Apartments.com, an apartment listing website owned by CoStar Group, today released an analysis for multifamily rent growth trends for July 2022, according to a press release.
The report national year-over-year multifamily rent growth has fallen to 8.4% from 9.4% in June, with Sun Belt cities marking eight of the the top 10 rent growth markets. Florida made up four of the five top markets, with top growth cities including include Orlando (16.2%), Miami (14.6%), Fort Lauderdale (13.6%) and Palm Beach (12.7%).
On the other hand, Sun Belt markets also revealed pullback in some markets and signaled declining rents, with Palm Beach showing year-over-year (YoY) rent increasing only 12.7% at the end of July, compared to 30.6% growth in Q4 of 2021.
The report says this reveal a decrease in demand for multifamily housing market, especially when new apartment unit deliveries are estimated to reach 230,000 in the second half of this year, according to Jay Lybik, National Director of Multifamily Analytics of CoStar Group.
“Throughout the month of July, while multifamily yearly rents continued to perform well above historical averages, the deceleration of rent growth quickened at a time when markets typically post their best results,” he said in the release.
In addition to Palm Beach, Tampa (12%) and Las Vegas (9.3%) rent growth also declined by double-digits this year, which the release says highlights pullback in markets that performed well in 2021.
Meanwhile, San Francisco and East Bay rents have shown a different projection. San Francisco’s average rents fell by $18 when compared to its peak of $3,116 in Q2 of 2019. Rents rose by 40 basis points in the past 30 days to 5%, while the East Bay was at 5.5% through July.
The analysis also reveals 12 markets which saw ansolute asking rent decline in the last month, which it says is the first occurence since 2020. In this regard, Miami’s average asking rents fell by $11 (-0.5%).
Sunbelt cities like Fort Lauderdale (-0.3%), Austin (-0.1%), Orlando (-0.1%), Charlotte (-0.1%) and Tampa (0%) also showed negative or flat rent growth in July. Other cities showing a similar trend include Orange County (0.3%), Inland Empire (-0.2%) and Minneapolis (-0.2%).
The report concludes spring and summer leases have reduced demand, with increased risk of rents falling below CoStar’s current year end forecast of 6.3%.
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