The national average multifamily rent rose by $2 to $1,460 in July, ending four months of consecutive declines following the start of the COVID-19 pandemic and recession. Year-over-year rent growth remains negative at -0.3%, unchanged from June.
Over the top 30 major markets in Yardi Matrix’s database, year-over-year rent growth was negative in 17 markets, led by San Jose at -5% rent growth and San Francisco with -4.1%. (For comparison, rents in San Jose rose 2% YOY in July 2019 and 2.8% YOY in San Francisco.)
Two markets considered volatile—Las Vegas and Phoenix—have held up well with 1.2% and 3.2% growth, respectively. According to Yardi, Vegas’ position is likely bolstered by its continuing position as an alternative to West Coast markets.
Rents in market-rate “Renter by Necessity” properties rose by 1.2% nationwide, with negative growth in only five markets. At the same time, luxury “Lifestyle” property rents fell by 1.7%, with positive growth in only eight markets.
On a month-over-month basis, rents rose by 10 basis points in July, marking the first month of positive month-over-month rent growth since February. Month-over-month rent growth was negative in 13 out of the top 30 markets in July, an improvement from 19 out of 30 markets in June. (Overall, 25 of the top 30 markets performed better in July than they had in June.) Las Vegas posted the strongest month-over-month rent gains at 0.9%, while San Jose and Boston had the steepest declines.
Overall, the recent rise in COVID-19 cases has significantly slowed the economic recovery in progress. A total of 50 million jobless claims have been filed since mid-March, with roughly 1 million new jobless claims each week.
The expanded unemployment benefits laid out in the first stimulus package expired at the end of July, and Democrats and Republicans have yet to compromise on a new stimulus package. Yardi expects that a new stimulus payment for all Americans will be an “almost certain” component, and some form of extra unemployment insurance is also likely, though it is unknown whether the payments will remain the same.
According to the National Multifamily Housing Council’s Rent Payment Tracker, 93.3% of apartment households made a full or partial rent payment by July 27. Provided a new stimulus payment is approved, August collections are expected to remain strong.
About Real Estate Intelligent Marketing (REIM):
REI Marketing is an innovative Real Estate Marketing Company that offers distinctive real estate services to developers and multifamily investors. We are a vibrant, dedicated team of industry professionals with international experience in marketing and multifamily investment.
