “We’ll need to see more data to confirm if this trend will continue, but if vacancies are back on the rise again, it would signal that tightness in the rental market is finally beginning to ease. If our vacancy rate continues to increase in the coming months, it’s likely that rent growth will also continue to cool.”
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