![]() ,, ,, Westside Rentals,, , and form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties. LoopNet is the most heavily trafficked commercial real estate marketplace online. Ten-X provides a leading platform for conducting commercial real estate online auctions and negotiated bids. STR provides premium data benchmarking, analytics, and marketplace insights for the global hospitality industry. Our suite of online services enables clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. (NASDAQ: CSGP), a leading provider of online real estate marketplaces, information, and analytics in the property markets. The next 90 days, which represent the critical spring leasing period, will set the tone for how multifamily will perform the rest of the year.ĬoStar Group, Inc. However, the downside risks dominate, including potential weakening in the labor market and tighter financial conditions. If absorption can match deliveries by the end of the second quarter, the multifamily market might see some stabilization. KEY CONSIDERATIONS AHEAD OF SPRING LEASING PERIOD Just a year prior, rent increases were strongest in Sun Belt metros. Indianapolis held the top spot for year-over-year rent growth, at 6.6%, alongside other Midwest markets like Cincinnati, St. INDIANAPOLIS, MIDWEST MARKETS POST HIGHEST RENT GROWTH Miami saw the biggest slowdown, with year-over-year rent growth dropping by 300 basis points to 3.8%, a stark reversal from just a year before, when Miami’s rent growth stood at 18%.īaltimore and Boston were the only two markets where rent growth did not decline in the first quarter. In the first quarter, 38 out of 40 markets experienced moderation in year-over-year rent growth. MIAMI EXPERIENCES SIGNIFICANT SLOWDOWN IN RENT GROWTH Vacancies at three-star properties have risen the most over the past six quarters, up 230 basis points to 6.4%, although three-star properties are still leading overall rent growth, with a 3.1% year-over-year gain. At the end of the first quarter, four- and five-star properties had the highest vacancy rate, at 8.7%, and the lowest rent growth, at 1.5%.Įconomic uncertainty will continue to pose risks for three-star, typically garden-style multifamily properties, with household formations down and some existing renter households being squeezed by high inflation and past rent increases. This will likely be most pronounced in four- and five-star properties, which are typically luxury mid- to high-rises with resort-style amenities, where many new developments are occurring. As supply is likely to outpace demand, there will be upward pressure on vacancy rates and downward pressure on rents. With just more than 1 million units under construction, the national multifamily market is expected to see the largest number of new units delivered since 531,000 units were delivered in the mid-1980s. SUPPLY ADDITIONS LIKELY TO OUTSTRIP DEMAND Additionally, although the supply-demand imbalance continued to put downward pressure on national year-over-year asking rent growth, it remained positive, declining by only 130 basis points to 2.5% since the end of 2022. While 104,000 units were newly delivered, the vacancy rate increased only 30 basis points to 6.7%, the smallest increase since the second quarter of 2022. Absorption turned positive, at 43,000 units nationwide. ![]() However, the record supply still under construction and the economic uncertainty continue to weigh on the multifamily market.”ĭespite continued weakness, the multifamily sector saw some improvements in the first quarter of 2023. Despite these headwinds, the deterioration of multifamily fundamentals appears to be slowing. ![]() “Economic uncertainty has suppressed household formations, and consumer confidence sits at low levels due to high inflation, Fed interest rate hikes and recession fears. “While we kicked off 2023 with positive monthly rent growth in January and February, we’ve still witnessed signs of weakness across the multifamily sector,” said Jay Lybik, National Director of Multifamily Analytics at CoStar Group. The negative trends in the multifamily market persisted at the start of the year. WASHINGTON-( BUSINESS WIRE)-Today, - a CoStar Group company - published an in-depth report of multifamily rent trends for the first quarter of 2023.
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